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  • FPCCI demands CNIC condition withdrawal

    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    FPCCI president Irfan Iqbal Sheikh categorically demanded that CNIC Condition needs to be withdrawn in the upcoming Federal Budget 2022 – 23 and the Finance Act 2022 for being counterproductive as it has failed to generate more taxes.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

  • Employers demand urgent steps to avoid economic crisis

    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.

  • FPCCI suggests amnesty for cryptocurrency declaration

    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.

  • FPCCI protests over advisory council formation

    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

  • KATI demands ban on unnecessary imports

    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

  • FPCCI demands reducing income tax slabs to five

    FPCCI demands reducing income tax slabs to five

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday urged the government to reduce income tax slab to 5 – 7 from 11 slabs.

    FPCCI President Irfan Iqbal Sheikh proposed the simplification of personal income tax slabs down to 5 – 7 from the current 11 slabs. Interestingly, IMF has also recommended the same and can add up to Rs200 billion to the tax collection in a couple of years.

    READ MORE: Tax slabs reduction may be considered: FBR chairman

    FPCCI president said that the economic and business environment has reached a point where the business community finds the demand of imposing an economic emergency justifiable to put an end to the economic uncertainty. He added that businesses cannot operate profitably under such harsh and unfavorable conditions.

    Irfan Iqbal Sheikh emphasized that the policy rate must be aggressively brought down to 7 percent from its current level of 12.25 percent to make access to finance affordable for the private sector to keep the economic activities afloat.

    READ MORE: High interest rate to destroy economy: FPCCI

    He also noted that the step will bring down the short-term debt servicing of the government by Rs300 billion; and, provide breathing space to the government for the better fiscal management.

    Irfan Iqbal Sheikh noted with concern that the budgetary deficit is also increasing due to the incessantly loss-making State-Owned Enterprises (SOEs) and now it is absolutely imperative to reform and restructure them decisively; as their share in budgetary deficit has reached to 23 percent.

    READ MORE: Political unrest dents foreign investors’ confidence: Nisar

    He also called for an increase in FED on cigarettes and carbonated drinks to serve the dual purpose of generating revenues and protecting the general public in general and the workforce in particular from health hazards that have been unleashed on them by smoking and diabetes-causing sweetened drinks. He added that if FED is raised on cigarettes to 70 percent, Pakistan can generate up to Rs. 240 billion additional revenues.

    FPCCI President expressed his willingness to engage with the government in a consultative process to take on the economic challenges collectively in the broader national interest. However, he 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.

    READ MORE: FPCCI proposes charter of economy to new government

    Additionally, he called for a pro-business federal budget 2022 – 23; enabling the private sector to invest in the economy, set up new industry, increase exports on an expedited rate, generate employment and contribute towards revenue collection in a healthy manner.

  • FPCCI proposes charter of economy to new government

    FPCCI proposes charter of economy to new government

    KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday welcomed the new government and proposed a charter of economy to forge an unflinching commitment towards economic growth.

    According to a statement issued, Irfan Iqbal Sheikh, President FPCCI, welcomed and felicitated the formation of new government and its cabinet. He said that the business community was profoundly concerned over the vacuum in the federal executive structure; which has now been taken care of after the assigning of major portfolios across the federal ministries.

    READ MORE: High interest rate to destroy economy: FPCCI

    Sheikh proposed a non-political, inclusive, sustainable and legally-binding Charter of Economy to forge an across the board contract and unflinching commitment towards economic growth, development and equality. He said that the aforementioned charter should encompass all sectors of the economy and all segments of the society. Let’s work together for a prosperous, egalitarian and industrialized Pakistan, he added.

    Expressing his optimism, Irfan Iqbal Sheikh said that FPCCI is very much positive that the incumbent Prime Minister will bring a noticeable change in the governance, administration and delivery on the back of his proven track-record to successfully implement reforms and complete wide-ranging mega projects before time.

    READ MORE: Political unrest dents foreign investors’ confidence: Nisar

    Irfan Iqbal Sheikh added that while FPCCI acknowledges the initial gains in the rupee-dollar parity & PSX, there are many immediate and pressing issues of trade, industry and the economy in the eyes of the apex chamber of the country.

    FPCCI Chief informed that credible international agencies now forecast Pakistan’s current account deficit in the Fiscal Year 2022 at $18.5 billion – which is more than 5 per cent of GDP. The new government and its Finance Minister should start an objective and inclusive consultative process with the stakeholders in the business community and take them into confidence on how and why the government will be able to manage the current account deficit.

