A Japanese Company is planning to launch electric rickshaws in Pakistan. The company will introduce them by importing CKD and CBU units. But currently, the duty tariff on imported items is quite a hurdle. The company has made a request to the government to end duty tariff on import items of CKD and CBU units so that it becomes easier to introduce electric rickshaws in the country.
Federal Board of Revenue (FBR) on the recommendation of Board of Investment (BOI) is trying to solve the tax-related issues faced by Japanese companies. Proposals of Japanese business investors in Pakistan have been forwarded by Board of Investment. FBR has received a proposal concerning the taxation on the special economic zone (SEZ) enterprise and taxes on new and reinvestments. Investors have requested a fast refund for advance and withholding tax. The rise in the issued exemption certificates validity is quite short. Special Economic Zone Enterprises is released from payment of all taxes but a minimum tax is still collected.
Also read: Export of Pakistani Rickshaws in Japan
Japanese investors proposed that minimum tax is taken regardless of profit or loss. This minimum tax needs to be ended on new investments and reinvestments. Thus BOI has requested FBR to abolish tax on undistributed profits as it negatively affects reinvestments. FBR will consider this proposal and then make the final decision.
In a meeting previously PM’s office, BOI discussed the problems faced by Japanese investors in Pakistan. Members from Japanese Consulate in Pakistan, Pakistan-Japan Business Forum, Japan External Trade Organization (JETRO) and JICA took part in the meeting.
It was further proposed that other than Bridgestone, Dunlop, and Yokohama, more kinds of tyres are imported in Pakistan by Japanese companies. Tyres are imported as luxury goods. Duty tariffs on them are a hurdle for the market and the consumers. Thus BOI wants to simplify the whole procedure.