Latest news with #HaroonAkhtarKhan
Express Tribune
2 days ago
- Business
- Express Tribune
Company law modernisation to save Rs250b
The government has estimated annual cost savings of around Rs250.54 billion ($895 million) through the modernisation of Companies Act and regulatory reforms. Of the total, savings of around Rs176.96 billion ($632.2 million) will come from modernising the law and Rs73.58 billion ($262.8 million) from regulatory changes. Sources said that it was informed in a recent meeting of the sub-committee on modernisation of Companies Act 2017, chaired by Special Assistant to Prime Minister on Industries and Production Haroon Akhtar Khan. During the meeting, Haroon Akhtar stressed the need for simplifying the registration process for unlisted companies, noting that delays, excessive regulation and the lack of ease of doing business had become serious challenges being faced by the business community. The sub-committee noted that stunted corporate growth was due to increasing regulatory burdens, which come with growth of a corporate entity. "There is excessive control over company activities and exclusion of innovative corporate financing options. A high level of complexity compounds such issues," it said. Pakistan has only 523 listed companies, which translates into two companies per million people. A comprehensive review of the Companies Act 2017 is required through benchmarking it with international standards. Global standards suggest that the Act should focus on regulating listed companies and higher-risk firms such as state-owned enterprises (SOEs). Corporate governance for unlisted companies should primarily be handled through corporate bylaws, shareholder agreements and contract law. The current one-size-fits-all approach is not suitable for the modern corporate environment. The Act imposes numerous thresholds, barriers and compliance costs that hinder the growth of unlisted businesses. It limits innovation in corporate forms and financing methods such as joint ventures, peer-to-peer lending, venture capital and crowdfunding. What modernisation will do It will promote faster growth of corporate entities by removing unnecessary restrictions, costs and risks. It will increase flexibility for organising and financing corporate entities to meet needs of a modern and dynamic economy. Apart from these, the Securities and Exchange Commission of Pakistan's (SECP) enforcement efforts for listed companies will be strengthened. Its focus on education regarding good governance will be reinforced. A review suggests that the 418-page Act can be substantially deregulated for unlisted companies to allow a smoother growth path from sole proprietors through limited liability companies (LLCs) and into the expansion phase using various financing forms. This shift will allow unlisted companies to grow faster and be more agile in responding to market opportunities by providing greater flexibility in governance. Special resolutions Special resolutions create thresholds that impose regulatory costs. There are mandatory provisions for unlisted companies. There is excessive reliance on special resolutions, which slows down routine decision-making. Routine decisions should be governed by corporate bylaws, shareholder agreements, contract law, or delegated to the board of directors. Pakistan has 23 special resolutions, compared to nine in Canada and six in Delaware. The Board of Investment (BoI) recommends eliminating seven, simplifying 10 to allow more flexibility for directors and retaining six that align with international practices for protecting minority shareholders. Rigid thresholds for forming and operating various types of corporate entities have resulted in unnecessary compliance costs. For example, a private company must have between two and 50 members. If the number exceeds 50, it must convert into a public company. BOI recommends eliminating arbitrary thresholds and the classification of single-member companies as a separate corporate form. It also suggests abolishing the minimum and maximum shareholder requirements for both private and public companies.
Business Recorder
4 days ago
- Business
- Business Recorder
Govt to save Rs70bn annually through 100 reforms across 24 ministries
ISLAMABAD: The government will save over Rs70 billion from introducing and implementing 100 reforms in 24 ministries and departments per annum. This was stated by the officials in a briefing to the Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan who chaired the meeting on Modernization of Companies Act 2017 of Sub-committee by SAPM Haroon Akhtar khan. The meeting was informed that through 29 reforms in pharmaceutical and medical devices an estimated amount of Rs17.81 billion would be saved, through 17 reforms in agriculture market Rs6.56 billion, Rs1.91 billion through eight reforms in logistics and transportation, and Rs43.74 billion through 46 reforms in cross cutting. The meeting stressing the need for moderation of Companies Act-2017 said that there are only 523 listed companies in Pakistan, 2,500 unlisted and 252,321 registered companies, while in USA, there are 33.2 million registered companies and in Canada, 1.3 million registered companies. The meeting was informed that these reforms would result in saving a total Rs250.5 billion to national kitty, of which, Rs1,787 billion by modernisation of Companies Act-2017 and regulatory reforms will save Rs73.6 billion. The meeting was attended by Scott Jacobs, representatives from the Board of Investment (BoI), Securities and Exchange Commission of Pakistan (SECP), and the Overseas Investors Chamber of Commerce (OICC). The participants held detailed discussions on regulatory reforms and the modernisation of the Companies Act 2017. Haroon Akhtar Khan stressed the need for simplifying the registration process of unlisted companies, noting that delays, excessive regulation, and the lack of ease in doing business have become serious challenges for the business community. Copyright Business Recorder, 2025
Express Tribune
21-07-2025
- Business
- Express Tribune
Trade bodies advocate restoration of final tax regime
