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Category: Trade & Industry

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  • 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 This condition should be withdrawn; as the same has been already extended to companies operating in various sectors.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has proposed that at the stage of deregistering from the sales tax system, the condition of prior audit should be withdrawn to facilitate exit after three years; provided a company, individual or association of persons (AOP) was filling a null return for the past five years due to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.

  • Move to legalize cryptocurrency trading in Pakistan

    Move to legalize cryptocurrency trading in Pakistan

    KARACHI: Pakistan apex trade body has moved a proposals to authorities to legalize cryptocurrencies in the country.

    In this regard, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has recommended changes in tax laws to bring cryptocurrencies under tax net

    The FPCCI recommended capital gain tax (CGT) at 15 per on income derived from disposal of cryptocurrencies.

    READ MORE: FPCCI suggests amnesty for cryptocurrency declaration

    It further suggested that Pakistan must develop a regulatory framework and national cryptcurrency strategy.

    “Cryptocurrencies should be defined among securities under Section 37A of Income Tax Ordinance, 2001 under which assets are charged at the rate of 15 per cent.” The Section 37A of the Ordinance deals with the collection of capital gain tax on disposal of securities.

    The apex trade body also recommended imposition of withholding tax at the rate of one per cent, which should be adjustable, on transactions of cryptocurrencies.

    READ MORE: FPCCI protests over advisory council formation

    The FPCCI suggested a one-time asset declaration scheme must be launched. The scheme should include encashment of cryptocurrencies in Pakistan and converting the foreign exchange into the Pak Rupee may be allowed with no tax.

    Further, it may be made mandatory the encashment of cryptocurrencies in Pakistan and held as deposit in foreign exchange accounts in Pakistan should be allowed with a rate of tax at five per cent.

    The FPCCI further suggested related to the scheme that the encashment of cryptocurrencies in Pakistan and held as deposits in Roshan Digital Accounts should be allowed with 10 per cent tax for non-resident Pakistani nationals / dual nationals. “Holding of cryptocurrencies as an asset may be allowed to be declared on payment of 15 per cent tax,” it recommended.

    READ MORE: FPCCI demands reducing income tax slabs to five

    Giving the proposal to bring virtual currency under the tax net, the FPCCI said investment in cryptocurrencies started with speculative gaming but in recent years it had grown into humongous size. These assets which reside in digital clouds, need to be landed safely into the economic mainstream.

    “The total trading value of Pakistani investors touched $20 billion in 2020-21 and the country ranked third in the Global Crypto Adoption Index,” the FPCCI said.

    The apex trade body pointed out that recently the finance minister of India in her budget speech 2022 proposed to tax crypto-assets by 30 per cent on profits that occurred through transactions and 1 per cent TDS on every transaction of cryptocurrencies.

    READ MORE: Cryptocurrency, best performing assets in Pakistan

    Giving rationale to the proposal, the FPCCI said that virtual assets in countries like India, Thailand, Malaysia, UAE and many other countries are covered under tax laws which allow them to generate an additional revenue stream. “Coverage of these assets under the income tax regime in Pakistan will also help mobilize additional tax revenues,” it added.

  • KCCI appeals rescuing small traders in Catch-22 situation

    KCCI appeals rescuing small traders in Catch-22 situation

    Karachi Chamber of Commerce and Industry (KCCI) on Saturday declared Catch-22 situation and urged the government to rescue small traders from its fallout.

    Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees, while referring to upsurge in petroleum prices by Rs60 within a week along with exorbitant hike of Rs7.91 in electricity base tariff and 44 percent increase in SSGC’s gas tariff by OGRA, stated that a catch-22 situation has been created not only for the industries but also for all segments of society particularly the poor masses and small traders/ shopkeepers who simply cannot bear the burnt and were extremely worried over across-the-board inflation triggered by the rising petroleum prices, gas and electricity tariffs.

