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Express Tribune
5 days ago
- Business
- Express Tribune
Panel proposes corporate tax cut, refund in 72 hours
At high tax rates, profit margins for sellers decrease, leaving them with options to pass on the burden to consumers, compromise on the quality of products, evade taxes or find cheaper illicit goods. photo: file Listen to article The Industrial Policy Committees have proposed cutting the corporate tax rate and introducing a 72-hour sales tax refund system. In a high-level meeting held under Pakistan's Industrial Policy framework, the sub-committees on tax rationalisation and export enhancement recommended reforms to attract investment and strengthen exports. The meeting was chaired by Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, and attended by the PM's Coordinator Rana Ehsan Afzal, Federal Board of Revenue (FBR) officials, and other key stakeholders. One of the main recommendations was to gradually reduce the corporate income tax rate from 29% to 26% over three years. Akhtar Khan noted that Pakistan's corporate tax remains higher than many regional peers, like Vietnam, where it is capped at 17%. He said lowering taxes would improve business outcomes and fuel economic growth. Another major proposal was to rationalise the super tax regime. The committees suggested applying the super tax only on additional income rather than total profits. They proposed reducing the rate to 5% over five years, with possible elimination in the sixth year — conditional on a positive primary fiscal balance. To boost exports, the committees supported introducing a new Drawback of Local Taxes and Levies (DLTL) scheme. They also backed timely disbursement of sales and income tax refunds, with a proposal for issuing refunds within 72 hours through a dedicated monitoring system. They further recommended removing cross-subsidies in industrial power tariffs and eliminating advance taxes on exporters. The committees reviewed financial support options for exporters. Suggestions included simplifying banking procedures and offering export financing at rates 500 basis points below the current policy rate. Addressing participants, the SAPM reaffirmed the government's commitment to making exports a national priority. He conveyed Prime Minister Shehbaz Sharif's directive to place export-led growth at the core of economic policy. Akhtar Khan acknowledged exporters' challenges, including high interest rates, costly utilities, and heavy taxes. He said strong incentives and sound policies can help local industries compete globally and ensure sustainable progress.
Express Tribune
6 days ago
- Business
- Express Tribune
Govt moves to amend bankruptcy law to support struggling firms
Sub-committees on Bankruptcy Law and the Prevention of Undue Harassment by state authorities have recommended major reforms aimed at providing relief to companies facing winding-up orders. The committees proposed significant amendments to the Corporate Rehabilitation Act, 2018. These include removing the eligibility threshold based on receivables and introducing a formal mechanism for stay orders through judicial directives. They also recommended the inclusion of companies availing relief under State Bank of Pakistan (SBP) Circular No 29, along with suggesting the development of a comprehensive system for asset valuation and mediation. Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, chaired a high-level meeting of the sub-committees. The meeting focused on reforms to the bankruptcy law and the prevention of undue harassment by state institutions. The session was attended by Prime Minister's Coordinator Rana Ehsan Afzal and representatives from the Pakistan Business Council (PBC), Federal Board of Revenue (FBR), SBP, Securities and Exchange Commission of Pakistan (SECP), various chambers of commerce, the Anti-Money Laundering Authority, and other stakeholders. "This policy package will offer critical relief to affected companies," said Akhtar Khan. "The bankruptcy law will serve as a comprehensive and supportive legal framework to ensure industrial stability." The committee also proposed amendments to the Corporate Restructuring Companies Act, 2016. They noted that the Corporate Rehabilitation Board has suffered delays due to overly stringent appointment criteria and a lack of funding. The SAPM emphasised, "Banks and borrowers will now work together in a collaborative framework." The sub-committee on undue institutional harassment submitted additional recommendations. These included developing a legal framework to protect the autonomous role and decisions of the SECP and promoting foreign investment through a non-political, interference-free environment. "Prime Minister Shehbaz Sharif's vision is clear: to revive sick industrial units and eliminate undue harassment from state authorities," said Akhtar Khan. He also acknowledged the diligent efforts of the sub-committees and praised their commitment to creating business-friendly reforms.
