The federal government has decided to abolish a 28-year-old law named ‘Protection of Economic Reforms Act’ (PERA) that facilitates billions of dollars in money laundering and tax evasion every year.
The repeal is part of the proposed Investment Act that aims to attract foreign direct investment in the country and has the backing of the federal cabinet.
Under the same move, the PTI government is also considering to revoke the Foreign Private Investment Act of 1976.
The Board of Investment (BOI) has prepared the initial draft of the bill and circulated it for input from federal and provincial stakeholders. Once endorsed, the bill will be tabled before the federal cabinet for approval and then the Parliament.
Besides attracting foreign investment, the bill also aims to the right the wrongs that were done 28 years ago for “creating a liberal environment for savings and investments in Pakistan.”
Former premier Nawaz Sharif had introduced PERA in 1992, which helped industrialists and politicians whiten their black money.
A board of investment member has confirmed the development of media, saying that the move is aimed at bridging the gaps between investment laws and policies. The consolidation of investment regulations will help both the government and potential investors, he said.
The BOI member highlighted the loopholes in PERA 1992 and quoted some of the Sections to fortify his claims.
Sections 5 and 9 of the PERA, 1992 and Section 111(4) of the Income Tax Ordinance, 2001, have guaranteed complete immunity from disclosing the source of assets.
The new investment law encourages foreign investors to inject money into “any and all sectors of the economy,” other than certain areas.
All sectors and activities are open for foreign investment unless specifically prohibited or restricted for reasons of national security and public safety.
The fields of media and manufacturing of consumable alcohol, arms and ammunition, atomic energy, high explosive and currency, and mint sectors will not be entitled to foreign investment.