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  • Investigation launched against 88 housing schemes

    Investigation launched against 88 housing schemes

    ISLAMABAD: Competition Commission of Pakistan (CCP) has initiated investigation against around 88 housing schemes for deceptive marketing practices.

    In a statement on Monday, the CCP said that it had launched the enquiry while taking notice of the widespread concerns and complaints regarding the prima facie deceptive market practices by various housing schemes in Punjab.

    The CCP said that the Lahore Development Authority (LDA) informed through a letter that 88 housing schemes in Lahore and its adjacent district of Kasur, Sheikhupura and Nankana Sahib were luring investors and the general public through print and TV advertisements to invest in their schemes, without meeting the legal requirements and in violation of the pertinent laws.

    The LDA has sought a ban on the advertising campaign of these schemes to save the citizens from financial losses.

    The CCP took suo moto notices and authorized an enquiry team to thoroughly probe the housing schemes and submit the report to the Commission.

    As part of the investigation the team had visited 62 housing schemes to see the situation on ground and was scheduled to visit the remaining housing schemes.

    The team also met the Director General LDA and other concerned officials to enlighten itself about the pertinent issues and explore the ways to cooperate and coordinate in the areas of shared interests.

    The CCP said that Section 10 of the Competition Act prohibits businesses from indulging in deceptive market practices, which also include the distribution of false or misleading information lacking reasonable basis, deceiving the consumers, and harming the business interest of the other undertakings.

    If the violation of Section 10 is proved against the housing schemes, the CCP may issue show cause notices to them, according to the statement.

    The CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive behavior including deceptive market practices.

  • Import bill plunges by 17.06% in first half

    Import bill plunges by 17.06% in first half

    KARACHI: Pakistan’s import bill fell by 17.06 percent during first six months (July – December) 2019/2010 owing to deceleration in international commodity prices and lower domestic demand.

    According to data released by the ministry of commerce, the import bill reduced to $23.18 billion during first half of current fiscal year as compared with $27.94 billion in the corresponding half of the last fiscal year.

    The exports exhibited 3.21 percent growth during the period under review owing to better earning of local manufacturers in the international markets.

    The total exports were at $11.54 billion during July – December 2019/2020 as compared with $11.18 billion in the corresponding period of the last fiscal year.

    The lower import bill brought down the trade deficit by 30.58 percent for the period under review.

    The trade deficit declined to $11.64 billion during July-December 2019/2020 as compared with the deficit of $16.77 billion in the corresponding period of the last fiscal year.

    According to trade data for the period July – December 2019/2020 revealed that the import of motor cars in completely build unit (CBU) fell by 80 percent to $31 million as compared with $156 million.

    While import of CKD (Completely Knocked Down) motor cars fell by 46 percent to $229 million in first six months of current fiscal year as compared with $426 million in the same period of the last fiscal year.

    The import of petroleum crude declined by 30 percent to $1.7 billion during first six months of current fiscal year as compared with $2.42 billion in the corresponding months of the last fiscal year.

    While import of petroleum products fell by 24 percent to $2.59 billion during July – December 2019/2020 when compared with $3.41 billion in the same period of the last fiscal year.

    According to top performing export items, basmati rice posted 56 percent increased to $380.2 million during first six months of current fiscal year when compared with $244 million in the corresponding period of the last fiscal year.

    Export of meat posted 52 percent growth to $155.9 million during July – December 2019/2020 when compared with $103 million in the corresponding period of the last fiscal year.

    The exports of readymade garments registered increase of 12 percent to $1.41 billion during first half of current fiscal year as compared with $1.26 billion in the same half of the last fiscal year.

  • Achieving 4% GDP growth target unlikely: SBP

    Achieving 4% GDP growth target unlikely: SBP

    The State Bank of Pakistan (SBP) issued a cautionary statement on Monday, stating that achieving the targeted 4 percent GDP growth for the current fiscal year is unlikely.

    (more…)
  • Pakistan’s foreign exchange reserves increase to $18.081 billion

    Pakistan’s foreign exchange reserves increase to $18.081 billion

    KARACHI: The liquid foreign exchange reserves of the country increased by $486 million to $18.081 by week ended December 27, 2019 as compared with $17.595 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by the central bank increased by $582 million to $11.489 billion by week ended December 27, 2019 as compared with $10.907 billion a week ago.