    READ MORE: Tax slabs reduction may be considered: FBR chairman

    Irfan Iqbal Sheikh maintained that Trade Deficit has surpassed $35.4 billion in the nine months (July-March) of the current Fiscal Year 2022. FPCCI advocates tangibly incentivizing & subsidizing Industrialization, Import Substitution, IT Exports and Facilitating Small & Medium Enterprises (MSMEs) in the Export-Oriented Industries for the near-term gains, he added.

    FPCCI President emphasized that circular debt has reached PKR. 2.5 trillion and has put Pakistan’s energy security at a heightened risk. The government must ensure fuel & energy supplies to the industrial sector through an elaborate and well-communicated plan of action.

    Irfan Iqbal Sheikh noted that food inflation has crushed the masses on the back of international fuel & commodities prices and supply-side mismanagement. The government must swing into action with the assistance of private-sector to ensure food security.

    READ MORE: Political turmoil to create economic instability: FPCCI

    Sheikh, condemning the policy rate hike, said that raising the policy rate to 12.25 per cent can very well be proven as the last nail in the coffin of SMEs; which are already under dire strains due to the burgeoning cost of doing business; abysmal ease of doing business indicators; difficulties in access to finance; uncertainties in access to foreign exchange and regionally- uncompetitive costs of electricity & gas. He has demanded the immediate reversal of the policy rate hike.

    FPCCI Chief reiterated that FBR has become a notice manufacturing factory and proposed  strategic & sustainable reforms in consultation with the business community; elimination of maladministration, corruption & harassment and withdrawal of unfair notices.

  • PBC submits measures to avoid challenges confronting Sri Lanka

    PBC submits measures to avoid challenges confronting Sri Lanka

    KARACHI: Pakistan Business Council (PBC) has urged the new prime minister of Pakistan Shahbaz Sharif don’t allow the country to experience the kind of challenges confronting Sri Lanka.

    The PBC in a letter congratulated the Prime Minister and assured him of full support in tackling the challenges facing the economy.

    READ MORE: Minimum tax 0.2% suggested for listed chemical companies

    The PBC recommended the new prime minister to stem the pressure on foreign exchange reserves by reducing imports. “Don’t allow the country to experience the kind of challenges confronting Sri Lanka,” it said. In order the discourage imports, the PBC recommended raising regulatory duty on import of non-essentials. Further, as regulatory duty is impractical on fuel imports, limit import through conservation measures: work from home, early closure of commercial centers and wedding halls; rationing of fuel private vehicles.

    There are several very critical choices that your government needs to make in the next few days. Foremost amongst these is restoring fiscal prudence, stemming the pressure on the foreign exchange reserves and reviving the IMF programme. In the attached summary we have listed the immediate economic imperatives and offered our suggestions on the way forward.

    READ MORE: Proposals for capital gain on disposal of securities by insurance companies

    The PBC urged the prime minister to restore fiscal prudence by withdrawal of general subsidy on fuel. “Replace with targeted assistance through BISP,” it recommended. The council suggested to avoid further populist measures that also result in increasing the inflation.

    The PCB recommended equitable taxation and urged the prime minister for avoiding burdening existing taxpayers further. “Avoid knee-jerk revenue seeking measures that impact the long term health of the economy,” it added.

    READ MORE: FBR urged to align corporate tax rate for banks

    The PBC suggested to accelerate Federal Board of Revenue (FBR) reforms to broaden the tax base, pending which, increase the advance and withholding tax rates on non-filers.

    Review anomalies that arose from hasty changes to meet the claimed demands of the IMF: Multiple taxation of inter-corporate dividends and other anomalies in group taxation; tax credits for investment; and other exemptions that still had time to run.

    It is further suggested to phase down the inequitable minimum and advance taxes on the formal sector which raise the cost of doing business.

    READ MORE: OICCI suggests duty cut on locally manufactured cars

  • KCCI felicitates Shahbaz for becoming Prime Minister

    KCCI felicitates Shahbaz for becoming Prime Minister

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Monday felicitated Shahbaz Sharif for taking oath as 23rd Prime Minister of Pakistan.

    The leadership of Businessmen Group (BMG) and Office Bearers of the Karachi Chamber of Commerce & Industry, on behalf of the entire business and industrial community of Karachi, extended heartfelt congratulations to Shahbaz Sharif on taking oath as 23rd Prime Minister of the Islamic Republic of Pakistan.

