Latest news with #OICCI
Business Recorder
14 hours ago
- Business
- Business Recorder
FBR officials: OICCI says concerned at proposed arrest powers
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed serious concerns over the proposed powers of arrest granted to Federal Board of Revenue (FBR) officials under the Finance Bill 2025-26, warning that the move has significantly undermined investor confidence, particularly among foreign stakeholders. In a letter addressed to Finance Minister Muhammad Aurangzeb, the OICCI expressed deep concern over proposed amendments in the Finance Bill 2025-26, relating to Section 37 AA of the Sales Tax Act, 1990, seeking to extend wide powers to the Inland Revenue officials relating to arrest/prosecution without necessary check and balance. The chamber criticized the provision for granting sweeping powers of arrest and prosecution to Inland Revenue officials without adequate checks and balances, which it believes could lead to misuse and harassment of businesses. Tax laws: PM directs formation of arrest powers review panel 'Local business leadership has also reacted very negatively to the proposed measure; however, this move has dented the confidence of the leadership of our 200-plus members belonging to over 30 countries,' Abdul Aleem Chief Executive and Secretary General OICCI said in the letter. He said that such arbitrary measures, without thorough consultation with key stakeholders or due consideration of its potential impact on the business environment, add to the negative perception of the country as a business-friendly destination for local and foreign investors. OICCI has also appreciated the timely intervention from Prime Minister, Mian Shehbaz Sharif, Finance Minister Muhammad Aurangzeb and senior members of Parliament in ensuring that such far-reaching and potentially disruptive proposals are not enacted without rigorous oversight and due diligence. He said there should be any consideration to retain this clause for exceptional circumstances, the OICCI looks forward to reviewing the specific safeguards proposed to prevent misuse. In the Chamber's view, at a minimum, explicit prior approval from the FBR Chairman should be mandated in any such extraordinary case involving the arrest of an alleged defaulter. The OICCI further emphasized its trust that the government leadership and relevant authorities including the FBR fully recognize the potential reputational damage that such unnecessary and excessive measures could cause to Pakistan's image as a welcoming and dependable destination for both foreign and domestic investors. The OICCI has also conveyed its concerns to FBR Chairman Rashid Mahmood Langrial and urged a reconsideration of the proposed clause. Copyright Business Recorder, 2025
Business Recorder
12-06-2025
- Business
- Business Recorder
Pakistan govt's budget steps may hinder cashless economy drive: TOAP
ISLAMABAD: As the government unveils a raft of new taxes on digital transactions and e-commerce in the federal budget, Aamir Ibrahim, chairman Telecom Operators Association of Pakistan voiced both hope and concern, warning that the measures could slow Pakistan's journey toward a cashless economy. Industry leaders, trade bodies, and associations also expressed concerns that the budget missed an important opportunity to mandate digital payment options across retail. They pointed out that many major retailers still refuse to accept digital payments in order to hide real income and evade taxes, indicating that enforcement against such practices remains insufficient. This gap, they argued, allows tax evasion to persist and undermines efforts to bring more transactions into the formal, documented economy. The Overseas Investors Chamber of Commerce and Industry (OICCI) also criticised the government for missing a crucial opportunity to broaden the tax base and document the country's vast Rs9 trillion cash-based informal economy. In a statement, the OICCI noted that while measures like the nationwide rollout of e-invoicing and expansion of POS systems are positive steps; the absence of a concrete strategy to address the informal sector and rationalise tax structures undermines efforts to create a more investment-friendly environment and advance economic formalisation. 'The budget aims to formalise online trade through digital integration and tax measures, which is a plus,' said Aamir. 'However, complexity in tax collection, the 5% levy on digital transactions with foreign vendors, and additional taxes charged by payment intermediaries risk increasing costs and discouraging digital adoption. Making digital payments more prevalent, easier, and affordable is essential for Pakistan's growth and for documenting the economy. Let's ensure policies support a truly digital Pakistan, driving transparency and compliance without undue burdens.' The new Finance Bill introduces taxes on both local and foreign e-commerce marketplaces, making online shopping costlier for Pakistani consumers. Notably, a five per cent tax will be imposed on goods purchased from foreign online marketplaces such as AliExpress and Amazon, collected by banks and payment gateways at the point of transaction. Meanwhile, local digital payments will face a tiered tax structure, ranging from one per cent to two per cent depending on the transaction amount, and courier companies will collect taxes on cash-on-delivery payments. Banks and courier services have been designated as withholding agents, required to collect and remit these taxes, and file detailed statements on all digital transactions. Online marketplaces must also ensure that all vendors are registered for sales tax, tightening compliance across the sector. Aamir acknowledged the government's intent to bring more online activity into the formal economy but cautioned that the added complexity and cost could push some businesses and consumers back toward cash and informal channels. 'We need to strike a balance between expanding the tax net and fostering digital inclusion. If digital transactions become more expensive or cumbersome, we risk undermining the very progress we've made in financial inclusion and digital transformation.' He urged policymakers to revisit the proposed levies and streamline tax collection, so that Pakistan's vision of a cashless, digitally empowered society remains within reach. 'There is still time to fix anomalies in the new budget. Let's make sure that our policies truly support a digital Pakistan, rather than create new barriers to adoption.' Copyright Business Recorder, 2025
