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  • FATF keeps ‘grey’ status for Pakistan despite significant progress

    FATF keeps ‘grey’ status for Pakistan despite significant progress

    ISLAMABAD: Financial Action Task Force (FATF) on Thursday kept Pakistan in its grey list despite acknowledging significant progress made by the country.

    “As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021,” a statement of the FATF said. 

    The FATF takes note of the significant progress made on the entire action plan. “To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items,” according to the note.

    Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan, including by: demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity, demonstrating enforcement against TFS violations, and working to prevent the raising and moving of funds including by controlling facilities and services owned or controlled by designated persons and entities.

    Pakistan should continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies, namely by:

    (1) demonstrating that TF investigations and prosecutions target persons and entities acting on behalf or at the direction of the designated persons or entities;

    (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; and

    (3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists,  specifically those acting for or on their behalf.

  • Weekly foreign exchange reserves ease to $20.042 billion

    Weekly foreign exchange reserves ease to $20.042 billion

    KARACHI: The weekly position of foreign exchange reserves of the country eased to $20.042 billion by week ended February 19, 2021, the State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.059 billion by week ended February 12, 2021.

    The official foreign exchange reserves held by the central bank slightly increased to $12.909 billion by week ended February 19, 2021 as compared with $12.890 billion a week ago.

    Similarly, the foreign exchange reserves held by the commercial banks fell to $7.133 billion by week ended February 19, 2021 as compared with $7.169 billion a week ago.

  • Foreign direct investment plunges by 27 percent in seven months

    Foreign direct investment plunges by 27 percent in seven months

    KARACHI: The foreign direct investment FDI) has declined by $432 million or 27 percent during first seven months of the current fiscal year as compared with same months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The net inflows of FDI fell to $1.145 billion during July – January 2020/2021 as compared with $1.577 billion in the corresponding months of the last fiscal year.

    The inflows of FDI were at $1.792 billion during the period under review as compared with $2.04 billion in the corresponding period of the last fiscal year. Similarly, the outflows increased by 39.5 percent to $647 million during July – January 2020/2021 as compared with $464 million in the same period of the last fiscal year.

    The portfolio investment in the capital market witnessed massive outflow during the period under review. The outflows from the capital market recorded $237 million during first seven months of the current fiscal year as compared with inflow of $21.5 million in the corresponding months of the last fiscal year.

    The overall investment, including foreign public investment, fell by 78 percent to $755 million during first seven months of the current fiscal year as compared with $3.438 billion in the corresponding period of the last fiscal year.

  • ECC approves tax recommendations for telecom sector

    ECC approves tax recommendations for telecom sector

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved tax recommendations for telecom sector, which were already endorsed by the Federal Board of Revenue (FBR).

    Secretary, Ministry of Information Technology and Telecommunication presented a summary regarding taxation issues of the Telecom Sector.

    The ECC had earlier constituted a sub-committee dated October 20, 2020, under the Chairmanship of the Adviser to the PM Dr. Ishrat Hussain, for due deliberation.

    The sub-committee presented its recommendations before ECC. The Committee approved these recommendations as endorsed by FBR.

    Federal Minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet on Friday.

    Federal Minister for National Food Security and Research Syed Fakhar Imam, Federal Minister for Industries and Production Hammad Azhar, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Revenue Dr. Waqar Masood, SAPM on Power Tabish Gauhar, SAPM on Petroleum Nadeem Babar and Chairman Board of Investment (BOI) Atif Bokhari participated in the meeting.

    Ministry of Industries and Production presented a summary before ECC regarding revision of subsidized prices of essential commodities by the Utility Stores Corporation of Pakistan, in accordance with the earlier directive of ECC dated 28 January, 2021.

    Secretary, M/o Industries and Production presented various proposals to rationalize prices of wheat flour, sugar and ghee in view of continuous fluctuations in international commodity prices.

    After detailed discussion, the ECC approved only partial rationalisation and directed to provide maximum relief to the consumers despite significant price differential between subsidized price offered by the USCs and the prevailing prices in the domestic markets.

    This is in compliance with the Prime Minister’s Relief Package-2020 to provide basic commodities at affordable rates through a network of Utility Stores across Pakistan.

    ECC also approved another summary by the Ministry of Industries and Production for outstanding payment to M/s Ocean Wide Shipping Services, amounting to USD 0.58 million from Pakistan Steel Mills to fulfill a contractual obligation for transportation of coal during the year 2010.

