ISLAMABAD: Chief Justice of Pakistan (CJP) Umar Ata Bandial has said that the tax regime for the businessmen must be reliable and consistent with a transparent regulatory framework for the protection of the investors to provide a level playing field in Pakistan.
Justice Bandial was delivering his keynote address at the Securities and Exchange Commission of Pakistan (SECP) symposium on Corporate Supervision and Regulatory Actions – Challenges and Reforms, here on Saturday.
The second day of the symposium was dedicated to stakeholder consultation to suggest way forward with respect to issues relating to company court rules, mergers, liquidations, RegTech, Suptech, Digitisation, and the adoption of ADR.
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Justice Bandial said, “We need to provide certainty, fair taxation, and transparent regulation for business growth”. He noted that the SECP’s primary responsibility is to protect minority shareholders and small investors. When there is no certainty, people take short-term decisions. Good business requires transparent regulation and timely and fair disclosure of information. Justice Bandial extended support for any statutory amendments in this regard.
“The independent power producers (IPPs) came to Pakistan and made 30 years of long-term investment because the government provided them a guarantee of tariff protection”, he said.
He said the government should give fair treatment under tax laws to the businessmen and investors. He quoted an example that people have declared money and for business purposes they need to keep a fund outside Pakistan. There may be business reasons for this purpose.
The law allows companies to have foreign currency accounts abroad. Recently, fully-taxed money lying in foreign currency accounts abroad has been subjected to further tax. There must be some reasons behind this taxation. Surprises come for the businesses. Don’t surprise businessmen if you want business to thrive, the CJP stated.
If there are monopolies, you would not find big investors who are ready to compete with the monopolies. We also need protection to the minority shareholders to avoid their exploitation by the majority shareholders. The rights of the minority shareholders must be protected by the SECP, he added.
The chief justice said that the court system is overworked. The regulators can help reduce the burden on courts by playing their due role in settling corporate disputes via ADR. He concurred with the proposed amendment to the SECP Act for constituting corporate tribunals.
Acknowledging the role of the SECP, he said that within the corporate system, the Commission has a regulatory role, while outside the corporate system there is a responsibility to influence policy and raise awareness to government entities and departments about potential disruptions to the environment. He said the regulatory bodies should form their own tribunals as not doing so places an extra burden on the judiciary.
He said business-friendly initiatives are essential but the Supreme Court looks at the law according to the Constitution and whether it is conducive to providing business opportunities. The country’s progress is tied to business growth so initiatives conducive to businesses are important, he added.
Justice Bandial said Article 25 of the Constitution of Pakistan is about the equitable distribution of resources and the apex court can only determine whether a subsidy granted by the government is non-discriminatory or not.
The chief justice asked the gathering, “Do you know if you look back into history, our governments used to prepare five-year economic programmes. That was because it provided certainty. Today we don’t do that. And because we deal with such issues and consider different options available to solve a problem.”
He also stressed the importance of learning new tech and artificial intelligence. “I am not good at IT. So I can maybe operate the computer but that’s about all. I believe (ChatGPT) is excellent but I haven’t ventured into it but some of my younger colleagues are doing it. So we need to build capacity,” said the CJP.
Highlighting the importance of strengthening the auditor general of Pakistan, the CJP said that the body should be made independent to check the accounts independently for accountability purposes. “We have to make him (AGP) strong so that he can go and check the accounts on his own because whenever you have an issue about accountability it goes into the accounts.”
The chief justice said that the National Accountability Bureau (NAB) needs to take action against housing schemes, which do not possess the land. He was of the view that regulations should be made easier for the public while the efficiency of high courts should be improved by reducing the burden on them.
He said that multiple interpretations of one law give rise to problems or conflicts, adding that repeated interpretation of law gives rise to conflict and differences in interpretations must be reconciled by experts. “Two interpretations of one law causes problems,” said the CJP.
Copyright Business Recorder, 2023
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