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Business

January 11, 2018

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Japanese firms raise alarm over investment hurdles

Japanese firms raise alarm over investment hurdles

LAHORE: Asad Majeed Khan, Pakistan’s ambassador in Tokyo, has said different government departments were creating hurdles in the way of Japanese investors, which was denting their existing investments and deterring the new ones, The News learnt on Wednesday.

The ambassador shared his reservations with Secretary Foreign Ministry Tehmina Janjua in a letter, whose copy is available with The News.

The concerns are mostly related to Board of Investment (BoI) Karachi office, Federal Board of Revenue (FBR), and Karachi’s law enforcement agencies.

The ambassador quoting his meetings with Japanese businessmen stated that they were keen to further invest in Pakistan but the problems faced by them were affecting their expansion and new investment plans.

The major concerns come from BoI Karachi as, according to the letter, Japanese businesses are mostly concentrated in the coastal city.

“The BoI office in Karachi lacks the authority to resolve problems faced by the Japanese companies and they have to frequently fly between Karachi and Islamabad for resolving even minor issues,” the ambassador said in the letter.

He added that in order to address this problem, Japanese investors have proposed that the BoI’s resident director in Karachi may be empowered to settle the issues up to a certain level.

Ambassador Khan also wrote in the letter that Japanese investors were facing delays in the sanctioning of refunds and other tax benefits, assured to them by the authorities at the time of investment.

“In their view, there seems to exist a disconnect between policymaking and operational sides of the FBR, which needs to be fixed,” the envoy said.

He added, the security situation in Karachi was also of deep concern to them. “Japanese nationals have faced a number of street crimes in Karachi, which is a general concern, but speedy facilitation by the police will be very helpful,” ambassador Khan said.

The ambassador, however, appreciated the government for the successful implementation of its counterterrorism strategy and improvement in the overall law and order situation.

“Japan has made a policy decision to diversify its global investment presence and is exploring investment opportunities in other countries and Pakistan with low cost and young labour force is still an attractive option for Japanese investors,” Khan added.

Taking notice of the ambassador’s concerns, Foreign Secretary Tehmina Janjua instructed the chairman BoI Naeem Zamindar and chairman FBR Tariq Pasha to resolve the issues on urgent basis to pave way for enhancing Japanese investment in Pakistan.

An official at the FBR said that the board had already expedited the refunding process for all the taxpayers without any discrimination.

“Japanese firms in Pakistan, especially auto companies had raised the same issues with former finance minister Ishaq Dar’s through Japanese ambassador in Pakistan,” the official said.

Commenting on the issue, a BoI functionary said that policy decisions were taken only at the board’s head office.

“However, the BoI board of directors, which is chaired by Prime Minister of Pakistan, can empower any resident director in any matter,” he added.

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