    The ECC considered a summary by the Ministry of Energy (Petroleum Division) regarding tax on payments to the offshore supply contractor to meet the contractual obligation. The ECC established a sub-committee comprising SAPM on Petroleum, Secretary Law Division, Secretary Power Division and FBR with a direction to evaluate the proposal and present workable recommendations before the forum for consideration.

    Ministry of Energy presented another summary about revocation of Neelum Jhelum (NJ) surcharge @ Rs.0.10 per KWH electricity consumers. The ECC considered and approved the revocation of Neelum Jhelum surcharge (with immediate effect).

    Secretary, Ministry of National Food Security and Research placed a summary before ECC regarding a mechanism for disbursement of subsidies in line with the Prime Minister’s Fiscal Package for Agriculture in the backdrop of COVID-19 pandemic. The summary was approved by the ECC for timely disbursements of subsidies to the Provinces by the M/o NFS&R subject to clearance by the Finance Division.

    The ECC also considered and approved a summary regarding Government’s sovereign guarantee for a PSDP project titled National Electronics Complex of Pakistan (NECOP, executed by National Engineering and Scientific Commission.

    Following Technical Supplementary Grants were also approved:

    • Rs. 550 million for Special Communications Organization (SCO) from Ministry of Information and Technology during the FY 2020-21.

    • Rs. 200 million were approved (out of total allocation of RS. 362.239 million) to Special Technology Zones (STZA) during the current financial year.

    • Rs. 109 million to Ministry of Information and Broadcasting (MOIB) to clear outstanding Bills related to media campaigns on behalf of Ehsaas Program during FY 2019-20.

  • Foreign exchange reserves ease to $20.058 billion

    Foreign exchange reserves ease to $20.058 billion

    KARACHI: The country’s foreign exchange reserves eased by $15 million to $20.058 billion by week ended February 12, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.073 billion by week ended February 04, 2021.

    The official foreign exchange reserves of the central bank fell by $60 million to $12.889 billion by week ended February 12, 2021 as compared with $12.949 billion a week ago.

    However, foreign exchange reserves held by the commercial banks increased by $45 million to $7.169 billion by week ended February 12, 2021 as compared with $7.124 billion a week ago.

  • IMF projects Pakistan’s economic expansion by 1.5pc in current fiscal

    IMF projects Pakistan’s economic expansion by 1.5pc in current fiscal

    ISLAMABAD: The International Monetary Fund (IMF) has projected Pakistan’s economic expansion by 1.5 percent during the current fiscal year 2020/2021 while praising efforts of Pakistani authorities in taking measures amid coronavirus pandemic.

    The economic during the last fiscal year recorded negative growth of 0.4 percent.

    This was noticed by the IMF while reaching staff level agreement with Pakistani authorities.

    The IMF issued a press release on Tuesday after reaching on a package of measures to complete second to fifth reviews of the authorities’ reform program supported by the IMF Extended Fund Facility (EFF).

    The package strikes an appropriate balance between supporting the economy, ensuring debt sustainability, and advancing structural reform. Pending approval of the Executive Board, the reviews’ completion would release around $500 million.

    The IMF noted that the COVID-19 shock temporarily disrupted Pakistan’s progress under the EFF-supported program. However, the authorities’ policies and allowing higher than expected COVID-related social spending, have been critical in supporting the economy and saving lives and households.

    It further noted that the Pakistani authorities remain committed to ambitious policy actions and structural reforms to strengthen economic resilience, advance sustainable growth, and achieve the EFF’s medium-term objectives.

    An International Monetary Fund (IMF) team led by Ernesto Ramirez Rigo, concluded virtual discussions with the Pakistani authorities and reached a staff-level agreement on the second to fifth reviews of the authorities’ reform program supported by the IMF 39-month Extended Fund Facility (EFF) arrangement for the amount of SDR 4,268 million (about US$6 billion).

    This agreement is subject to the approval of the IMF’s Executive Board. The reviews’ completion would release around US$500 million.

