KARACHI: The All Pakistan Textile Mills Association (APTMA) has called on the government to sustain regionally competitive energy tariffs (RCETs) to ensure the continued growth of the textile sector, which remains vital to Pakistan’s economy.
(more…)Category: Trade & Industry
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Agha Steel, Saima Group launch green housing structure project
KARACHI: Agha Steel Industries Limited, a leading Steel manufacturing company has signed an agreement with Saima Group for exclusively providing Green Electric Arc Furnace Technology steel rebars to its first of a kind Eco-Friendly Green Housing Structure Project “Saima Premium Residency”.
Saima Group is a name associated with quality and trust in the real estate planning and development sector of Pakistan, having successfully delivered many mega projects for both residential and commercial to its customers.
Addressing the occasion Zeeshan Zaki, Chairman Saima Group said: “We are very excited to launch Saima Premium Residency as Pakistan’s first Eco-Friendly Green Housing Structure project that shall be built exclusively with the finest and most technologically advanced rebars supplied by Agha Steel. In accordance with our long term goal of transforming into an environmentally conscious organization, it is our aim to partner with firms that share our values to give sustainable developments for our future residents.”
He further added: “We couldn’t have found a better partner than Agha Steel for providing Steel for this visionary project as they are the only company in Pakistan that provides 100% refined quality steel by using green steel technologies.”
At the signing ceremony Hussain Agha, CEO Agha Steel, also expressed his view and noted: “We are delighted to be entering into this agreement with Saima Group for providing steel to Pakistan’s First Eco- Friendly Green Structure Project. This is a great initiative by Saima Group as the leaders of the industry must play a pivotal role to ensure a sustainable and greener future for our generations to come. This agreement is testament to our aligned visions and ambitions for a Greener Pakistan.”
Agha Steel Industries led a Green Steel Revolution through sustainability of its energy mix by installing a 2.25 Megawatt solar power project and signing a term Sheet with Engro Energy for Renewable Energy. Agha also stated, “Our State of the art plant utilizes scrap-based Electric Arc Furnace (EAF) technology. By using recycled scrap for our raw material, we reduce the need for natural resources. Our CO2 Scope 1 green-house gas emissions and energy consumption intensities are approximately 7 times less than the global steel making average, making the Green Arc Furnace Technology environmentally friendly.”
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FBR to install more scanners for customs clearance
KARACHI: The Federal Board of Revenue (FBR) will add more scanners for digitization of customs clearance, said Wajid Ali, Chief Collector, MCC Appraisement (South) Karachi.
Addressing at Federation of Pakistan Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday, he said that more container scanners will added on a regular basis and customs is moving towards best-practices in digitalization; however, accepted that more work needs to be done to facilitate the traders.
READ MORE: FBR promotes Customs officers to BS-19
Agreeing to the top demand of FPCCI, Wajid Ali promised that the online complaint mechanism will be launched at Federation House to address all the issues, concerns and complaints of the business community pertaining to customs.
It will not only promote the liaison between the customs department and the business community; but, will also expedite the complaints resolution process.
The Chief Collector informed the session that Input/Output Co-efficient Organization (IOCO) has determined the quotas for the erstwhile FATA and PATA region; hence, its misuse will be eliminated.
He also committed that refunds will be swiftly processed to facilitate the traders. He added that National Single Window (NSW) will contain HS Codes in 12 digits.
READ MORE: FBR drafts ID evidence rules to subscribe Pakistan Single Window
Wajid Ali has asked FPCCI to propose the inclusion of its representative into the classification committee and apprised that Alternative Dispute Resolution Committee (ADRC) will also be refreshed.
He also welcomed the recommendations of appointing a focal person for FPCCI for the greater good of business community; more proactive 90-day advanced rulings and effective implementation of protections covered under SRO 598 to already issued Bill of Lading and Letter of Credit.
Earlier, Irfan Iqbal Sheikh, President FPCCI, discussed the issues and anomalies endured by the business community with top customs officials in a detailed session at Federation House.