    The SBP attributed the increase to bilateral and multilateral inflows including proceeds of US$ 452.4 million received from IMF under EFF program.

    The foreign exchange reserves held by commercial banks however declined by $95 million to $6.592 billion by week ended December 27, 2019 as compared with $6.687 billion a week ago.

  • Headline inflation increases by 12.6% in December 2019

    Headline inflation increases by 12.6% in December 2019

    In a concerning economic development, Pakistan’s headline inflation, as measured by the Consumer Price Index (CPI), has surged by 12.6 percent in December 2019 on a Year-on-Year (YoY) basis, according to the latest report from the Pakistan Bureau of Statistics (PBS).

    (more…)
  • ECC allows duty free import of cotton

    ECC allows duty free import of cotton

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved duty-free import of cotton.

    The ECC took the decision at a meeting held here under the chairmanship of Advisor to Prime Minister on Finance and Revenue, Hafeez Shiekh in the chair.

    The meeting also allowed cotton import through the Torkham border.

    The ECC was informed that Cotton remained duty-free till the slab of zero percent was abolished in 2014-2015 and Custom Duty of 1 percent was imposed along with 5 percent Sales Tax.

    Later on, 1 percent slab was increased to 2 percent and then 3 percent along with 2 percent additional customs duty to make it 5 percent.

    Since 2017 the duties are withdrawn from January/February and re-imposed in July-August. It was also discussed that by January 01, 2010 the majority of the cotton would be lifted from the farmers.

    Therefore, to further protect the farmers, the meeting allowed duty-free import of cotton with effect from January 15, 2020.

    The ECC was also briefed that under Rule 28 of the Plant Quarantine Rules of 1967 / Plant Quarantine Act 1976, cotton is only allowed through sea route.

    As trade with India is currently suspended by Pakistan, therefore, Afghanistan and the Central Asian states are the more viable economic sources for the import of cotton.

    The ECC allowed import of cotton from Torkham Border subject to fulfillment of all sanitary and phytosanitary (SPS) conditions.

    The ECC also desired that a comprehensive briefing may be given by the Ministry of National food Security and Research on matters pertaining to cotton production for next cotton season.

    It may be noted that during first five months of current financial year, i.e. July-November 2019-20, the value-added readymade garments have increased by 35 percent, knitwear by 6 percent and bedwear by 14 percent in quantity terms as compared to the corresponding period of the previous year.

  • IMF acknowledges Pakistan’s reform program on track: finance ministry

    IMF acknowledges Pakistan’s reform program on track: finance ministry

    ISLAMABAD: The ministry of finance has said that International Monetary Fund (IMF) has acknowledged Pakistan’s reform program on track and business and market confidence is returning.

    In a statement on Sunday, the finance ministry highlighted IMF Board Assessment key economic performance indicators.

    It said that on the completion of first review of Pakistan’s economic performance, IMF has acknowledged that Pakistan’s reform program is on track and already producing results.

    Decisive policy implementation has started to address the deep-seated problems of Pakistan’s economy and to reverse its large imbalances, preserving financial stability.

    The report acknowledges that the business climate has improved, and market confidence is returning.

    IMF further adds in its assessment that the Government recognizes that structural reforms, especially in SoE sector are key to revive economic activity and growth.

    IMF has released SDR 328 million (about $ 452.4 million), bringing total disbursements to SDR 1,044 million (approx $1.45 billion).

    The report has confirmed that End-September performance criteria (PCs) were observed with wide margins. These include

    — Zero budgetary borrowing from SBP

    — Primary budget deficit ceiling

    — Ceiling on government guarantees

    — Zero external public payment arrears

    — SBP net international reserves (NIR), net domestic assets (NDA), and swaps/forwards targets all met

    In addition to above, all structural benchmarks (SBs) for end-September, except the SB on AML/CFT, were completed.

    With regard to inflation outlook, IMF has lowered Inflation projection for FY20 to 11.8 percent, down from 13 percent earlier on account of this fact that the administrative and energy tariff adjustments are expected to offset the effects from weak domestic demand. Thereafter, inflation is expected to converge to 5-7 percent.

    The report confirms that inflation has been started to stabilize, along with core inflation, and the SBP stance is appropriate (no need for further rate hikes).

    However, we are of the view that we will do much better than IMF projection. As inflation during Jul-Nov was 10.8 percent and with measures taken we target to bring inflation down to 5 percent over the medium term.