Business Recorder
12-06-2025
- Business
- Business Recorder
Budget steps may hinder cashless economy drive: TOAP
ISLAMABAD: As the government unveils a raft of new taxes on digital transactions and e-commerce in the federal budget, Aamir Ibrahim, chairman Telecom Operators Association of Pakistan voiced both hope and concern, warning that the measures could slow Pakistan's journey toward a cashless economy. Industry leaders, trade bodies, and associations also expressed concerns that the budget missed an important opportunity to mandate digital payment options across retail. They pointed out that many major retailers still refuse to accept digital payments in order to hide real income and evade taxes, indicating that enforcement against such practices remains insufficient. This gap, they argued, allows tax evasion to persist and undermines efforts to bring more transactions into the formal, documented economy. The Overseas Investors Chamber of Commerce and Industry (OICCI) also criticised the government for missing a crucial opportunity to broaden the tax base and document the country's vast Rs9 trillion cash-based informal economy. In a statement, the OICCI noted that while measures like the nationwide rollout of e-invoicing and expansion of POS systems are positive steps; the absence of a concrete strategy to address the informal sector and rationalise tax structures undermines efforts to create a more investment-friendly environment and advance economic formalisation. 'The budget aims to formalise online trade through digital integration and tax measures, which is a plus,' said Aamir. 'However, complexity in tax collection, the 5% levy on digital transactions with foreign vendors, and additional taxes charged by payment intermediaries risk increasing costs and discouraging digital adoption. Making digital payments more prevalent, easier, and affordable is essential for Pakistan's growth and for documenting the economy. Let's ensure policies support a truly digital Pakistan, driving transparency and compliance without undue burdens.' The new Finance Bill introduces taxes on both local and foreign e-commerce marketplaces, making online shopping costlier for Pakistani consumers. Notably, a five per cent tax will be imposed on goods purchased from foreign online marketplaces such as AliExpress and Amazon, collected by banks and payment gateways at the point of transaction. Meanwhile, local digital payments will face a tiered tax structure, ranging from one per cent to two per cent depending on the transaction amount, and courier companies will collect taxes on cash-on-delivery payments. Banks and courier services have been designated as withholding agents, required to collect and remit these taxes, and file detailed statements on all digital transactions. Online marketplaces must also ensure that all vendors are registered for sales tax, tightening compliance across the sector. Aamir acknowledged the government's intent to bring more online activity into the formal economy but cautioned that the added complexity and cost could push some businesses and consumers back toward cash and informal channels. 'We need to strike a balance between expanding the tax net and fostering digital inclusion. If digital transactions become more expensive or cumbersome, we risk undermining the very progress we've made in financial inclusion and digital transformation.' He urged policymakers to revisit the proposed levies and streamline tax collection, so that Pakistan's vision of a cashless, digitally empowered society remains within reach. 'There is still time to fix anomalies in the new budget. Let's make sure that our policies truly support a digital Pakistan, rather than create new barriers to adoption.' Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Corporate tax rate issue: OICCI disappointed over limited govt progress
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed disappointment over the government's limited progress in addressing inequitable corporate tax rate in the recent budget. It said while the marginal reduction in Super Tax rates is acknowledged, OICCI reiterates the urgent need for a comprehensive overhaul of tax structures to enhance Pakistan's competitiveness and attract foreign investment. The Chamber also notes the absence of meaningful reductions in government expenditure, which could have helped narrow the budget deficit. Fiscal discipline remains critical to ensuring macroeconomic stability, and OICCI urges the government to prioritize expenditure rationalisation in its budgetary measures. OICCI regrets the government's missed opportunity to broaden the tax base in the current budget, particularly the absence of any concrete strategy to document Pakistan's substantial Rs. 9 trillion cash-based informal economy - a critical measure for meaningful revenue enhancement and economic formalization that the Chamber has consistently advocated for OICCI welcomes several positive reforms, including simplified tax returns for salaried individuals and small businesses, the nationwide rollout of e-invoicing, and the expansion of POS systems, all measures long advocated by the Chamber. However, their success hinges