He enlisted that lack of regulation of container terminals; misuse of erstwhile FATA and PATA exemptions; delay in refunds processing; unfair demurrages charges; insufficient investment into digitalization & container scanners; inadequate diversification in HS and PCT Codes; overlooking cascading principle on raw materials and irregular consultative process with the trading community’s stakeholders are the top impediments in the smooth functioning of the customs operations.
READ MORE: Trade Information Portal of Pakistan
Sheikh demanded formation of a regulatory authority for container terminals for a better working environment between traders and container terminals.
He also expressed his profound concerns over misuse of erstwhile FATA and PATA exemptions as the phenomenon has disturbed the even-playing-field.
Sheikh also expressed his dismay over paying technology upgradation and container scanner charges since the year 2005; but, no wide-scale upgradation has taken place as yet. He also called upon customs authorities to adopt 16-digit HS Codes to cater to the diverse imports.
Engr. M. A. Jabbar, Vice President FPCCI, pointed out that tariff rationalization should be an ongoing process to adapt to the ever-changing trade & industry environment and proposed that member policy of FBR should keep consulting the stakeholders.
READ MORE: PSW to link 27 banks for trade facilitation
Shabbir Hassan Mansha, VP FPCCI, demanded a focal person for FPCCI and also apprised the session that the business community faces delays in refunds as the pay orders are encashed without informing the traders; and, critical working capital is blocked due to the practice.
Saqib Fayyaz Maggo, Convener Customs FPCCI, highlighted the lack of uniformity in the disposal of cases under Sections 81, 25A, 25D; on top of the excessive adjudication cases and ever-increasing demurrages charges.
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KATI expresses concerns over massive rupee fall
KARACHI: Korangi Association of Trade and Industry (KATI) on Wednesday expressed serious concerns over massive fall in rupee value and depleting foreign exchange reserves.
In a statement KATI President Salman Aslam said the dollar value had gone above Rs190, a decline that started before Eid has increased economic hardship.
READ MORE: KATI demands ban on unnecessary imports
The government is facing hardship at two fronts, first, the dollar value increase, and second reduced foreign exchange reserves are alarming.
Aslam said that the amount the official foreign exchange reserves of the State Bank of Pakistan (SBP) fell to $10 billion, which also included an amount of $3 billion of Saudi Arabia. He said that government cannot spend the deposited aid to Saudi Arabia, and payment of three months import bill seems difficult.
READ MORE: KATI terms sudden policy rate hike as economic disaster
KATI President further added that government has to manage any further bailout package from friendly countries on an emergency basis. “Even receiving IMF tranche of $1 billion is still insufficient to reduce the difficulties.”
At the moment the country needs a large bailout package, which immediately released the pressure on reserves and the Pak Rupee.
READ MORE: PKR becomes worst currency in region: KATI
Salman Aslam said that negotiations with the IMF must be finalized and efforts to get more cooperation from countries close friends of Pakistan.
He further said that all the resources of the government to avoid bankruptcy will be utilized, to support the economy.
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BMG chairman urges end to political war
KARACHI: The chairman of Businessmen Group (BMG), Zubair Motiwala, on Wednesday urged the political parties to end ongoing political war for sake of the country.
He expressed deep concerns over the ongoing and never-ending political brawl in the country, cautioned that this tussle has created a disastrous situation for Pakistan’s economy which was already in an awful state and the business and industrial community fears that the situation would worsen further if all political parties do not bother to realize the gravity of the situation and continue to blame each other.
READ MORE: FBR urged to wave further tax on providing CNIC number
Chairman BMG, in a statement, pointed out that the widespread propagation of political battling in the mainstream and social media was sending a very negative message to the rest of world by portraying Pakistan as an extremely unstable country which was neither in favor of the country nor in favor of political parties.
Political war was the only thing visible nowadays in the mainstream and social media while the pressing economic issues were being ignored that has led to plunging the economy way back into deep crises. “All of us must realize that our existence depends on Pakistan’s existence. Hence, the political differences must set aside and all political parties must make collective efforts to bring the economy out of crises”, he stressed, adding that it was high time that all political parties must jointly devise and agree upon the desperately needed ‘Charter of Economy’ which the Karachi Chamber has been demanding since long.