    With regard to the external sector, significant improvement has been witnessed. Overall, Current Account Deficit (CAD) shrunk by almost two-thirds (74 percent) in the Q1 FY 20 compared to the same period of FY 2019. CAD is projected to decline to 2.4 percent of GDP in FY20 (4.9 percent), which is lower than earlier IMF forecasts of 2.6 percent.

    Total imports fell by 23 percent y-o-y in Q1 of FY2020, but imports of machinery and equipment were more resilient, rising about 2 percent y-o-y. Exports are showing some sign of recovery, up 2 percent y-o-y for the same period with 17 percent volume growth, mainly driven by food and textiles.

    The report states that transition to a market determined exchange rate has allowed the rupee to find its new equilibrium quickly, thereby, successfully correcting the ‘exchange rate overvaluation’ of the last 5 years.

    The report has also acknowledged strong Fiscal performance in the First Quarter of FY2020 while stating Primary surplus of 0.6 percent of GDP and an overall deficit of 0.6 percent of GDP, about 1 percent of GDP better than programmed.

    In addition, Tax revenue growth was in double-digits (net of refunds) even though customs receipts and other external sector related taxes have suffered due to import compression.

    Key Concessions won by Government includes:

    Ceiling on NDA of SBP (Performance benchmark) has been enhanced to Rs 9.1 trn (8.7), an increase of Rs 339 billion in FY20.

    This is positive for growth and will be utilized for concessional financing for the export industry

    Ceiling on government guarantees has been enhanced to Rs 1.8trn (1.6), an increase of Rs 252 billion in FY20

    This is positive for growth and will allow government to settle the outstanding stock of circular debt

    Floor on FBR tax collections for FY20 has been revised lower to Rs 5.2trn (5.5), due to strong improvement in non-tax revenue

    During H1 Fy20, government non tax revenue collection has hit Rs 878 billion which is 75 percent of full year budgeted collection of Rs 1.16 trn.

    This is positive for growth and will ease the burden on public and businesses

    The finance ministry highlighted Current Economic Performance:

    Pakistan economy has witnessed significant improvements in recent months as evidenced from the performance of key economic indicators mentioned below:

    Exchange rate is stable for 5 months, Rupee appreciated by 3.2 percent (Rs/$ 160.1 to 154.89)(20th Dec, 2019), Stock Exchange 100-Index up 20.1 percent since 1st July, 2019 (33,996) to 40,832(20th Dec, 2019) , SBP FX Reserves increase to $ 10.8 billion (13th Dec, 2019), from 7.2 billion (June 2019) , Ease of Doing index up by 28 points (108/190) and World Bank rank Pakistan in Top 10 improvers.

    After 4 years of outflow, total foreign portfolio investment up $ 1.2 billion during Jul-Nov FY20 (-330 million last year). FDI increased to 850 million (477.3 million last year)↑ 78.1 percent. Total foreign investment reached to $2 billion (last year 147 million).

    Similarly, Incorporation of Companies increased 25.8 percent (7,177 from 5,707) during Jul-Nov FY2020.

    FBR tax collection grew by 16.8 percent to Rs 1615.2 billion during July-November, FY2020 against Rs 1382.9 billion last year. Within total FBR tax collection Domestic tax collection grew up 21.5 percent and Import taxes down 2.6 percent (import compression)

    On external side, Exports increased by 4.7 percent to $10.31 billion during July-November, FY2020 against $9.85 billion in the same period last year, while Imports decreased by 21.1 percent to $18.31 billion during July-November, FY2020 against $23.22 billion in the same period last year.

    Consequently, Trade deficit decreased 40.1 percent to $8.002 billion during July-November, FY2020 against $13.36 billion in the comparable period of last year.

    Cement dispatches increased by5.8 percent to 20.462 million ton (15.4million ton). Cement export increased 21.5 percent to 3.608 million ton (2.4 million ton).

    Other Developments include:

    PSDP releases system is accelerated. In this regard ways & means and Finance Division endorsement is eliminated.

    As a major development, PSX becomes best performing market as per Bloomberg in last three months. PSX benchmark KSE 100-Index gained around 10,500 point in last three months.

    Similarly, the Moody’s Investors Service upgraded Pakistan’s credit rating outlook to stable from negative.

    On external front, in the month of November, 2019 Exports increased 11.23 percent to $2.110 billion against $1.897 billion in the same month last year while Imports decreased 13.18 percent to $3.648 billion as compared with $4.202 billion in the comparable period last year.

