The American Business Council (ABC) is urging the Pakistani government to reconsider a new policy that disallows 25% of Sales Promotion, Advertising, and Publicity (SAP) expenses. The council argues that this policy unfairly targets foreign investors, specifically multinational corporations (MNCs) that rely heavily on advertising to sell their products.
According to the American Business Council, the policy will lead to higher tax liabilities for foreign companies and create an uneven playing field that favors local businesses. They also warn that the retroactive application of the policy will damage Pakistan’s reputation as an attractive investment destination.
The American Business Council delegation met with Pakistani government officials, including the Federal Minister for Investments and the Chairperson of the Senate Standing Committee on Finance, to express their concerns. They highlighted the significant contributions of MNCs to Pakistan’s advertising and media industry and warned that the new policy could stifle innovation in these sectors.
The American Business Council represents over 60 American companies that have invested billions of dollars in Pakistan. They argue that a substantial investment in marketing and advertising is essential for establishing a new brand in a foreign market. They believe the new policy discourages future investment from the United States and other countries.