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

    In a joint statement, Chairman BMG and President KCCI said that it was really unfortunate that the issues being confronted by small traders, who are an integral part of the economy, were not in government’s priority list and it appears that they have been left alone during the ongoing difficult times.

    Zubair Motiwala appealed the government to come forward to rescue the small traders and shopkeepers by devising some kind of an effective mechanism to protect their interest and announce a special relief package for small traders/ shopkeepers which could reduce their cost and ensures that they survive in this era of inflation.

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

    He said that the inflation has badly gripped the entire society as prices of almost all the household items have skyrocketed making them unaffordable for majority of the public while those people, who were somehow able to afford, have also become very cautious that has brought down the shopkeepers’ sales to somewhere around 20 to 30 percent.

    “In this scenario, how a small trader or a shopkeeper will be able to survive and overcome some inevitable expenditures including gas and electricity bills, shop rent and wages to his workers etc.,” he asked.

    “It is undoubtedly a dire situation not only for the poor segment of society but also for the lower middle class and even the middle-class families who have been silently going through hunger and starvation as they, being white-collar and educated individual, cannot complain or beg for help from anyone,” Chairman BMG said, “Inflation genie has to contained at any cost otherwise, it will kill the common man.”

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

    He further stated that in addition to severe devaluation of rupee against dollar, rising electricity tariff and petroleum prices, it was also a matter of grave concerns that OGRA okayed a whopping increase of 44 percent in gas tariff for SSGC which would prove to be the last straw on camel’s back as it would result in closure of thousands of industrial units, trigger massive unemployment and give a boost to smuggling through misuse of Afghan Transit Trade and other illegal channels. “In this scenario, the economy will stay in hot waters, crises would worsen further and the situation may lead to setting off serious anarchy all over the country”, he cautioned.

    He said that when the exports have picked up pace and recorded an increase of 26 percent while the manufacturing sector has also witnessed an upsurge of 39 percent, the anti-business moves including raising the interest rates, increasing petroleum prices, electricity tariff and now appreciating the gas tariff have been taken which would withhold the progress of Pakistan and shut down many industrial units who would surely face bankruptcy. 

    READ MORE: Yarn merchants for reducing utility prices to save industry

    Muhammad Idrees said the production activities of the manufacturing sector supplying goods at the local markets have also gone down due to rising cost of doing business and the subsequent increase in the cost of finished goods. “Why would a manufacturing unit keep on producing goods at same pace and capacity when the local markets have become almost stagnant”, he said, adding that it was a very alarming situation which would raise the unemployment all over the country as many people would lose jobs due to limited production activities and closure of hundreds of industrial units which cannot bear the all-time high cost of doing business.

    As after increasing the petroleum prices and electricity tariff, the IMF’s demands have mostly been fulfilled hence, President KCCI urged the government to take notice of the situation and take steps for providing relief to the industries, shopkeepers and the poor masses otherwise things are going to get really difficult.

  • Energy price hike jolts trade, industry: Businessmen Panel

    Energy price hike jolts trade, industry: Businessmen Panel

    KARACHI: The massive hike in prices of petroleum products and electricity tariff has jolted the trade and industry as high cost would hamper economic activities.

    In a statement on Saturday Mian Anjum Nisar, Chairman of the Businessmen Panel, said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector.

    As the oil prices have been increased by another Rs30/liter and power tariff has gone up by Rs7.9/unit the Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce & Industry has stated that the government has dropped a fuel bomb on the businessmen after it suffered an electric shock to meet the conditions of IMF for the revival of the stalled loan program- a recipe to shake the trade and industry.

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

    The Businessmen Panel (BMP) chairman and FPCCI former president said that the decision would prove detrimental to the industries due to high cost of doing business and will also open the floodgates of inflation. In addition to making the electricity bills costlier and unaffordable for the consumers, the hike in base tariff would escalate prices of all household goods being widely used in every household, he added.

