PM Imran Khan announces 5-year tax relief for overseas investors

• PM Imran Khan says "no country can become great without a manufacturing base and industrial growth."
• The premier says a country develops when there is wealth creation.
• “The biggest challenge that we face is of a current account deficit," he highlights.

LAHORE: Prime Minister Imran Khan has announced a five-year tax exemption for overseas investors to bolster investment in Pakistan.

He made the announcement during a gathering in Lahore to announce an industrial package to promote business activities in the country.

Addressing the ceremony, the premier said that countries progress from industrial development. “No country can become great without a manufacturing base and industrial growth,” he said.

“A country develops when there is wealth creation, without it they cannot move forward,” he said, adding that when a government forms policies against profit-making, it halts the development of industries and reduces investment opportunities.

He further explained when industries earn profit, other investors get attracted to that particular sector.

Salient features of the industry package

Incentives for industrial promotion

• Investment in new industrial units and expansion and modernization of existing units
• 5% across the board payment of tax for all amounts invested
• Minimum investment threshold Rs. 50 million
• Industrial unit to be set-up as a company
• Commercial production to begin by 30th June 2024
• Previous beneficiaries of Amnesty Schemes of 2018 and 2019 not eligible
• Bank loan defaulters in last three years not eligible

Incentive for revival of sick units

• Applicable only to companies
• Industrial units having accumulated losses in continuous 3 years to be treated as sick units
• Acquiring company allowed to adjust losses of the sick units against its income for three years
• Revival of the sick unit to be completed within three years of acquisition

Incentive for foreign investment in industrial sector

• Pakistan citizens who are non-resident for five years and resident Pakistani having declared foreign assets are eligible to invest
• One-time tax credit equal to 100% of PKR equivalent of remittance to be availed in 5 years
• Investment to be made in a new industrial unit
• Commercial production to start by 30th June, 2024
• New industrial unit to be a company

PM Imran Khan said that earlier such policies were made which were unfavourable for industrial growth, due to which the country’s exports stopped increasing as there was no long-term plan in place.

“Pakistan never paid attention towards the export sector; whenever we faced a shortage of the US dollar we approached the International Monetary Fund (IMF),” he lamented.

Sharing details of the package, the premier said that the growth of small and medium industries have been focused on, for which the government has introduced a policy and is creating facilities for the sector's growth.

Incentives for overseas Pakistanis

Speaking about the five-year tax exemption for foreign investors, the premier said that if they invest in the industries of Pakistan, our country will develop further.

“Facilities will be given to overseas Pakistanis who face difficulties investing in the country,” he said, citing an example that whenever overseas Pakistanis purchase land in Pakistan it has been illegally occupied as they are not personally around to look after their property.

‘I should have announced an amnesty earlier’

During his address, he highlighted the issue of the rising current account deficit.

“The biggest challenge that we face is of a current account deficit which is triggered due to stagnant exports,” he said.

Pakistan’s current account deficit — the gap between the country’s higher foreign expenditure and low income — widened to a 13-year high of $2.6 billion in January 2022 in the wake of a surge in import payments due to rising commodity prices in the international market.

This was the highest-ever monthly current account deficit. The last time the figure was this high was back in October 2008 when it was $2.03bn.

PM Imran Khan admitted that he should have announced an amnesty for the industries as soon as he was sworn as the prime minister back in 2018.

Rapid growth to be seen in IT sector

Expressing hope in the IT sector, he said that the most rapid growth will be seen in this sector; however, he regretted that we treat the sector like normal industries.

“We are trying to make the country self-sufficient and the business community will play a major role in doing so,” he said.

PM directs CM Punjab to take action against encroachers

Earlier, during a meeting with Chief Minister Punjab Usman Buzdar, the premier directed him to take effective measures for the provision of maximum relief and ensure the delivery of quality services to the people of Punjab.

PM Imran Khan further instructed Buzdar to protect the rights, lives and property of people and to take stern action against encroachers, hoarders and miscreant elements in society, Radio Pakistan reported.

During the meeting, the premier was briefed about developmental projects being carried out across the province.

PM on a day-long trip to Lahore

Federal Minister for Education Shafqat Mehmood, Energy Minister Hammad Azhar, Aviation Minister Ghulam Sarwar Khan, Industrial Minister Khusro Bakhtyar and Adviser to Prime Minister on Commerce Abdul Razak Dawood accompanied the premier on his day-long trip.

PM Imran Khan is also scheduled to meet members of Parliament from Rawalpindi, Bahawalpur, Multan and Sahiwal.

According to sources, he is also scheduled to meet PML-Q’s Chaudhry brothers.

Meanwhile, due to premier’s Lahore trip, the weekly scheduled cabinet meeting has been postponed.