Five-year tax relief for overseas investors

Prime Minister Imran Khan Tuesday announced five-year tax exemption for the overseas investors to bolster investment in Pakistan. He made the announcement during a gathering in Lahore to announce an industrial package to promote business activities in the country. Speaking on the occasion, the premier said countries progress with industrial development. “No country can become great without a manufacturing base and industrial growth. A country develops when there is wealth creation, without it they cannot move forward,” he said, adding that when a government forms policies against profit-making, it halts the development of industries and reduces investment opportunities, says a news report. He further explained when industries earn profit, other investors get attracted to that particular sector. Salient features of the industry package * “Incentives for industrial promotion * “Investment in new industrial units and expansion and modernization of existing units * “5% across the board payment of tax for all amounts invested * “Minimum investment threshold Rs50 million * “Industrial unit to be set-up as a company * “Commercial production to begin by 30th June 2024 * “Previous beneficiaries of Amnesty Schemes of 2018 and 2019 not eligible * “Bank loan defaulters in last three years not eligible * “Incentive for revival of sick units * “Applicable only to companies * “Industrial units having accumulated losses in continuous 3 years to be treated as sick units * “Acquiring company allowed to adjust losses of the sick units against its income for three years * “Revival of the sick unit to be completed within three years of acquisition * “Incentive for foreign investment in industrial sector * “Pakistan citizens who are non-resident for five years and resident Pakistani having declared foreign assets are eligible to invest * “One-time tax credit equal to 100% of PKR equivalent of remittance to be availed in 5 years * “Investment to be made in a new industrial unit * “Commercial production to start by 30th June, 2024 * “New industrial unit to be a company   Imran said earlier such policies were made which were unfavourable for industrial growth, due to which the country’s exports stopped increasing as there was no long-term plan in place. “Pakistan never paid attention towards the export sector; whenever we faced a shortage of the US dollar we approached the International Monetary Fund (IMF),” he lamented. Sharing details of the package, the premier said that the growth of small and medium industries have been focused on, for which the government has introduced a policy and is creating facilities for the sector’s growth. Speaking about the five-year tax exemption for foreign investors, the premier said that if they invest in the industries of Pakistan, our country will develop further. “Facilities will be given to overseas Pakistanis who face difficulties investing in the country,” he said, citing an example that whenever overseas Pakistanis purchase land in Pakistan it has been illegally occupied as they are not personally around to look after their property. Imran highlighted the issue of the rising current account deficit. “The biggest challenge that we face is of a current account deficit which is triggered due to stagnant exports,” he said. Pakistan’s current account deficit – the gap between the country’s higher foreign expenditure and low income – widened to a 13-year high of $2.6 billion in January 2022 in the wake of a surge in import payments due to rising commodity prices in the international market. This was the highest-ever monthly current account deficit. The last time the figure was this high was back in October 2008 when it was $2.03bn. Earlier, during a meeting with Chief Minister Punjab Usman Buzdar, the premier directed him to take effective measures for provision of maximum relief and ensure delivery of quality services to the people of Punjab. Imran further instructed Buzdar to protect the rights, lives and property of people and to take stern action against encroachers, hoarders and miscreant elements in society, Radio Pakistan reported.