    At the end of the discussions, Ramirez Rigo issued the following statement:

    “The policies and reforms implemented by the Pakistani authorities prior to the COVID-19 shock had started to reduce economic imbalances and set the conditions for improving economic performance. Most of the targets under the EFF-supported program were on track to be met. However, the pandemic disrupted these improvements and required a shift in authorities’ priorities towards saving lives and supporting households and businesses. To a large extent, the authorities’ response was enabled by the fiscal and monetary policy gains attained in the first nine months of FY2020. Aside from health containment measures, this included a temporary fiscal stimulus, a large expansion of the social safety net, monetary policy support and targeted financial initiatives. These were supported by sizeable emergency financing from the international community, including from the Fund’s Rapid Financing Instrument (RFI).

    “As result of the authorities’ actions, the COVID-19 first wave started to abate over the 2020 summer and the impact on the economy was significantly reduced. The external current account improved, due to stronger-than-expected remittances, import compression, and a mild export recovery. High-frequency economic data also started to point to a recovery. Considering these improvements, the economy is projected to expand by 1.5 percent in FY2021 from the -0.4 percent in FY2020. Still, with the COVID-19 second wave still unfolding around the world, the outlook is subject to a high level of uncertainty and downside risks.

    “The Covid-19 shock has required a careful recalibration of the macroeconomic policy mix, the reforms calendar, and the EFF review schedule. Against this background, the authorities have formulated a package of measures that strikes an appropriate balance between supporting the economy, ensuring debt sustainability, and advancing structural reforms. The fiscal strategy remains anchored by the sustainable primary deficit of FY2021 budget and allows for higher-than-expected COVID-related and social spending to minimize the short-term impact on growth and the most vulnerable. The targets are supported by careful spending management and revenue measures, including reforms of corporate taxation to make it fairer and more transparent. The power sector’s strategy aims at financial viability, through management improvements, cost reductions, and adjustments in tariffs and subsidies calibrated to attenuate social and sectoral impacts.  

    “The State Bank of Pakistan (SBP)’s monetary and exchange rate policies have served Pakistan well and were critical in helping to navigate the COVID-19 shock. The strengthened international reserves’ position since the start of the program—with gross reserves almost doubling to USD 13 billion until January 2021 and net international reserves (NIR) increasing by over USD 9 billion until December 2020—and the shock absorption displayed by the market-based exchange rate, allowed the SBP’s to pre-emptively proceed to a large easing of monetary policy, and a sizeable expansion of refinancing facilities. The banking system remains healthy, but it will be important for the SBP to continue to remain vigilant and prevent possible financial stability stress as the temporary support is phased out. International reserves are set to improve further reflecting current account developments, the EFF resumption, and international partners’ support. 

    “The authorities are moving steadfastly on a number of other important reforms, including on strengthening regulatory agencies’ legal frameworks (NEPRA and OGRA Acts), consolidating SBP’s autonomy (SBP Act), and improving state owned enterprises (SOE) management (SOE Law). In addition, they have conducted a triage of SOE, and are moving forward with the audits of contracts awarded for COVID-19 related spending. They continue to enhance the effectiveness of their anti-monetary laundering/counter financing of terrorism (AML/CFT) framework and progress in completing their action plan with the Financial Action Task Force (FATF).”

  • Weekly foreign exchange reserves slip by $90 million

    Weekly foreign exchange reserves slip by $90 million

    KARACHI: Foreign exchange reserves position eased by $90 million to $20.073 billion by week ended February 04, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.163 billion by week ended January 29, 2021.

    The official foreign exchange reserves of the central bank also fell by $82 million to $12.949 billion by week ended February 04, 2021 as compared with $13.031 billion a week ago.

    Similarly, the foreign exchange reserves held by commercial banks witnessed decline by $8 million to $7.124 billion by week ended February 04, 2021 as compared with $7.132 billion a week ago.

  • Prime Minister issues directives for reducing burden of indirect taxes

    Prime Minister issues directives for reducing burden of indirect taxes

    ISLAMABAD: The government has started easing burden of indirect taxes to provide relief to the masses. In this regard Prime Minister Imran Khan has issued instructions to relevant ministries for preparing proposals.

    Meeting of the Federal Cabinet was chaired by Prime Minister Imran Khan at Islamabad on Tuesday.

    The Prime Minister apprised the meeting that relevant ministries have been directed to present proposals for reducing the burden of indirect taxes, particularly on food items in order to provide relief to the masses.

    The federal cabinet approved Tax Laws (Amendment) Ordinance 2021. These amendments are aimed at facilitating transaction under Digital Roshan Pakistan scheme.

