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Category: Trade & Industry

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  • Karachi Chamber demands declaring rain emergency

    Karachi Chamber demands declaring rain emergency

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the government of declaring an emergency after human and financial losses in the city during torrential rains in past few days.

    READ MORE: KCCI demands release of stuck up containers

    KCCI President Muhammad Idrees in statement urged Prime Minister Shehbaz Sharif to take immediate measures to prevent further human and financial losses in the city as more rains had been predicted.

    Idrees lamented the present situation in Karachi after heavy downpour especially during the past 24 hours. He said the provincial and local authorities had failed to relief and take measures to control the flooding like situation.

    READ MORE: KCCI demands implementation of Riba free banking

    “The city collects about 70 per cent revenue for the national exchequer. But the present situation has created insecurity amongst the people of the metropolis,” he said.

    “The Wall Street of Pakistan i.e. I. I. Chundrigar Road is completely vanished due to flooding. Besides, the old city area were also showing disaster everywhere,” he added.

    The KCCI President urged the Prime Minister to announce compensation to the losses and also grant duty and tax relief for the business community.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    He pointed out that there was no allocation in the budget 2022/2023 for the financial hub. He further pointed out that the previous government had allocated around Rs1.1 trillion for the city but no development project was seen.

    Idrees demanded the federal government to take control of the city and provide maximum relief to avoid further losses in expected rains.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

  • KCCI demands release of stuck up containers

    KCCI demands release of stuck up containers

    Karachi Chamber of Commerce and Industry (KCCI) on Monday demanded the government of releasing containers imported goods that were banned through SRO 598(I)/2022.

    The chamber in a statement strongly denounced the non-clearance of containers at the ports subsequent to the ban imposed on luxury items.

    READ MORE: KCCI demands implementation of Riba free banking

    The ban was imposed on 85 categories of luxury items vide SRO 598 (i)/2022 which was issued on May 19, 2022.

    Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees appealed to Prime Minister of Pakistan Mian Shahbaz Sharif and Minister of Finance Miftah Ismail to issue orders to immediately release the stuck up containers at the port and waive the demurrage charges to compensate for the losses of the importers.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    President KCCI Muhammad Idrees claimed that around 800-900 containers which were already booked before the issuance of SRO 598, got stuck at the ports as customs authorities were not clearing them.

    Importers are facing additional hit of hefty demurrages which is causing severe distress among them.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

    It has also caused shortage of several items in the market which needs to be addressed urgently.

    Chairman BMG Zubair Motiwala and President KCCI Muhammad Idrees urged immediate resolution of this serious issue.

    READ MORE: Govt. halts gas supply to export industry: APTMA

  • KCCI demands implementation of Riba free banking

    KCCI demands implementation of Riba free banking

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Friday demanded the government for early implementation of Riba free banking in Pakistan.

    Chairman Businessmen Group in the KCCI, Zubair Motiwala, and KCCI President, Muhammad Idrees have extended gratitude to Prime Minister Shahbaz Sharif for taking interest in the implementation of the Federal Shariah Court’s decision of introducing Riba Free banking in Pakistan.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    They have requested the government to introduce interest free banking in Pakistan according to the Islamic Principles and implement the court’s decision in true letter and spirit. 

    The Federal Shariah Court gave a verdict on 28 April 2022 after a lapse of 19 years. In the judgment, it declared that Riba was prohibited according to the injunctions of Islam so it should be eliminated from the country with in a period of five years.

    This statement was issued in response to an appeal filed by the State Bank of Pakistan, and four other banks in the Supreme Court of Pakistan against the Shariah Court’s Judgment. They termed the appeal as move to delay the conversion of conventional banking system to Riba free mode to banking. They also appreciated the assurance given by the PM Shahbaz Sharif to influence the banks to withdraw their appeals from the Supreme Court so that the Shariah Court’s decision could be implemented.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

    Chairman BMG Zubair Motiwala said, “Other Islamic countries like Saudi Arabia, Iran and Malaysia have made significant headway in implementing Islamic mode of financing in their respective countries. Like, Malaysia has an Islamic Financial Services Board which has set Standards, Guiding Principles and Technical Notes for the Islamic financial services industry. I believe that if these countries are able to successfully adopt Islamic financial system, Pakistan can also shift to Islamic Financing system in the decent span of five years”.

    READ MORE: Govt. halts gas supply to export industry: APTMA

    President KCCI Muhammad Idrees urged that all stakeholder groups should be consulted and if there are any genuine issues then these should be resolved on a fast-track basis to pave way for timely implementation of Islamic Financial System in the country.