READ MORE: Tax exemption sought for plant, machinery import
Zubair Motiwala said that regardless of political differences, the economic policies once agreed upon and implemented under the Charter of Economy must remain intact and all political parties must remain on one page as far as the economy was concerned. “Instead of politics, the economy has to lead the country at any cost so all political parties must exhibit patience and take those moves which were in the favor of Pakistan and its economy.”
Chairman BMG said that the worsening state of Pakistan’s economy was likely to terribly affect the exports as under the prevailing circumstances, foreign buyers will be reluctant to place any order keeping in view the overall political and economic instability which may delay export shipments.
READ MORE: Proposed list of higher withholding tax rates for non-filers
He quoted that today Pakistani rupee has depreciated to its lowest level in the history of Pakistan while the banks were neither retiring nor accepting any documents as they claim they don’t have any dollar to pay, which is creating a very disturbing scenario which might bring down the morale and confidence of the business community. “Business community is of the opinion that all this mess is created because of the political instability and the economy of Pakistan is not that bad as the exports of Pakistan marked an increase of 24 percent as compared to last year.
He further said that criticism of political parties on each other and institutions of Pakistan also plays havoc with the confidence level of the business community and most importantly, it creates a trust deficit amongst the buyers of Pakistan goods abroad. “If all political parties do not understand, the scenario looks pessimistic and could deteriorate further hence, it is our appeal that economy must be segregated from political issues and things need to be brought back to normal in order to save the economy of Pakistan. Saving the economy of Pakistan would be like saving Pakistan”, he added.
READ MORE: PSX demands slashing CGT rates on disposal of shares
He also appealed that political tussle and blame game by all political parties must be avoided as Pakistan’s deteriorating image in the international arena and the consequent depleting exports would be disastrous for the economy and put Pakistan’s survival at stake.
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FPCCI demands CNIC condition withdrawal
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday demanded the authorities to withdraw CNIC condition on transactions.
FPCCI president Irfan Iqbal Sheikh categorically demanded that CNIC Condition needs to be withdrawn in the upcoming Federal Budget 2022 – 23 and the Finance Act 2022 for being counterproductive as it has failed to generate more taxes.
READ MORE: FBR urged to wave further tax on providing CNIC number
The CNIC condition has given a rise to the use of flying invoices and fake documentation.
Nowhere in the world a buyer is asked to submit their NIC while making a purchase and the conditionality defies every administrative, regulatory, operational, commercial and economic sense, he added.
Irfan Iqbal Sheikh maintained that introduction of CNIC condition was merely a part of political sloganeering at the cost of economy and now the same vested interests are propagating for its continuation; whereas, they have no understanding of the ground realities of business, industry and trade.
READ MORE: Tax exemption sought for plant, machinery import
Irfan Iqbal Sheikh added that FPCCI has also briefed Miftah Ismail, Federal Minister for Finance & Revenue, on the issue and how it is hampering the economic and commercial activities in the country.
FPCCI Chief explained that this condition negatively affects the production and market sales of the businesses in Pakistan. He recalled that Chairman FBR visiting FPCCI did concede that due to the condition of CNIC there has been a drop in sales tax collection, during his visit in the year 2021.
READ MORE: Proposed list of higher withholding tax rates for non-filers
President FPCCI has added that the only workable solution to generate more taxes is to present a business-friendly and pro-growth budget in consultation with the stakeholders, i.e. businessmen, traders and industrialists.
Irfan Iqbal Sheikh has reiterated, as President of the apex body, his resolve to play his mandated role of creating bridges and promoting cooperation between the business community and the government &its regulators from the platform of FPCCI.
READ MORE: PSX demands slashing CGT rates on disposal of shares
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Employers demand urgent steps to avoid economic crisis
KARACHI: Ismail Suttar, President of the Employers’ Federation of Pakistan (EFP), has requested the Prime Minister Shehbaz Sharif and the Federal Minister for Finance and Revenue Miftah Ismail to take urgent steps to avoid a national crisis due to Pakistan’s worsening Balance of Payments (BOP) position.
Without the timely adoption of such measures, Pakistan will face dire consequences in the very near future.
