ISLAMABAD: President Dr Arif Alvi has promulgated the Income Tax (Amendment) Ordinance 2022 for industrial development after the government offered a third tax amnesty scheme to industrialists.
The federal cabinet on Tuesday formally approved a summary moved by the finance ministry to offer a third tax amnesty scheme to allow industrialists to whiten their black money by investing in the manufacturing sector.
The Ordinance, promulgated by the President under Article 89 of the Constitution on the advice of the Prime Minister – aims at attracting investment, promoting industrial sector, and reviving the country’s sick industrial units by offering an incentive package.
According to a statement from President’s House, through the Ordinance, sections 59C, 65H and 100F have been added in the Income Tax Ordinance 2001 According to the Ordinance, the investors will be required to pay only 5% fixed tax on the assets declared for the establishment of new industrial unit.
The declared funds will only be used for purchasing plant, machinery and setting up an industrial unit. The beneficiary companies will be able to buy the sick or loss-making industrial units. The Ordinance, in order to encourage the investors, provides adjustment of tax/losses of the sick industries for the next three years.
According to the Ordinance, eligible expatriates and the Overseas Pakistani having assets abroad will be able invest in the industrial sector. Under the industrial package, investors bringing in the funds will be entitled 100% tax credit. The facility of tax credit equivalent to the funds brought will be available for five years.
Incentives for industrial investment
On March 1, Prime Minister Imran Khan unveiled an incentive package for the promotion of industrial sector to attract investment from the local and expatriate business community and strength export-oriented industries.
“Along with local businessmen, the government is also inviting the Overseas Pakistani entrepreneurs to invest in the country’s industrial sector. Besides the expatriates, the local businessmen in the joint venture will also enjoy five-year tax holiday with no questions,” he said, while addressing a ceremony attended by a large number of businessmen and representatives of the chambers of commerce and industry.
The prime minister said that the government was doing all for the promotion of export-oriented industries including the measures to strengthen Small and Medium Enterprises (SMEs) and revive sick industrial units.
He said that there was a need to attract Overseas Pakistanis to invest in their homeland by incentivizing and giving them confidence over the protection of their hard-earned capital. While stressing on the importance of industrial and manufacturing sector for wealth creation and development of the country, he said that countries cannot achieve progress only by producing wheat and vegetables.
The prime minister also mentioned the anti-wealth creation and anti-profit-making policies of subsequent governments as major hurdles in the way of required growth in industries in Pakistan, which led to major economic problems including the shortage of dollars and Current Account Deficit.
He said it the present government decided to promote industries particularly the export-oriented industries. He said the two-pronged industrial policy focused on the promotion of SMEs through improved regulations and ease of doing business and the revival of sick industrial units.