Trade bodies have expressed concern over the imposition of the normal tax regime under the Finance Act and proposed several measures to resolve their pressing problems. They have advocated that the final tax regime for the export sector should be reinstated and under this mechanism the tax rate can be increased gradually. They suggested tax rates of 1.5% for FY25, 1.75% for FY26 and 2% from FY27 onwards, adding that this approach would ensure the required increase in revenue without the need for complex tax filings or audits. A high-level delegation comprising representatives from the Sialkot Chamber of Commerce and Industry, Pakistan Readymade Garments Manufacturers and Exporters Association and Pakistan Hosiery Manufacturers Association met with Special Assistant to Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan on Monday. They discussed crucial matters including the final tax regime versus the normal tax regime, industrial policy and measures to improve the ease of doing business. A major worry was the emerging practice of tax officers, who were demanding an additional 0.5% advance tax from exporters to meet revenue targets. This raises the effective tax burden by 150%, a level that is utterly unsustainable for the value-added export sectors, especially those dominated by small and medium enterprises (SMEs), the representatives of trade bodies said. The final tax regime was introduced in fiscal year 1991-92 with a 0.5% fixed tax on exports. It was a remarkable success as tax collection rose from Rs343 million in 1990-91 (pre-final tax regime) to Rs855 million in 1991-92, reflecting a staggering 149% growth. They stressed that it not only boosted government revenue with minimal administrative cost but also paved the way for exponential growth in exports, particularly from regions like Sialkot, while significantly reducing corruption and discretionary interventions. Over the decades, the final tax regime provided exporters with a simple, transparent and harassment-free taxation model, but the imposition of the normal tax regime increased the burden, they said. The new policy allows a 2% deduction at source on export proceeds (a 100% increase), an unprecedented move that undermines export viability. They pointed out that there was 1% minimum tax and 1% advance tax (total 2%) at source, and 29% tax on companies and 45% on individuals/Association of Persons (AOPs) after assessment. The trade representatives also raised the issue of 10% surcharge on income exceeding Rs10 million for AOPs/individuals and super tax of 1-10% for income exceeding Rs150 million. They were of the view that the shift to the normal tax regime would have significant implications with the potential for unfair practices. The introduction of refunds and complex tax assessments may incentivise exporters to manipulate financial statements to maximise refunds. The normal tax regime could also reduce the inflow of export proceeds as businesses may seek to avoid higher tax burdens by resorting to under-invoicing. Exporters may deliberately declare lower values for goods or services to reduce the taxable income, leading to minimum tax liabilities and parking of funds abroad. Addressing the concerns, SAPM Haroon Akhtar assured the delegation that the government was fully aware of the challenges faced by the business community. "We are committed to taking all possible measures to resolve these issues," he stated. He revealed that a proposal would be drawn up to include a comprehensive and standardised definition of SMEs in the new industrial policy. "A stable and predictable policy framework is essential for attracting investment and ensuring sustainable industrial growth," the PM aide remarked.
Business Recorder
18-07-2025
- Business
- Business Recorder
Consensus reached on business community's demands, says ministry
The Ministry of Industries and Production announced on Friday that the government has reached a consensus with representatives of the business community on their charter of demands during a high-level meeting held at the Ministry of Finance. The meeting was chaired by Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production, and co-chaired by Minister of State for Finance Bilal Azhar Kayani. Senior officials, including Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial, Prime Minister's Coordinator Rana Ehsan Afzal, and FBR Member Operations Hamid Ateeq, also attended. According to the Ministry of Industries and Production, the meeting saw detailed deliberations on the demands put forward by the Chambers of Commerce and Industry from across the country. 'Proposals on each demand have been finalised with consensus and will be submitted to the Prime Minister for approval,' said Haroon Akhtar Khan. Representatives from the Chambers welcomed the government's initiative and appreciated the consultative approach adopted to resolve key concerns of the business community. The ministry said the meeting marks 'a significant step towards building a new era of cooperation and trust between the FBR and Pakistan's business community.' The development comes days after the government agreed to form a high-powered committee to address the business community's concerns over Section 37A of the Finance Act 2025, prompting traders to defer their planned nationwide strike for 30 days. The decision was made during a meeting chaired by Finance Minister Senator Muhammad Aurangzeb in Islamabad, attended by representatives of major chambers of commerce, trade bodies, and business associations, the Finance Ministry said in a statement. The minister assured the business community that the government intends to curb tax evasion, not to harass honest businesses.
Express Tribune
18-07-2025
- Business
- Express Tribune
Cabinet body okays 104 business reforms
Listen to article The Cabinet Committee on Regulatory Reforms (CCoRR), chaired by Federal Minister for Investment Qaiser Ahmed Sheikh, concluded a series of three meetings to review the Regulatory Reform Package-01 submitted by the Board of Investment (BOI). According to an official statement on Thursday, the meetings marked a key milestone in the government's effort to modernise Pakistan's regulatory environment in line with the prime minister's directives. The BOI's reform package included 136 proposals aimed at reducing compliance burdens, eliminating outdated procedures, and improving the ease of doing business. The package focused on streamlining federal-level Registrations, Licenses, Certificates and Other Permits (RLCOs) and modernising the Companies Act, 2017 for unlisted companies. During the meetings, the committee reviewed all 136 proposals in detail. A sub-committee led by Haroon Akhtar Khan, Special Assistant to the Prime Minister for Industries and Production, was formed to consult on the Companies Act with the Securities and Exchange Commission of Pakistan (SECP) and other stakeholders. Out of 136 proposals, 104 reforms were endorsed for implementation. These include the removal of 19 redundant regulatory requirements and streamlining of 57 procedural steps through simplification, modernisation, and digitalisation. Once implemented, the approved reforms are expected to deliver significant cost savings, shorten approval timelines, and create a more transparent and business-friendly regulatory ecosystem. The committee directed relevant ministries and departments to implement the reforms within set deadlines, up to 90 days depending on each reform's complexity. BOI will coordinate implementation and regularly report progress to the committee. The committee noted that more reform packages are in development, targeting key sectors of the economy. These future reforms aim to reduce compliance pressures and create space for businesses to invest and grow locally and globally.