on effective implementation, and OICCI stresses the need for transparency and consistency in execution. The increase in the tax exemption threshold for salaried individuals (from Rs. 0.6 million to Rs. 1.2 million) and the reduction in their tax rate (from 5 percent to 1 percent) are commendable steps that align with OICCI's recommendations but still fall short of providing impactful and necessary relief to reduce ongoing brain drain in the country. OICCI also acknowledges the government's gradual phasing out of tax exemption on FATA and PATA and the government's stricter measures against non-compliant taxpayers, including restrictions on property and vehicle purchases, asset transfers abroad, and enhanced penalties. Such actions are crucial for improving tax compliance and broadening the revenue base. Despite these advancements, the budget falls short of introducing transformative policies for the corporate sector. OICCI emphasises that gradually rationalising tax slabs and reducing the overall tax burden on businesses are essential to promoting a more investment-friendly environment. Copyright Business Recorder, 2025
Express Tribune
10-06-2025
- Business
- Express Tribune
Businessmen air concern over budget measures
Listen to article Reacting to the federal budget for fiscal year 2025-26, business leaders and industrialists raised concerns, citing increased burden on taxpayers and the lack of incentives for economic growth. Businessmen Group (BMG) Chairman Zubair Motiwala, while calling it a "camouflage budget," expressed serious reservations about its unrealistic targets and the absence of any meaningful relief for the business community or the common man. The budget includes various announcements related to digitalisation and promoting the cashless economy. These measures alone are insufficient for stimulating exports or driving industrialisation, which are critical for sustainable economic growth, he stated. Addressing a press conference at the Karachi Chamber of Commerce and Industry (KCCI) after the finance minister's budget speech on Tuesday, he criticised the government for setting overly ambitious goals despite the country's poor economic performance in the previous fiscal year, during which all major targets, including GDP growth and fiscal consolidation, were missed. Motiwala questioned the rationale behind increasing targets without providing any practical explanation regarding how these would be achieved, especially in a fragile economic environment dominated by uncertainty, high inflation and the IMF-imposed constraints. He remarked that for achieving the elevated tax collection target, the government seems to be relying largely on extracting more revenue from the existing pool of compliant taxpayers, rather than expanding the tax base. He feared that instead of introducing meaningful reforms to bring untaxed sectors into the fold, the budget would result in increased discretionary powers for tax officials, burdening documented businesses and discouraging the economic activity. "This strategy of squeezing the formal sector could result in contraction of economic output rather than expanding it." The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed disappointment over the government's limited progress in addressing inequitable corporate tax rates in the recent budget. While a marginal reduction in super tax was acknowledged, the OICCI reiterated the need for a comprehensive overhaul of tax structures to enhance Pakistan's competitiveness and attract foreign investment. The chamber noted the absence of a meaningful reduction in government expenditure, which could have helped narrow the budget deficit. Fiscal discipline remains critical to ensuring macroeconomic stability. The OICCI urged the government to prioritise expenditure rationalisation in its budgetary measures. It regretted the missed opportunity to broaden the tax base, particularly the absence of a concrete strategy to document Pakistan's Rs9 trillion cash-based informal economy – a critical measure for meaningful revenue enhancement and economic formalisation that the chamber had consistently advocated for. Federal B Area Association of Trade and Industry President Shaikh Muhammad Tehseen commented that the federal government's announcement of the initiative to promote SMEs is a welcome move for owners of small and medium-sized businesses. He urged the government to engage relevant stakeholders and incorporate their recommendations to ensure the success of the proposed business scheme, support the export-based sector and generate jobs for the youth. According to the budget speech, on the directives of the PM, the Small and Medium Enterprises Development Authority (Smeda) has prepared a three-year business plan for 2024-27, which includes increasing SME financing, enhancing exports, building inter-industry linkages and promoting female inclusion in business. The speech also mentioned the success of the SME Risk Coverage Scheme, which generated more than Rs311 billion in assistance for over 95,000 SMEs by May 2025. The government's target is to increase SME financing to Rs1,100 billion by 2028. "The government should focus on reducing the cost of production to ensure benefits for industries, particularly through lower interest rates, utility charges and petroleum product prices, which will support the struggling SME units and attract both local and foreign investors to establish SMEs," Tehseen said. SITE Association of Industry (SAI) President Ahmed Azeem Alvi stressed the need for clearer policies, faster tax refunds and digital reforms to support exporters and industries. He said the government has recognised the need for relief within the Customs sector and intends to implement reforms. However, he noted that the full impact of these measures will only be clear once detailed budget documents are released.
