Key Takeaways
- Chairman of Huaye Duddar Mining Project, Zhang Liangeng, urges federal and provincial governments to revise taxation policies.
- Excessive taxes and bureaucratic hurdles are hindering foreign investment in the region, he claims.
- The company faces a 42% federal tax burden despite being granted Export Processing Zone status.
Zhang Liangeng, Chairman of Huaye Duddar Mining Project, has called for significant changes to taxation policies to encourage foreign investment in Balochistan. Speaking during a visit to the region, Mr Zhang highlighted that current tax structures and bureaucratic obstacles are deterring potential investors from entering or expanding operations.
In an interview with Dawn Business, Mr Zhang stated: 'Excessive taxes imposed by both federal and provincial governments are discouraging foreign investment and undermining mining projects in Balochistan. We need a rationalisation of our taxation policies to make the region more attractive for international businesses.'
The company has been granted Export Processing Zone status by the federal government, which was intended to reduce tax burdens and facilitate exports. However, Mr Zhang noted that despite this incentive, his firm is still subject to a 42% federal tax rate, effectively nullifying the benefits of the scheme.
He further elaborated on the challenges faced: 'Our company continues to face significant production challenges due to unnecessary taxes and procedural hurdles imposed by both levels of government. These obstacles are making it difficult for us to operate smoothly and bring in more investment.'
Mr Zhang's call for reform comes at a time when Balochistan is seeking to diversify its economy and attract more foreign direct investment (FDI). The region has been grappling with low investment levels, partly due to the perceived risks associated with operating in an area that faces security challenges.
The provincial government of Balochistan has acknowledged the need for improved business environments but has not yet commented on specific measures to address Mr Zhang's concerns. A spokesperson stated: 'We are committed to creating a conducive environment for businesses, and we will review all relevant policies to ensure they align with our goals.'
Experts in the field of economic development argue that tax reforms could play a crucial role in boosting investment in Balochistan. Dr Muhammad Ali Khan, an economist at the University of Balochistan, said: 'A more competitive tax regime can attract foreign investors and stimulate local industries. It is essential to strike a balance between revenue generation and fostering growth.'
While the federal government has taken steps such as granting export zones status, it needs to work in tandem with provincial authorities to ensure that these incentives are effectively implemented. Mr Zhang's call for rationalisation of tax policies highlights the need for coordinated efforts from both levels of government.
The situation underscores the challenges faced by businesses operating in Balochistan and the potential benefits of addressing them through policy reforms. As discussions continue, stakeholders will be watching closely to see how these issues are resolved.
'Excessive taxes imposed by both federal and provincial governments are discouraging foreign investment and undermining mining projects in Balochistan.'
Zhang Liangeng, Chairman of Huaye Duddar Mining Project