    It was apprised that $ 500 million have been transacted through Digital Roshan Pakistan scheme so far.

    The Cabinet accorded approval for 3 months extension of Afghanistan-Pakistan Transit Trade Agreement (APTTA 2010). The existing agreement is due to expire on 11th February, 2021.

    The Cabinet was also briefed about the measures taken to control smuggling at Pak-Iran and Pak-Afghanistan borders.

    The Cabinet expressed serious concerns over the report, according to which Sindh Government released 32,000 tons of wheat that was a 6 years old stock and unfit for human consumption.

    The Cabinet noted that Sindh did not release wheat timely for public need and did not share Wheat and Sugar stock position with the Federal Government which resulted in artificial price hike and issues of hoarding, on one hand, and wastage of available wheat stock that could have been utilized for public good.

    The Cabinet was apprised about the updated status of actions taken pursuant to Sugar Enquiry Committee Report. It was informed that several sugar mills had approached courts of law and action is underway after completion of court proceedings. The Cabinet was also informed that NAB was looking into the issue of subsidies.

    Chairman, Task Force on IT & Telecom briefed the Cabinet about progress made for development of IT and Telecom sector.

    The Cabinet was updated on Vacant Positions of Heads / CEOs of Public Sector Organizations. It was informed that since 2018, 56 Heads / CEOs have been appointed to Public Sector Organizations in a merit based and transparent manner.

    The meeting was informed that at present 86 posts of heads/CEOs were vacant. The Prime Minister expressed displeasure over the vacant positions and directed Secretary Establishment Division to furnish a report before the Cabinet citing reasons for delay in appointments.

    The Cabinet was apprised about Metro Bus Project, Islamabad. Chairman NHA informed that infrastructure work has been completed and the project is ready to be handed over to CDA. Minister for Interior was tasked by the Cabinet to present a road-map for handing-over of the project from NHA to CDA and operationalization plan.

    The Cabinet accorded approval for Mutual Legal Assistance requests from Non-Treaty Countries.

    The Cabinet approved appointment of Chief Metropolitan Officer as Administrator, Metropolitan Corporation, Islamabad for 6 months or till the time new Local Government setup is in place, whichever is earlier.

    The Cabinet approved establishment of 30 Additional Accountability Courts in implementation of Hon. Supreme Court’s orders. These courts are to be established in Karachi, Lahore, Multan, Peshawar, Rawalpindi, Sukkur, Hyderabad and Quetta. The Prime Minister directed that first phase of establishment be completed on priority.

    The Cabinet approved appointment of Masroor Khan as Chairman, Oil & Gas Regulatory Authority (OGRA).

    Cabinet ratified decisions taken in Economic Coordination Committee (ECC) meeting held on 3rd & 8th February, 2021; and Cabinet Committee on Energy meeting held on 4th & 8th February, 2021.

    The Cabinet was briefed on negotiations held with Independent Power Producers (IPPs). It was informed that the Government will benefit to the tune of Rs. 800 billion over a period of 20 years. It was apprised that the present Government is clearing a liability of approx. Rs. 400 billion after pre-audit. The Cabinet was apprised that a high level committee has been established comprising of two Hon. Supreme Court Judges and the Auditor to decide on the disputed amount of Rs. 57 billion claimed by IPPs. The Cabinet was informed that as a result of negotiations, the Government saved Rs. 32 billion against an adjudicated claim of Rs. 92 billion by IPPs. It was clarified that the Government has not surrendered any of its rights in the negotiations process. The Cabinet was informed that this process will result in a direct benefit of reduction in energy prices for the consumers. The Cabinet appreciated efforts of the Negotiations Committee.

     The Prime Minister directed that unscheduled load shedding should not be practiced in any part of the country and directed Minister for Energy to conduct in-depth investigations for load-shedding occurring due to technical reasons.

    The Cabinet accorded approval for exemption of PPRA regulations for import of 300,000 tons Wheat and 500,000 sugar.

  • SECP’s total company registration increases to 134,797

    SECP’s total company registration increases to 134,797

    ISLAMABAD – The company registration by the Securities and Exchange Commission of Pakistan (SECP) recorded a significant milestone in January 2021 with the registration of 2,201 new companies, bringing the total number of registered entities in the country to 134,797, according to an official statement released on Monday.

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