    In October 2019, on M-o-M, LSM registered a growth 4.01 percent (Sep 1.9 percent), indicating upward trajectory. Cement dispatches increased 10.6 percent in November to 4.35 million ton (3.9 million ton).

    Another important development is that Karkey renegotiated to save Pakistan $ 1.2 billion.

    Circular Debt:

    Monthly flow decreased from Rs 38 billion in July 2019 to about Rs 10 billion. Targeted to be zero next year.

    Strategy for dealing with the stock of debt being finalized.

    Protection for lower end consumers <300 from price rationalization.

    More effective recovery/detection of electricity theft (>50 million).

    Ministry of Energy will issue an additional Rs 250 billion Sukuks (with government guarantee) in FY2020 to retire the CPPA liabilities of the IPPs.

    Compact for Jobs & Growth

    Scale up Affordable Housing devised by Naya Pakistan Housing Authority

    Additional budgetary allocation of Rs 20 billion to 30 billion in FY2020 to cover the 10 percent down payment by beneficiaries of affordable housing. The total impact of this stimulus to the economy would be equivalent to Rs 200 billion to Rs 300 billion.

    Tax Credits equal to 10 percent of the amount of expense related to these projects including labour related costs will be allowed to the developer for the first two years

    Exporter’s package

    Additional credit of Rs 200 billion for exporters under the Export Finance Scheme (EFS) in FY2020

    The interest rate differential (between Kibor and EFS markup) will be paid by additional Rs 10 billion subsidy by the government in FY2020

    This will boost export sector and reduce their cost of doing business

    SBP will give additional Rs 100 billion worth of lending to the exporters, to be subsidized by government through SBP profits.

  • Text of National Accountability (Amendment) Ordinance, 2019

    Text of National Accountability (Amendment) Ordinance, 2019

    ISLAMABAD: A presidential ordinance has been promulgated to restrict National Accountability Bureau (NAB) to take action against matters of tax evasion and an act of government officials done in good faith.

    Following is the text of the amended ordinance

    ===================================================================

    BILL

         further to amend the National Accountability Ordinance, 1999

         WHEREAS it is expedient further to amend the National Accountability Ordinance, 1999 (No. XVIII of 1999), for the purposes hereinafter appearing.

    It is hereby enacted as follows: –

    1. Short title and commencement – This Act may be called the National Accountability (Amendment) Ordinance, 2019.

    (2)  It shall come into force at once.

    1. Amendment of section 4, Ordinance XVIII 1999 – In the National Accountability Ordinance, 1999 (No.XVIII of 1999), the current section 4 shall be substituted with the following provisions namely: –

    “4.  Application

    (1) This Ordinance extends to the whole of Pakistan.

    (2)  Notwithstanding anything contained in this Ordinance, except for the persons, transactions and matters specified in sub-Section (3) of this Section, the provisions of this Ordinance shall apply to all persons, including those persons who are or have been in the service of Pakistan, wherever they may be.

    (3)  The persons, transactions and matters to which the provisions of this Ordinance shall not apply will be as follows: –

    • transactions and matters pertaining to Federal or Provincial taxation, duties, levies or imposts, by whatever name called;

    Explanation

    • All pending inquiries and investigations which relate to matters pertaining to this clause (a) sub-Section (3) of Section 4 shall stand transferred to the respective authorities or departments which administer the relevant laws of taxation, levies or imposts in question by whatever name called;
    • All pending trials which relate to matters pertaining to this clause (a) sub-Section (3) of Section 4 shall stand transferred from the relevant Accountability Courts to the criminal Courts which deal with offences, if any, under the respective laws pertaining to taxations, levies or imposts in question by whatever name called;

    (b)  any private person or matter or transaction in relation to such private person, unless such private persons is alleged to: –

    • have given or offered to give or attempted to give any gratification, other than legal remuneration, or valuable thing or pecuniary advantage to a public officer holder in terms of clauses (i), (ii) and (iv) of Section 9(a) and there is corroborative evidence that the public office holder has materially benefitted by gaining any monetary benefit or asset disproportionate to his known sources of income or which cannot be reasonably accounted, from such private person; or
    • is directly or indirectly connected with the holder of public office as his dependent or benamidar;

    Explanation

    • However, this clause (b) of sub-Section (3) of Section 4 shall not apply in case of an offence falling under clauses (ix), (x) and (xi) of Section 9(a) and clause (xii) of Section 9(a) to the extent that it applies to clauses (ix), (x) and (xi) of Section 9(a).

