Pakistan: Introduces an incentive scheme for industrial and trade sectors under no question on source of investment
The government has agreed on a new incentive scheme for industrial and trade sectors under which tax authorities will not question the source of investment, industry sources said on 22 January 2017. Sources in Federal Board of Revenue (FBR) also said that the tax machinery was working on such proposals on the directives of the government.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) recently made following recommendations for tax amnesty scheme:
1. The scheme will not be applicable for those assets and transactions which are currently in the litigation process.
2. A minimum 0.5% tax will be levied on the assets which have been willingly declared by the assessee before 31st March, 2017. However, such declared assets/money should be invested or utilised for the following purposes:
i) Investment in knowledge-based hi-tech industry, research & development projects, engineering industry and auto industries;
ii) Investment in CPEC related economic zones;
iii) Any investment in Gwadar port city;
iv) Investment to acquire strategic shares of multinational hi-tech and IT related companies;
v) Investment in any projects in all over Pakistan subject to provision/generation of minimum fifty additional employments through recognised employment exchanges or human resource management companies;
vi) If the assets are invested in the modes of Islamic Financing / Formation of new ‘Modaraba Management Companies’ (as defined by Modaraba Ordinance 1984) and the objective of modaraba management company is to invest in the project to reduce the poverty or to improve the health and educational standards or to achieve those targets of Millennium Development Goals (MDGs) which have been described by the Government of Pakistan;
vii) Investment in the modes of Islamic Financing for participation in that infrastructure development related projects which are commercially viable. It is expected that Islamic modes of financing will be applied as a substitute of Development Financial Institutions (DFIs) and their contribution to the economic development will be significantly improved;
viii) The money utilised or paid to the charitable institutions; and
ix) Investment in establishing warehouses of Pakistani products at abroad.