May 29, 2024 (MLN): The Overseas Investors Chamber of Commerce and Industry (OICCI) is deeply concerned about the news of British American Tobacco (BAT) company’s warning to withdraw its investment from Pakistan if cigarette taxes are increased in the upcoming federal budget.
The council expressed its concerns in its latest social media post on X (formerly known as Twitter).
In its Taxation Proposals 2024, OICCI has emphasized that the government should broaden the tax base to increase revenue, targeting the informal sector and the growing illicit cigarette market, rather than increasing taxes on compliant businesses.
As per the news, BAT alone is expected to pay Rs220 billion in taxes this fiscal year out of the Rs265bn paid by the entire tobacco sector. Over the past five years, the formal tobacco sector has paid nearly Rs700bn in taxes.
This warning from the largest foreign taxpayer highlights high-level of frustration and sends a negative message to both existing and potential foreign investors.
Furthermore, OICCI has urged the government to consider immediate measures to prevent further departures of foreign investors and gradually achieve the desired FDI to GDP ratio, aligning with regional economies.
