Latest news with #HaroonAkhtarKhan
Express Tribune
a day ago
- 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
4 days ago
- 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
5 days ago
- 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.
Business Recorder
5 days ago
- Business
- Business Recorder
‘Regulatory Reform Package-01': CCoRR undertakes comprehensive review of 136 proposals
ISLAMABAD: The Cabinet Committee on Regulatory Reforms (CCoRR), chaired by the Federal Minister for Investment, Qaiser Ahmed Sheikh, concluded a series of three meetings held to review the Regulatory Reform Package-01, prepared and submitted by the Board of Investment (BOI). These meetings marked a key milestone in the government's efforts to simplify and modernise Pakistan's regulatory landscape in line with the directives of the prime minister. The reform package, formulated by BOI's reform team, comprised of 136 targeted proposals aimed at reducing compliance burden, eliminating outdated procedures, and enhancing the ease of doing business. The package focused on two principal areas: the streamlining of federal-level Registrations, Licenses, Certificates and Other Permits (RLCOs), and modernisation of the Companies Act, 2017 for unlisted companies. CCoRR begins deliberations on Regulatory Reforms Package 01 Over the course of the three meetings, the committee undertook a comprehensive review of 136 proposals. Notably, a sub-committee under the convenorship of Haroon Akhtar Khan, Special Assistant to the Prime Minister for Industries and Production, was constituted to lead consultations on the Companies Act in coordination with the Securities and Exchange Commission of Pakistan (SECP) and other stakeholders. It is pertinent to note that out of 136 proposed reforms, 104 of proposals have been endorsed by the Cabinet Committee for implementation. These include the elimination of 19 redundant regulatory requirements, streamlining of 57 procedural requirements that includes simplification, modernisation and introduction of digital mechanisms to enhance transparency and service delivery. Once implemented, the endorsed reforms are expected to result in substantial cost savings, reduced approval timelines, and a more business-friendly regulatory ecosystem. The committee issued clear directives to relevant federal ministries and departments to ensure time-bound implementation of the approved reforms, with timelines upto 90 days based on the complexity of each reform measure. The BOI will continue to coordinate and monitor implementation progress and report back to the Cabinet Committee accordingly. It was noted that additional reform packages are in the pipeline, targeting key areas across different sectors of the economy. These upcoming packages are aimed to reduce the compliance burden on businesses and create the space they need to invest, grow and compete more effectively in local and global markets. The federal minister for investment commended the dedicated efforts of the BOI's reform team and acknowledged the constructive engagement of regulatory bodies in furthering this vital national reform agenda. The conclusion of this review process reflects the government's strong commitment to regulatory modernisation and its resolve to foster an enabling environment for business and investment in Pakistan. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
USC to be shut down by 31st, employees offered VSS
ISLAMABAD: The government has decided to close all operations of Utility Stores Corporation (USC) by 31stJuly 2025, and offer a financially viable Voluntary Separation Scheme (VSS) for its employees. A high-level meeting of the committee constituted by the prime minister to oversee the closure and privatisation of the USC was held on Wednesday with the Federal Minister for Finance and Revenue, Muhammad Aurangzeb, in the chair. The committee has been tasked with ensuring a smooth and transparent closure process, formulating a suitable VSS for USC employees, and recommending a structured timeline for privatisation. Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, secretary Establishment Division, secretary Finance Division, secretary Industries and Production Division, managing director of the USC and senior officers from the Finance and Revenue Divisions attended the meeting Wednesday. The committee led by the finance minister reviewed the progress made in the light of the tasks assigned to it and held detailed deliberations on the way forward. It was reaffirmed that, in accordance with the government's directives, all operations of USC will be closed by 31st July 2025. The committee discussed at length the formulation of a fair and financially viable VSS for the USC employees. During the course of the meeting, the members examined various dimensions of the proposed VSS, including its projected size, potential fiscal impact, and legal and operational implications associated with its structure and rollout. The committee recommended that the Privatization Commission be consulted regarding the optimal structuring and feasibility of privatisation or alternatively asset sales linked with the USC operations. To facilitate a comprehensive analysis, the chair constituted a sub-committee headed by the secretary Establishment Division. The committee will include representatives from the Finance Division and the Industries and Production Division to examine the legal and operational aspects, contours, size, and structure of the proposed VSS and submit its report to the main committee by the end of the week. This will enable the committee to consolidate its findings and finalise its report and recommendations to be submitted to the prime minister in line with the terms of reference. According to the USC restructuring plan recently shared in the Senate Standing Committee on Industries and Production, the closure of 1,925 loss-making Utility Stores outlets countrywide has resulted in saving of Rs1.7 billion. The government has shut down 1,925 loss-making Utility Stores outlets countrywide while sacking 4,060 employees out of a total of 11,614. According to officials, in case, the government failed to privatise the USC, annually Rs7 billion will be required to pay the salaries of the employees. At present, the privatisation process had been stopped because of a lack of its audit for two years. 'The privatisation will take place after the audit is complete,' the officials said, adding that 5,000 permanent employees would be sent to the surplus pool, while 2,554 employees still on contracts and on daily wage basis would be laid off. There were 3,742 Utility Stores outlets across the country, out of which, the government has shut down 1,925 loss-making stores. USC's monthly losses had been reduced to Rs220 million. It was also disclosed that the USC will not have sufficient funds to pay salaries to its 5,000 employees beyond next month, due to the closure of a significant number of its outlets. According to officials the USC's outstanding payment stand at Rs25 billion. The management has decided to offer golden handshake scheme to 25 percent of the USC employees, otherwise, Rs2.7 billion annually will be spent on the salaries of these employees. Copyright Business Recorder, 2025