    The FPCCI former president termed the increase in base tariff unlawful and a violation of NEPRA’s own rules and regulations, as any increase in tariff has to be determined and implemented only after holding public hearings but unfortunately they have solely decided to raise the tariff without holding public hearings, he argued.

    It is to be noted the government has decided to raise the prices of all petroleum products, just a week after making a similar increase – hours after the National Electric Power Regulatory Authority approved a massive increase of Rs7.91 per unit in the power tariff. Now petrol is available at Rs209.86 per litre, high-speed diesel (HSD) at Rs204.15, kerosene oil at Rs181.94 and light diesel oil at Rs178.31.

    With the new hike in the power tariff, the price of a unit is expected to move upwards from Rs16.91 to Rs24.82.

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

    Despite an inevitable increase in the prices that will unleash a strong wave of inflation, the coalition government remains short of clinching a deal with the International Monetary Fund that still requires an agreement on the budget for fiscal year 2022-23.

    On the other hand the NEPRA has increased the electricity rates mainly on account of fuel prices, capacity cost payments and the impact of rupee devaluation against the US dollar.

    The base tariff has gone up to Rs24.82/kWh — higher by Rs.7.9078/kWh than the earlier determined national average tariff of Rs16.91/kWh — determined by the power regulator for the ongoing financial year.

    This is the highest average tariff rate for power consumers.

    He condemned the National Electric Power Regulatory Authority’s decision to increase electricity tariffs, stating that the burden of power theft, mismanagement, and inefficiencies cannot be shifted to consumers on the pretext of fuel adjustment.

    Anjum Nisar stated that the constant increase in power tariffs on the pretext of fuel adjustment had increased electricity prices and added to the already high cost of trade and industry. Seeking comparable energy tariffs for domestic industries in order to capture the global market, he stated that due to high electricity rates, power theft became rampant as the tariff was unaffordable to consumers.

    He urged the power ministry to identify system constraints and communicate targets to all concerned departments in order to launch a wartime effort to upgrade the transmission system.

    READ MORE: Yarn merchants for reducing utility prices to save industry

    He urged the completion of all ongoing power projects well ahead of schedule. He stated that business-friendly policies must be adopted, similar to those adopted by other neighboring countries in the region.

    He suggested that the amount specified in trade policy be used to promote exports by providing incentives to trade and industry and by exploring new markets. According to the BMP Chairman, Pakistan’s electricity prices were already on the high side, which was the primary reason for the country’s price hikes. He stated that providing affordable electricity would assist in lowering production costs, thereby benefiting the public. He stated that rising imports and a widening trade deficit posed a serious threat to economic growth and must be addressed urgently.

    READ MORE: KATI demands withdrawal of electricity, petrol price hike

    Mian Anjum Nisar said that the recent increase in fuel and electricity rates will add to the miseries of the businessmen, who are already feeling the heat of runaway inflation. He said that increase in fuel prices and tariff rates would also bring about another flood of inflation in Pakistan as it would increase the cost of doing business in the country.

  • Govt. halts gas supply to export industry: APTMA

    Govt. halts gas supply to export industry: APTMA

    KARACHI: All Pakistan Textile Mills Association (APTMA) on Friday resented the decision of the government to halt gas / LNG supply to the key export industry.

    The APTMA in a statement said textiles is the only sector that continues to grow and bring foreign exchange to the country, gearing up to close at $20 billion in June 2022 compared to $15.4 billion in June 2021. The sector has charted a remarkable performance in the past year.

    READ MORE: APTMA demands continuation of energy tariffs

    However, despite this progress, the gas/RLNG supply to the Punjab textile sector, which was at only 25 per cent of required volumes (50 per cent of August to November actual consumption), was shut down two days prior with the guarantee that supply would be restored on the morning of Friday 3rd June 2022. However, it has now been stated that the gas/RLNG supply will not be restored for an indefinite period.

    The tragedy is that even with a 59 per cent increase of textile exports in May 2022 ($1.69 billion) over May 2021 ($1.06 billion), exports are not being given their due importance. Gas/RLNG is being continuously supplied to non-export industries – ceramics, glassware, steel etc. and not the export sector, against all economic rationale.