    READ MORE: SITE industrialists reject increase in power tariff, POL prices

  • Committee recommends lifting import ban on luxury items

    Committee recommends lifting import ban on luxury items

    A high-level committee of Pakistan’s leading businessmen, tasked with reviewing budget anomalies, has formally recommended lifting the ban on the import of luxury items.

    (more…)
  • FPCCI denounces super tax imposition

    FPCCI denounces super tax imposition

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has denounced the imposition of super tax by the government to generate additional revenue.

    FPCCI acting president Shabbir Mansha denounced imposition of 10 percent super tax on large industries; which already pay hefty corporate tax of 29 percent and generate millions of jobs in the country as well.

    READ MORE: Pakistan stocks crash on super tax imposition

    “No country in the world can charge 39 percent tax to corporations and still keep the economy afloat, he added. Additionally, new private-sector and foreign investments dry up completely in an uncompetitive market.”

    Shabbir Mansha explained that industries affected will include all major industries; namely, cement, steel, sugar, oil and gas, fertilizers, LNG terminals, textiles, banking, automobiles, cigarettes, beverages, chemicals and airlines – and, these are 13 industries in total. Furthermore, all the remaining industries will be subjected to 4 percent additional tax.

    READ MORE: Pakistan slaps super tax on industries, individuals

    Acting FPCCI Chief also expressed his shock that the federal budget 2022 – 23 was announced just two weeks back and it mentioned no super tax on industries. It is a highly abrupt, unfortunate and anti-industry measure.

    Mansha reiterated FPCCI’s stance that the government should not squeeze the existing taxpayers further and look for the avenues to broaden the tax net; as that is the only practical and sustainable way to generate more taxes without hurting the industries, exports, employment and the economic growth.

    He noted with profound concern that Pakistan Stock Exchange (PSX) was unnerved on the decision and the trading had to be suspended on Friday after KSE-100 index lost 2,055 points or 4.81 percent in a quick span of merely 20 minutes.

    Mansha emphasized that the cost of doing business is already at an all-time-high in the country and the interest rate of 13.75 percent will not let the economy grow at any meaningful rate; and, prices of electricity and gas have already made us uncompetitive as far as the exports are concerned.

    Additionally, there are rumors that interest rate may be further raised. He added that the government should also consult with the stakeholders in business, industry and trade on how and when interest rate can be brought down; so that, businesses can plan their year ahead accordingly.

    READ MORE: Key tax measures taken through Finance Bill 2022

    Mansha emphasized that imposition of PDL – though in a phased manner – will totally destroy the cost of doing business competitiveness and will fuel the inflation like never before through its multiplier effect. He demanded that the government should take business community on board on its commitment with IMF on PDL.

    Acting FPCCI Chief has also stressed upon the need to start a consultative process with the stakeholders on the implementation status of hike in electricity base tariff; impending PDL imposition and new or additional taxes as these costs will cumulatively destroy the business sentiment and industry will come to a halt.

    READ MORE: FPCCI identifies tax anomalies in budget 2022-2023

  • FPCCI identifies tax anomalies in budget 2022-2023

    FPCCI identifies tax anomalies in budget 2022-2023

    KARACHI: Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has identified anomalies in the federal budget 2022-2023.

    In a statement issued on Wednesday, Shabbir Mansha, Acting President FPCCI, expressed his profound concerns on the glaring anomalies in the federal budget 2022 – 2023.

    “We have noticed anomalies in custom duties, regularity duties, income tax and sales tax,” he added.

    READ MORE: Pakistan announces massive tax reduction for salaried persons

    Mansha noted that turnover tax of 1.25 percent for traders, distributors and dealers is unbearable as profit margins are barely 2 percent in market sales and the turnover tax will continue to discourage SMEs to be registered in sales tax.

    Acting FPCCI Chief pointed out that 4.5 percent withholding tax on local sale; but, normally trade margins are between 2 – 3 percent and there is no way a business can absorb 4.5 percent withholding tax and continue to operate viably. Therefore, sellers find it more viable to buy goods at 20 percent taxes; when accounted for additional duty of 3 percent on commercial importers on top of 17 percent sales tax and delist from the sales tax.

    READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23

    He demanded that disparities in the rates of sales tax on raw materials at import stage between commercial and industrial importers. The FPCCI chief maintained that under section 8 (b) of sales tax act 1990, input tax adjustment in excess of 90 percent of the output tax is not allowed. This condition should be withdrawn; as the same has been already extended to companies operating in various sectors. Furthermore, withholding tax on import of raw materials should be the same for industrial and commercial importers.