READ MORE: Employers criticize increase in key policy rate
In a statement, EFP president said that rising debt repayments and constantly increasing import payments are fuelling Pakistan’s BOP crisis. Pakistan’s current monetary imbalance has been caused by an excessive rate of credit creation.
Ismail Suttar said: “The country’s imports have surged to $65.5 billion (FY 2021-22) in comparison to $44.7 billion (FY 2020-21) in the previous financial year. In the 2021-22 financial year, Pakistan recorded $26.2 billion in exports. One of the main reasons for incurring such a deficit is Pakistan’s heavy reliance on petroleum product imports. The ongoing war between Russia and Ukraine has further caused commodity prices to skyrocket which is why Pakistan needs to plan ahead as the economy cannot sustain such costs any longer.”
READ MORE: EOBI to launch self assessment scheme for employers
He further said that due to increasing demand, Pakistan’s energy import bill has nearly doubled to $14.81 billion in the current financial year as compared to $7.55 billion incurred in the previous year. This BOP deficit is causing a huge strain on the economy leading to an inefficient use of Pakistan’s already limited foreign reserves. Due to this widening gap in the BOP, it is imperative for the Government of Pakistan to implement monetary and fiscal policies that will help reduce aggregate expenditure in the economy.
“One such measure is to introduce policies that discourage the use of petroleum products. Such a policy can be in the form of an increase in the prices of petroleum products, imposing an import quota on petroleum products or even introducing laws that restrict the amount of petroleum products an individual can consume”, he said.
Ismail Suttar was of the opinion that the Government of Pakistan should actively work on a comprehensive electric automobiles policy to encourage the use of alternative sources of energy to petroleum. Another measure is that the Government of Pakistan should impose a temporary ban on the import of luxury/non-essential goods such as luxury cars until we are able to substantially improve our BOP position. Another measure is the Government of Pakistan should provide incentives/subsidies to companies involved in export as this would help in making our products more competitive in the international markets, thereby resulting in a better BOP position due to an increase in exports.
The EFP president added that the Government of Pakistan should act immediately and implement such measures instead of shying away due to public uproar/disapproval as without such measures Pakistan is heading for an economic crisis of epic proportions. The State Bank of Pakistan’s (SBP) reserves currently stand at an estimated $10.499 Billion. These reserves are depleting at an accelerated pace due to debt repayment, high inflation and weakness of the Pakistani Rupee. Piling on more debt may give temporary relief, however will cause added pressure and push Pakistan deeper into the debt-trap.
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FPCCI suggests amnesty for cryptocurrency declaration
KARACHI: Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has recommended the government to launch an amnesty scheme of asset declaration for cryptocurrencies.
The FPCCI, which is the apex trade body of the country, in a letter to Prime Minister Shahbaz Sharif suggested measures to improve foreign exchange reserves.
READ MORE: FPCCI protests over advisory council formation
It said: “Investments in cryptocurrencies started with speculative gaming but in recent years have grown into humongous sizes. It is imperative for government authorities to first launch a one-time asset declaration scheme and devise a regulatory framework for future transactions.”
Capital gain taxes, similar to stock market investments, should also be introduced which will provide an additional source of tax revenues for the country.
READ MORE: FPCCI demands reducing income tax slabs to five
The FPCCI suggested a mechanism for the proposed amnesty scheme, which included:
i. Encashment of cryptocurrencies in Pakistan and converting the foreign exchange into the Pakistani rupee may be allowed with no tax.
ii. Encashment of cryptocurrencies in Pakistan and held as deposits in foreign exchange accounts Pakistan may be allowed with a 5 per cent tax.
iii. Encashment of cryptocurrencies in Pakistan and held as deposits in Roshan Digital accounts may be allowed with 10 per cent tax for non-resident Pakistani nationals/dual nationals.
READ MORE: Tax slabs reduction may be considered: FBR chairman
The apex trade body also advised the government to launch amnesty scheme to deposit dollars in local banks.
It said that Pakistan’s total foreign exchange reserves have been depleting significantly since December 2021.
The liquid forex reserves have reached the lowest level of US$ 17.01 billion in April 2022 since June 2020 (on weekly basis).
