Muhammad Jawed Bilwani, Central Chairman Pakistan Hosiery Manufacturers & Exporters Association (PHMA), told Business Recorder here on Saturday that Finance Minister Asad Umer during his visit to Karachi has assured that the government is going to announce measures to increase exports and foreign investment. The government would consider the request to include proprietorship & AOP at par with company to avoid discrimination to avail tax credit on equity investment in purchase and installation of plant and machinery for the purposes of balancing, modernisation, and replacement or expansion in an industrial undertaking established before July 01, 2011 through amendment under section 65b in the Income Tax Ordinance 2001.
Jawed Bilwani said that the government under the Finance Act 2010 passed amendment in the Income Tax Ordinance 2001, Tax Credit for Investment in Industrial Undertaking, the Section 65B in order to encourage companies for investment in balancing, modernisation and replacement of the already installed plant and machinery in an industrial undertaking set up in Pakistan and owned by such company under the provisions thereof. This would provide 10% rebate in income tax payable for the tax year in which such plant and machinery, is installed, shall be admissible if such investment is made in the purchase and installation of plant and machinery at any time between the 1st day of July 2010 and the 30th day of June 2015. In the Finance Act 2018, for the said tax credit under section 65B the cut-off date has been extended to 30-06-2021.
He pointed out that under the prevailing laws of Pakistan and according to the Article 18 "Freedom of Trade, Business or Profession" of the Constitution, every citizen shall have the right to enter into lawful trade or business. Consequently, the businesspersons in Pakistan engage into legal business by registering with the concerned authorities as proprietor/business individual, Association of Persons (AOP) under Partnership Act 1932 and Limited Liability Partnership Act 2017 or with formation of a company under Companies Act 2017 (previously Companies Ordinance 1984) with SECP.
"Ever since, there exists no legal restriction to Pakistani citizens to enter into businesses for any specific law and in order to avoid discrimination in the subject case, we strongly urge you to kindly use your good offices to bring necessary amendments in the Income Tax Ordinance 2001 under section 65B to include "Proprietorship/ Business Individual" as well as "Association of Persons (AoPs)" at par with "Company" to provide equal playing field to avail tax credit for equity investment in purchase and installation of plant and machinery for the purposes of balancing, modernisation, replacement or expansion in an industrial undertaking, accordingly, which will definitely boost new confidence in the industrial concerns registered as the AoPs or proprietorship for the purpose," Jawed Bilwani added.