    READ MORE: Massive cut in subsidies to curtail current expenditures

    Mansha has proposed that at the stage of deregistering from the sales tax system, the condition of prior audit should be withdrawn to facilitate exit after three years; provided a company, individual or association of persons (AOP) was filling a null return for the past five years due to discontinuation of their businesses.

    On the withdrawal of NIC condition through amending the section 23(I)(b), FPCCI has appreciated the government; but, maintained that the Finance Bill 2022 should categorically state that no NIC would be required for sales to non-filers.

    Mansha also raised the issue of 12 percent tax under section 233(1). Additionally, freight and transportation charges under section 153(1)(b) at 3 percent should only be applied on final tax region.

    READ MORE: Petroleum levy to generate Rs750 billion

  • Paper merchants slam price hike by local producers

    Paper merchants slam price hike by local producers

    KARACHI: Paper merchants and graphic printers are facing with a severe shortage of paper, while the local producers have increased the prices by over 200 percent pushing the printing and packaging industry towards collapse.

    Speaking at a press conference at Karachi Press Club, Chairman Pakistan Association of Printing Graphic Art Industry on Tuesday, Aziz Khalid said there was a severe shortage of paper in the country, and local paper mills were fixing the rates at their will.

    “Local mills produce low quality paper and are unable to meet the demand.”

    He said due to the scarcity of paper, printers couldn’t print the school syllabus so far, which was impacting the students of Sindh and Punjab Text Book Boards.

    Criticizing the policies of the government as negative, Khalid claimed over 18,000 units involved in the printing and packaging supply chain were suffering due to higher taxes on imported paper.

    “We have approached the Ministry of Finance, Commerce Division and Federal Board of Revenue FBR apprising them of the problems of the paper and printing industry, but there is no redressal”.

    Speaking on the occasion, former Chairman All Pakistan Paper Merchants Association, Muhammad Saleem Bikyia said the government allows them to import paper, and the government revenue would be doubled.

    “The former government imposed multiple taxes on educational paper imports, while the locally produced paper is very low quality as well as unable to meet demand.”

    It may be mentioned here that the printing and packaging is the second largest value-added industry after textiles.

    High prices & inferior quality are the major factors to confine us to enter US$:1000 billion export markets of books/leaflets/ packaging materials etc., which are mainly consumes by Singapore, Malaysia, China, India and UAE, said Bikyia.

    Federal Minister of Finance & Revenue unfairly imposed 10 per cent Regulatory Duty (RD) in uncoated woodfree paper (HS Code 4802) in year budget 2021-22 despite of facts that 11 per cent to 39 per cent Anti-Dumping Duty already exists in said item. This is double jeopardy tax. Lawfully, Regulatory Duty (RD) cannot be enforced when Anti-Dumping duty already exists.

    Saleem Bikyia said that there is No duty on basis Raw Materials i.e. pulp (H.S Code 47), and tiny 5 per cent duty on finished goods i.e. printed books, literary materials (HS Code 49); however in semi-finished Raw Material (H.S Code 48) i.e. paper & paperboard there is 16 per cent customs duty taxes, 4 per cent Additional Customs Duty, 10 per cent RD, & 11 per cent to 39 per cent Anti-Dumping Duty.

    The stakeholders urged Federal Board of Revenue (FBR) to initiate investigation to substantiate how much 90 per cent domestic paper producers produce and pay sales taxes to national exchequer compare with 10 per cent imported paper who pay advance 17 per cent sales tax and 3 per cent value added tax at custom stage, results of billions of rupees of corruption, pilferage, swindle and embezzlement of local paper.

  • Yarn merchants demand removing budget anomalies

    Yarn merchants demand removing budget anomalies

    KARACHI: Pakistan Yarn Merchants Association (PYMA) has urged the finance minister to remove anomalies in the budget 2022/2023.

    In a statement on Friday, Saqib Naseem, Chairman PYMA, Muhammad Junaid Teli, Vice Chairman, Sind & Balochistan region, has drawn attention of Minister for Finance and Revenue, Miftah Ismail over anomalies in Federal Budget 2022-23.

    READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers

    PYMA office bearers elaborated that Polyester filament yarn (H.S. CODE 5402.3300, 5402.4600, 5402.4700 and 5402.5200), also known as Man-Made Yarn, is the basic raw material for Pakistan’s textile industry.

    The share of cotton in global fiber consumption has fallen from nearly 70 per cent back in 1960, to only 27 percent by end 2020. Its place has now been captured by synthetic or man-made yarns.