    (c)  unless a holder of public office has materially benefitted by gaining any monetary benefit or asset disproportionate to his known sources of income or which cannot be reasonably accounted for by the holder of public and there is evidence to corroborate such material benefit, NAB shall not take cognizance of any offence under this Ordinance involving a procedural lapse including any offence specified in clause (vi) of Section 9(a);

    (d)  unless a holder of public office has materially benefitted by gaining any monetary benefit or asset disproportionate to his known sources of income or which cannot be reasonably accounted for, and there is evidence to corroborate such material benefit, NAB shall not take cognizance of any offence involving the rendition of an incorrect act, decision, advice, opinion or report;

    (e)  the valuation of immovable properties, for the purposes of assessing as to whether a holder of public office has assets disproportionate to his known sources of income, shall be reckoned either according to the actual price shown on the relevant title documents or the applicable rate prescribed by the District Collector or the Federal Board of Revenue, which is higher. No evidence contrary to the later shall be admissible.

    1. Amendment of Section 5, Ordinance XVIII 1999 – In the current Section 5 “Definitions” of the National Accountability Ordinance, 1999 (No.XVIII of 1999), after the definition of “PERSON” in clause (o) the following heading will be added namely: –

    “PRIVATE PERSON” shall mean any person other than the holder of public office.”

    1. In the National Accountability Ordinance, 1999 (No. XVIII of 1999), after clause (vi) of sub-section (a) of Section 9, Ordinance XVIII of 1999 the following proviso shall be added, namely: –

    “Provided that an act done in good faith and in discharge of duties and performance of official function shall not, unless there is corroborative evidence of accumulation by the public office holder of any monetary benefit or asset which is disproportionate to the known sources of income or which cannot be reasonably accounted for, constitute an offence under this clause.”

    1. In the National Accountability Ordinance, 1999 (No. XVIII of 1999), after clause (vii) of sub-section (a) of Section 9, Ordinance XVIII of 1999 the following proviso shall be added, namely: –

    “Provided that an act done in good faith and in discharge of duties and performance of official function shall not, unless there is corroborative evidence of accumulation by the public office holder of any monetary benefit or asset which is disproportionate to the known sources of income or which cannot be reasonably accounted for, constitute an offence under this clause.”

    PRESIDENT OF PAKISTAN

  • Law amended to stop NAB taking action against businessmen: Prime Minister

    Law amended to stop NAB taking action against businessmen: Prime Minister

    KARACHI: Prime Minister Imran Khan on Friday said that the government has amended law to restrict National Accountability Bureau (NAB) from taking action against business community.

    Addressing at a ceremony of Pakistan Stock Exchange (PSX), the prime minister said the powers of NAB had been restricted to the corruption cases of public office holders.

    He said that the business community should be free from coercive action of NAB. The other institutions like FBR and courts are there to deal with cases of business community.

    He said that business community has key role in creation of wealth. He further said that no nation can grow without wealth.

    The prime minister said that the wealth creation was only possible when business community was facilitated.

    He said that in the past there was misconception about making of profit. The prime minister said that there was difference between profiteer and profit making.

    The prime minister said that the government desired the businesses should make profit and attract more investment.

    He said that the government was making all out efforts to improve ease of doing business. He said that in the outgoing year the ease of doing business was improved by 27 points despite challenging economic situation.

  • Pakistan’s weekly foreign exchange reserves slip by $60 million

    Pakistan’s weekly foreign exchange reserves slip by $60 million

    KARACHI: The liquid foreign exchange reserves of the country slipped by $60 million to $17.595 billion by week ended December 20, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $17.655 billion by week ended December 13, 2019.

    The foreign exchange reserves held by the SBP increased by $15 million to $10.907 billion by week ended December 20, 2019 as compared with $10.892 billion a week ago.

    The SBP said that on December 23, 2019, it received $452.4 million from International Monetary Fund (IMF) as second tranche under EFF program.

    These funds will be part of SBP weekly reserves data as of December 27, 2019, to be released on January 02, 2020.

    The foreign exchange reserves held by commercial banks fell by $75 million to $6.688 billion as against $6.763 billion a week ago.