Recently, after great advancements in the automotive industry of Pakistan, a Japanese Company is going to introduce electrically powered rickshaws in Pakistan. The company will introduce these electrically powered rickshaws by importing CBU and CKD units. Though, the duty tariff imposed by the government on imported items is creating a hurdle. The Japanese Company has made a request to the Pakistan government to end the duty tariff on the import items of CBU and CKD units, so it becomes easy to introduce electric powered rickshaws in Pakistan.
FBR (Federal Board of Revenue) on the recommendation of BOI (Board of Investment) is attempting to resolve the tax related issues being faced by the Japanese companies, who are attempting to introduce new vehicles in Pakistan. The proposals of the Japanese companies’ investors have already been forwarded to the BOI for further action. Federal Board of Revenue has received a proposal related to the taxation on the SEZ (Special Economic Zone) enterprise and taxes imposed on the reinvestments and upcoming investments. The investors have also requested a rapid refund for withholding and advance tax. However, Special Economic Zone Enterprises are released from payment of import taxes but still, a minimum tax amount is being collected.
Japanese investors have given a proposal that a minimum amount of tax is taken by the company regardless of any loss or profit. This type of minimum amount of tax should be ended on reinvestments and new investments. Board of Investment has made a request to Federal Bureau of Revenue to eradicate tax on undistributed revenues as it negatively affects reinvestments. FBR will be considering this proposal and will be making a final decision soon. In a meeting at PM’s office, Board of Investment discussed all these issues being faced by the Japanese investors in Pakistan. The members of the Japanese Consulate in Pakistan, Japan Trade Organization, JICA and Pakistan-Japan Business Forum also took part in this meeting held at PM’s office.