    “A very large SME sector of Pakistan’s textile industry (more than 500,000 looms and knitting machines) consumes Polyester filament yarn. The commercial importers of Polyester Filament yarn act as financiers to this SME sector and entertain the requirements of this SME sector using their own capital and resources,” they said.

    READ MORE: Pakistan massively increases taxation on motor vehicles

    Saqib Naseem, Junaid Teli added that we have seen in the past that whenever the difference in W.H.T is more than 1 per cent on Commercial Imports v/s Industrial Import, majority imports of Polyester Filament yarn shift towards industrial imports which leads to corruption and misuse of this facility and to the exchequer.

    They further said that Polyester Filament yarn falls under the category of Raw Materials (SRO 1125) and in the previous budget FY 2021-22, the G.O.P imposed W.H.T at import stage 1 per cent for industrial importers and 2 per cent on commercial. However, in the Federal Budget 2022-23, the G.O.P has kept W.H.T @1 per cent for industrial imports falling under SRO 1125 whereas commercial importers shall be charged W.H.T @3.5 per cent with M.T.R and @ 4 per cent with F.T.R. Polyester filament yarn tariff already exists in the cascading system of polyester value chain & it is already on the higher side.

    READ MORE: New rates of capital gain tax on disposal of securities

    Saqib Naseem, Junaid Teli requested Minister for Finance & Revenue, Miftah Ismail to kindly continue with 2 per cent W.H.T with FTR on Commercial Imports on items falling under SRO1125. Furthermore, in view of information from Reliable sources, it has been learned that the government may impose ACD & RD on Polyester Filament Yarn (H.S Code: 5402.3300, 5402.4600, 5402.4700 & 5402.5200).

    Since these are basic raw materials of the Textile Industry, therefore we are requesting you not to impose any ACD & RD on these H.S Codes. We would also request you to Rationalize Custom Duty Tariff of POY (5402.4600) & PFDY (5402.4700) @7 per cent instead of present 11 per cent.

    READ MORE: Pakistan slaps 45% corporate tax on banks

  • FPCCI shocked over petroleum price hike

    FPCCI shocked over petroleum price hike

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday expressed shock and dismay on massive increase in prices of petroleum products.

    FPCCI Acting President Shabbir Hassan Mansha in a statement expressed his shock and awe at the astronomical increase in the prices of petrol and diesel.

    READ MORE: Pakistan braces for worst food inflation: FPCCI

    Increase in petrol price by Rs. 24.03per liter will crush the masses and Rs. 59.16per liter in diesel price will have a multiplier effect on goods transportation costs; which will drive the commodities and food supplies prices even further, he added.

    Acting FPCCI Chief maintained that it is imperative to weigh in the impact of the prior petroleum prices as well; because even before the latest increase prices were also raised twice in a short time span of merely two weeks. Therefore, we are faced with a third major raise in the prices of petroleum products within 20 days – cumulatively raising the petrol price by Rs. 84 / liter, i.e. 56 percent and diesel price by Rs. 144 per liter, i.e. 83 percent.

    READ MORE: FPCCI demands fixed tax regime for retailers

    Shabbir Hassan Mansha has apprised that a massive goods transportation crisis is in the offing as there is no way the transporters can absorb 83 percent raise in the diesel price. He has called upon the government to act and act fast.

    Shabbir Hassan Mansha also pointed out that the grapevine is that the government is also mulling the proposal to re-impose petroleum development levy (PDL) and the business community is not sure where this unpredictable, aggressive and anti-business upward price spiral will stop.

    Shabbir Hassan Mansha emphasized that the real impact of the petroleum prices will reflect in consumer price indices in 4 – 8 weeks and the government should swiftly come up with a protective mechanism for the small & medium enterprises (SMEs); else the skyrocketing increase in cost of doing business will push the country towards historical bankruptcies in the SMEs and the resultant unprecedented unemployment.

    READ MORE: FPCCI demands CNIC condition withdrawal

    Acting FPCCI Chief also expressed his profound concerns over massive electricity tariff hike of Rs. 7.91 / kWh; resulting in Rs. 24.82 / kWh base tariff for the year 2022 – 23, while it was Rs. 16.91 / kWh for the outgoing year 2021 – 22. It was a rate hike of a staggering 47 percent by NEPRA; and, it will jolt the cost of doing business and ease of doing business indices.

    Additionally, rumors are rife that there will be even further raise in the electricity tariffs; and, the combined effects of petroleum, electricity and gas prices will make businesses unsustainable and unviable, he added.