    READ MORE: Prolong Eid holidays to adversely affect exports: APTMA

    The government’s decision to halt the supply of gas/RLNG to exporters is highly illogical as it is a critical input to textiles, the single largest contributor to Pakistan’s exports and the mainstay of Pakistan’s economic future. The sector has sizeable investments in state-of-the-art machinery and high efficiency generation, with over USD $5 billion worth of investments for expansion and modernization made in the last 1 ½ years.

    The potential losses thus accruing to the shutdown of gas/RLNG supply are phenomenal. On the contrary, the industry can bring substantial economic benefit from enhanced exports if the stable and consistent supply of gas/RLNG is guaranteed. New plants and expansions completed since November 2021 are still awaiting gas/power supply.

    READ MORE: APTMA condemns lobbying for Indian yarn import

    APTMA strongly urges the government to restore the priority of export industry and to recognize the immense losses and damage to Pakistan’s economic future this will cause.

    A loss in production will lead to a further loss of exports and the need for billions of dollars in additional loans, which are already hard to come by. Due to poor quality grid electricity and non-supply of gas/RLNG, mills are operating at less than 75 per cent capacity, which if continued will incur a loss of $250-400 million in exports each month.

    This has occurred previously and the losses were not and can never be recovered. Furthermore, most mills at present cannot fulfill the energy needs for power or gas/RLNG alone and require both to function. It is important to stress upon the fact that captives’ gas/RLNG usage is not consumptive but economic, that is, it leads to sustained production, with benefits of employment generation and enhanced exports.

    READ MORE: APTMA disapproves Indian cotton import

    The textile sector requires unwavering support to maintain export-led economic growth, so the sustained provision of energy will have long-term benefits for the country at large. Pakistan cannot afford to have an inefficient export-oriented sector, and the gas/RLNG supply and priority must be restored with immediate effect so that exports and economic growth are able to continue on an upward trajectory.

  • SITE industrialists reject increase in power tariff, POL prices

    SITE industrialists reject increase in power tariff, POL prices

    KARACHI: SITE Association of Industry (SAI) on Friday strongly rejected the increase in power tariff and prices of petroleum products announced by the government a day earlier.

    Abdul Rashid, President, Site Association of Industry, Karachi, while expressing deep concern over the recent increase in base tariff of electricity by Rs7.90 per unit, announced by NEPRA, and sharp increase in petroleum prices, saying that these steps should be taken back immediately in the best interest. Otherwise, the dream of development of the country’s economy will never come true.

    READ MORE: Yarn merchants for reducing utility prices to save industry

    SAI President said that the business community would not accept the self-imposed decision of NEPRA as raising base electricity tariff without public hearing is a total violation of laws.

    He termed the sharp rise in petroleum prices after the hike in electricity tariffs as dangerous for the economy, and said that it would not only lead to a storm of inflation but also cause huge losses to the industries as the production cost of the industries is already high. It has grown to an unbearable level, so the government should refrain from taking such measures as putting the survival of the industry at stake.

    READ MORE: KATI demands withdrawal of electricity, petrol price hike

    “The government needs to take steps to promote exports of Pakistani products so that the economy and business can flourish and that is possible only when the cost of doing business is reduced by significantly reducing the prices of electricity, gas, petroleum products and water,” he opined.

    SAI chief added that raising electricity tariffs was not wise but these crises could be overcome only by focusing on increasing energy production and alternative energy projects.

    READ MORE: Pakistan braces for worst food inflation: FPCCI

    Abdul Rashid demanded Prime Minister Shehbaz Sharif to issue notification to abolish 17% sales tax on solar energy as per his promise, also explain the HS code for importing raw materials, and the 30% duty on the import of machinery should be abolished immediately so that the production activities can be promoted without any hindrance.

    READ MORE: APTMA demands continuation of energy tariffs