ISLAMABAD: Board of Investment (BoI) is said to have sought details of Local Deployment Policy from the State Bank of Pakistan (SBP), according to which foreign companies are allowed to deploy their dividend and earn interest/ profit on it rather than being left idle in their accounts as both can also be repatriated as the country’s foreign exchange reserves improve, well informed sources in BoI told Business Recorder.

Sharing the details, sources said, an inter-ministerial meeting on the subject was held on May 2, 2024 in the Board of Investment (BoI) under the chairmanship of Secretary, BoI, Ambreen Iftikhar.

Secretary, BoI apprised participants that Prime Minister’s Office during a meeting had directed that before making briefing/ presentation by ministries, a complete inter-ministerial meeting be held for consultations on mutual matters and cross cutting issues.

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Director General (Policy), BoI, Zulfiqar Ali pointed out that presently Special Economic Zones (SEZS) are facing three major issues; i.e., reversal of turnover tax, tax on dividends and provision of utilities issues at SEZs.

In this regard, representative of Power Division informed that ample electricity is available for Rashakai SEZ. On the query of JW SEZ in Lahore, he informed that enterprises/ companies in the SEZs/ Industrial Parks do not pay infrastructural expenses and the burden is transferred to the general consumers and paid by them, which is against the spirit and practice of the SC zones.

He also informed that issue has been raised many times in the past and agreed that expenses incurred on the infrastructure may be paid through PSDP.

As per the directives of Special Investment Facilitation Council (SIFC), a PC-I has been prepared by the Power Division and submitted to the Planning Commission.

Ghazala Abid, Chief (Planning Commission) informed that updated status of PC-1 could be traced online at (iPAS) website of Planning Commission. Secretary, BoI desired that copy of the PC-I and its present status may be shared with BoI.

Director (PRMI), BoI, Mahmood Tufail pointed out that CDWP & ECNEC meetings are being frequently held nowadays at Planning Commission. Thus, the Power Division is requested that PC-I may be placed at CDWP/ ECNEC level for inclusion in the Green Book so that funds could be ensured, and project of provision of electricity to JW SEZ be started at the earliest.

Secretary, BoI desired that SEZ Wing may share information about availability and requirements of all utilities in all SEZs across the country including requirement of PC-I for PSDP to take up the cases with relevant authorities.

DG (Policy) informed that issues regarding repatriation of funds by foreign investors are of concern and highlighted by investors many times. In response, Additional Director (SBP), Muhammad Tahir informed that there were some restrictions and limitations owing to foreign exchange reserves. Now, the situation has improved, and backlog of dividend repatriations are being cleared. Similarly, debt obligations have also been made as per schedule by the SBP.

He also mentioned that SBP has developed a queue process for repatriations of dividend by the companies. As per the turn of these companies, repatriation of funds is allowed accordingly. He also pointed out that the Local Deployment Policy is also in place in case of repatriation of a large amount by the company.

As per Policy, the company is allowed to deploy the dividend and earn interest/ profit on it rather than being left idle in their accounts. Both can also be repatriated as foreign exchange reserves improve. It was desired that the amount in question be shared with BoI to be conveyed to the Prime Minister.

Director General Policy/ Legal) pointed out that there was a directive for the Ministry of Industries & Production to share development plan of SEZs and EPZs which was later handed over to BoI. Accordingly, BoI has prepared a development plan for SEZS. However, M/o Industries & Production may share the development plan of EPZs along with comments, if any.

Joint Secretary, MoI&P, Fayyaz Wazir informed that matter is being dealt with by the PIDC and requisite information will be shared by the concerned, shortly.

Director General (Policy/ Legal) BoI appreciated the work and collaboration of SECP with BoI and desired that any proposals, to ease out the business reforms, from SECP be shared at the earliest to be placed before the Prime Minister in the presentation of BoI.

Copyright Business Recorder, 2024

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