    READ MORE: KCCI demands immediate withdrawal of policy rate hike

    In a joint statement issued, Chairman BMG Zubair Motiwala, Vice Chairman BMG Tahir Khaliq, Haroon Farooki, Anjum Nisar and Jawed Bilwani, General Secretary BMG AQ Khalil, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi and Vice President Qazi Zahid Hussain hoped that Prime Minister Shahbaz Sharif would now prioritize some of the urgent economic issues being faced by the country and pay special attention to the problems being suffered by the business & industrial community of Karachi since long. They also advised the Prime Minister to come up an effective mechanism which must ensure that every single decision or policy which directly or indirectly affects trade and industry, must devised in consultation with the business and industrial community.

    READ MORE: SBP intervention sought to stop further rupee devaluation

    They were of the opinion that the federal government has to pay attention towards some of the most pressing issues of Karachi particularly improving the infrastructure of Karachi and other serious issues like gas, electricity and water crises being faced by the business & industrial community of this city which continues to contribute a mammoth share of more than 65 percent revenue to the national exchequer, more than 95 percent to the provincial kitty and 54 percent in terms of exports despite all odds.

    In order to ensure sustainable economic prosperity, the federal government has to revisit all the policies so that the sense of deprivation felt by Karachiites and the city’s business community may be negated.

    READ MORE: Businessmen want early resolution of political uncertainty

    They stressed that PM Shahbaz Sharif must gather a team of economic experts, reliable and honest members of Business Community, who have absolute know-how of the issues on top priority from different sectors of the economy.

    The proposed team comprising of genuine representatives of business and industrial community would surely be able to prudently guide the government in formulating numerous policies directly or indirectly affecting the trade and industry.

    READ MORE: Direct flights between Pakistan, Tajikistan needed

    This step would certainly create a win-win situation and would be warmly welcomed by the entire business and industrial community of Pakistan as it was in the larger interest of the country, they added. BMG Leadership and KCCI Office Bearers extended full support and cooperation to Prime Minister Shahbaz Sharif and his team so that long lasting progress and prosperity for the entire country could be ensured.

  • High interest rate to destroy economy: FPCCI

    High interest rate to destroy economy: FPCCI

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday said that the recent increase in interest rate will result in disaster for the economy.

    Irfan Iqbal Sheikh, President FPCCI, has expressed his profound disappointment and concerns over an unexpected and massive hike in the key policy rate, i.e. 250 bps by the Monetary Policy Committee (MPC) of the State Bank of Pakistan.

    READ MORE: KCCI demands immediate withdrawal of policy rate hike

    He said that the business, industry and trade community is shocked; and, clueless at the same time on how to cope with its fallout on economic activities, viability of doing business in Pakistan and inevitable adverse impacts on exports – in the absence of any governmental support.

    President FPCCI added that a comparative analysis of the interest rates in Pakistan and the regional countries also show a big difference to Pakistan’s disadvantage; namely, Malaysia is at 2 percent China is at 3.7 percent; India is at 4 percent and Bangladesh is at 5 percent. He emphasized that if the interest and export refinancing rates are not decreased drastically in Pakistan, we will not be able to compete with the regional countries as well.

    READ MORE: SBP increases policy rate sharply by 250bps to 12.25%

    Irfan Iqbal Sheikh explained that the current tide of the inflation had nothing to do with the policy rate of SBP; but, it was due to the political uncertainty and lack of any direction in economic policies due to it.

    Additionally, he added, that the inflation in Pakistan has been due to supply-side disruptions and again had nothing to do with the interest rate.

    President FPCCI elaborated that it was business community’s genuine demand, even before the recent interest rate raise, that the policy rate should be gradually brought down from 9.75 percent to ensure availability of capital to businesses at lower and affordable rates. Contrary to what was needed, the interest rate has now been hiked to 12.25 percent; which will put a halt to the economic and commercial activities in the country.

    READ MORE: KATI terms sudden policy rate hike as economic disaster

    Outlining three factors, Irfan Iqbal Sheikh said that volatile rupee-dollar parity, uncertainty in political & economic environment and interest rate hike will totally crush the SMEs; as cost of doing of doing business, ease of doing business, access to capital, access to foreign exchange and remaining profitable will all be next to impossible for SMEs.

    Irfan Iqbal Sheikh said if the authorities do not interfere immediately, there will be a lot of bankruptcies, many export orders would not be fulfilled, huge loss of employment opportunities; and loss of tax revenue will follow. He has called upon the authorities to instantaneously start a consultative process with all the stakeholders to find a workable way out of the current crises.

    READ MORE: SBP intervention sought to stop further rupee devaluation