    READ MORE: FBR urged to wave further tax on providing CNIC number

    Shabbir Hassan Mansha has extended FPCCI’s full support from the platform of the apex body to kick start a consultative process between the government and all the stake holders to work out some sort of operational contingencies under the prevailing cost of doing business crisis.

  • PM Shehbaz assures favorable measures on CNIC requirement

    PM Shehbaz assures favorable measures on CNIC requirement

    KARACHI: Prime Minister Shehbaz Sharif has assured business community of taking favorable measures related to CNIC requirement will be taken in the budget 2022-2023.

    A high-level delegation of the Karachi Chamber of Commerce and Industry (KCCI) led by Chairman Businessmen Group (BMG) Zubair Motiwala held meetings with Prime Minister Shehbaz Sharif and Federal Minister for Finance and Revenue Miftah Ismail in Islamabad to discuss the overall economic challenges, budgetary measures for fiscal year 2022-2023, taxation policies and the problems being suffered by the business and industrial community of the country.

    READ MORE: New tax measures likely in budget 2022-2023

    The delegation, which also comprised of Vice Chairman BMG Jawed Bilwani, President KCCI Muhammad Idrees, Former Senior Vice President Saqib Goodluck, Former Vice President Shahid Ismail, President Site Association of Industry Abdul Rasheed, President North Karachi Association of Trade and Industry Faisal Moiz Khan and President Site Superhighway Association of Trade and Industry Aamir Hassan Lari, highlighted the following major points:

    KCCI delegation requested the Prime Minister that 17.5 percent Sales Tax on Solar Panels must be withdrawn at the earliest as committed by the Prime Minister at a meeting held at CM House Sindh during his last visit to Karachi. The Prime Minister and Finance Minister assured that it will be withdrawn next week.

    READ MORE: Pakistan Budget 2022-2023 – estimates

    Matter of Indenting Commission also came under discussion with a humble request by KCCI delegation that indenting commission may please be declared as export proceeds.

    Moreover, it was further brought into the limelight that the local manufacturers have the capacity of producing Fiber Optic Cables therefore, the government must take measures to stop the imports of fiber optic cables so that the local manufacturers could be encouraged to enhance their production capacity which would certainly help in saving substantial foreign reserves being wasted on the imports of fiber optic cables.

    KCCI delegation also advised Prime Minister and Finance Minister to issues directives for withdrawal of Sales Tax imposed on LED bulbs and its parts so that energy conservation could be promoted all over the country which was badly needed as the countrymen were currently going through prolonged load shedding for many hours every day due to severe energy crises.

    READ MORE: Compliance cost much higher for corporatization: PSX

    KCCI delegation also expressed deep concerns over delays in release of Drawback of Local Taxes and Levies (DLTL) claims of the exporters which have remained stuck up since long. In response, the Prime Minister promised to disburse the same in the days to come.

    KCCI delegation also sought Prime Minister’s assistance in dealing with the unjust imposition of 17 percent Sales Tax imposed on cattle feed made from the agricultural waste. As it is purely agricultural waste used as animal feed for livestock farming and milking, hence sales tax imposed must be withdrawn in the Federal Budget 2022-23. Prime Minister and Finance Minister, while agreeing to KCCI’s viewpoint, assured that ST imposed on cattle feed will also be withdrawn.

    KCCI delegation also advocated that the commercial importers of polyester yarn may please be allowed to declare their payment of sales tax and other taxes under Final Tax Regime (FTR) which was also agreed with an assurance that the commercial importers will be treated under FTR.

    READ MORE: FBR suggested reduction in tax rates for equity funds

    IT related issues along with its potential and an ambitious export target of US$15 billion in three years for IT sector given by Prime Minister was also discussed in detail and it was assured that all the issues being faced by businessmen associated with IT sector will be resolved to promote this sector. In addition to resolving issues, the government would create such an environment wherein Pakistani IT companies abroad could be encouraged to comfortably open up their offices in Pakistan. Gas Tariff for the export sector was also discussed in detail.

    READ MORE: PSX proposes tax exemption on property transactions

    KCCI delegation, while thanking the Prime Minister Shehbaz Sharif and Finance Minister Miftah Ismail, for taking keen interest in resolving the issues being suffered by the business community, hoped that the Karachi Chamber’s recommendations which have been submitted in the larger interest of the country, will be taken into consideration and incorporated in the forthcoming budget so that the overall business climate could be improved that would certainly lead to promoting industrialization all over the country and generate employment opportunities.

    KCCI delegation also extended full support and cooperation to the Prime Minister and his teams for all his future endeavors being undertaken to pull the economy out of crises.