LAHORE:Federal Secretary, Board of Investment (BoI) Asad Rehman Gillani has said that a high-powered 250-member strong Japanese business delegation is due in Pakistan last week of September.
He was speaking at a meeting at Lahore Chamber of Commerce & Industry, here on Friday. LCCI President Mian Nauman Kabir, Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq also spoke on the occasion.
The federal secretary said that the Japanese delegation is coming to identify available opportunities in various sectors. He said a delegation of Pakistan will visit Saudi Arabia on October 29-30 as the Saudi businessmen are keen to step into joint ventures with their Pakistani counterparts.
He said that Prime Minister Shehbaz Sharif has directed to remove all hurdles coming in the way of foreign direct investment.
He said that Special Economic Zones (SEZs) have a ten-year tax holiday and machinery can be imported tax-free for the industries in SEZs. He said that the procedure and rules & regulations for setting-up industries in SEZs under FDI are being made easier. He said that the business community will be taken on board once the draft in this regard is prepared. He hoped that the work in this regard will be completed by December.
Secretary Asad Rehman informed the house that SECP (Securities and Exchange Commission of Pakistan) is providing nine licenses online to the corporate companies while the registration of companies is also being done online.
LCCI President Mian Nauman Kabir was of the view that in order to deal with the current economic challenges, the level of net foreign direct investment in Pakistan needs to be enhanced to at least 10 billion dollars.
He said that in the first month of the current financial year i.e. July 2022, the net FDI was just 59 million dollars as compared to 104 million dollars in the same month last year.
He said that according to the State Bank data, the recent FDI inflows are concentrated in the sectors like power, financial services, oil & gas and communications. There is a great potential to attract FDI inflows in the sectors like construction, housing, tourism, food processing, logistics, value added textiles, automobiles and renewable energy etc.
He said, “In addition to the FDI inflows, we also need to talk about local investment.” The total investment as a percentage of GDP has been stagnant at around 15% for the last three years.
The LCCI president said, “We have seen FDI inflows to Pakistan have decreased over the past two decades against the global trend of investors focusing on and rushing to developing countries like Bangladesh and Vietnam etc.”
The LCCI president said that this scenario requires a complete review of current investment policy regime. There is a need of a pragmatic and multi-dimensional investment strategy which should not only incentivise the local as well as foreign investors but also attract new investments across the diverse sectors of the economy.
He said that the multiple taxes at the federal and provincial level act a deterrent for the investors. For easing out the taxation regime for investors, there is need for harmonisation of taxes at the federal and provincial level (particularly Sales Tax and Labour Taxes like EOBI and Social Security) through better digitisation and furthermore, “we need to reduce the number of taxes and the frequency of tax payments.”
He said, “In addition to the ease of doing business, we also need to give an adequate focus on the cost of doing business and make sure we remain competitive with other economies in the region in terms of policy rate, electricity tariff, gas tariff, land cost, fuel rates and transportation cost.”
Mian Nauman Kabir highlighted the issue of the lack of Investment in SEZs. There is a need to evaluate the performance of SEZs Act 2012, he added. In China, the SEZs have ensured the viability of human resource through provision of facilities like education, health and vocational training. These gaps in the SEZ Act need to be addressed, he added.
He mentioned that Pakistan has only 2-3 SEZs while 48 SEZs are established near Dhaka.
LCCI Senior Vice President Mian Rehman Aziz Chan said that the Lahore Chamber should be consulted for policy making and be given representation in the government boards and committees.
LCCI VP Haris Ateeq said that Lahore Chamber should be given 2-3 thousand acres of land for the establishment of Special Economic Zones. He said that Export Promotions Zones should also be established throughout the country.