READ MORE: High interest rate to destroy economy: FPCCI
The reserves held by SBP are only enough to bear the imports bill for only two more months7. Increasing current account deficit and debt repayments (including repayment of the US$ 2.4 billion loan facility given by China) have eroded reserves significantly.
The government should launch an incentive scheme to channelize dollar holdings from lockers and personal safes into bank accounts.
The government may exempt such deposits from any taxes if these have not been declared earlier in tax returns which will be held in local accounts for at least one year.
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FPCCI protests over advisory council formation
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly protested over no consultation of industry in formation of economic advisory council by the new government.
In a statement on Friday, FPCCI President Irfan Iqbal Sheikhhas expressed his shock over the formation of Economic Advisory Council under the leadership of Prime Minister Mian Shehbaz Sharif without consulting the business, industry and trade community of Pakistan.
READ MORE: FPCCI demands reducing income tax slabs to five
“We have also not given a representation in the council; and, it is counterproductive – to say the least,” he added.
The FPCCI is the apex trade body of the country and represents chamber of commerce and trade associations across the country.
Irfan Iqbal Sheikh maintained that FPCCI is the apex chamber of the country and its representation would provide the able and timely assistance to the Prime Minister and his economic team in the matters of budget-making; taxation and tariffs; governance & administrative reforms; rapid industrialization; textiles and allied industries; promotion of information and communication technologies; EPZs and SEZs; export growth & import substitution; rupee-dollar parity and SMEs.
READ MORE: Tax slabs reduction may be considered: FBR chairman
FPCCI President noted with concern that current account deficit (CAD) will be close to $20 billion, which is well above 5 percent of GDP; inflation has crossed 12 percent and heading towards 15 percent by the year end; trade deficit has crossed $35 billion in the nine months of July – March; KIBOR is 14.10 percent after 13 years and 6-month treasury bills at 14.99 percent after 22 years.
“Interestingly, this is happening in spite of record proceeds from exports, remittances and taxes,” he added.
READ MORE: High interest rate to destroy economy: FPCCI
While proposing the imposition of an economic emergency a few days back, FPCCI President has also expressed his willingness to engage with the government in a productive consultative process to take on the economic challenges collectively in the broader national interest.
However, Irfan Iqbal Sheikh has reiterated his stance that policies should not be announced in a vacuum without consulting the business, industry and trade community – as they are the real stakeholders in the economy.
READ MORE: Political unrest dents foreign investors’ confidence: Nisar
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KATI demands ban on unnecessary imports
KARACHI: Korangi Association of Trade and Industry (KATI) has demanded the government to immediately impose ban on unnecessary imports to prevent the economy from collapse.
Acting President of KATI Farrukh Qandhari in a statement issued Monday expressed concern over the current account deficit reaching a record high of over $13 billion dollars in the first nine months of the financial year 2022. During the same period last year, the deficit was $275 million, which increased hundred times in one year, bringing the economy to the brink of collapse.
READ MORE: KATI terms sudden policy rate hike as economic disaster
He said that the current account deficit was $1 billion in March alone, up from $369 million compared last year.
KATI acting president said that in such a scenario, saving the economy is a huge challenge for any government and it is impossible to move the economy in the right direction without taking historic or revolutionary steps.
READ MORE: PKR becomes worst currency in region: KATI
Farrukh Qandhari demanded: “The government should ban unnecessary imports and provide incentives to increase exports.”
He said that the current account deficit could not be eliminated without increasing revenue.
Acting President KATI said that it was difficult to increase the demand for Pakistani products in the global market without increasing industrialization and reducing production costs. He said that Pakistanis living abroad are playing an important role in managing the national economy but there are still many problems.
READ MORE: KATI expresses concerns over rising inflation
Farrukh Qandhari said that in view of the current situation, we are facing a flight of investment from the country, which is making the situation more worrying. He further said that only the development of industry in the country can take Pakistan out of its economic woes.
Farrukh Qandhari hoped that the new government would take care of the situation and make decisions that would not lead to further borrowing to cover the deficit. He further said that instead of the country and the nation being indebted, decisions should be taken which would be popular among the people and industrialists and will stabilize the economy.
READ MORE: KATI strongly criticizes hike in petroleum prices