Business leaders have raised serious concerns over the continuous intervention of the International Monetary Fund (IMF), warning that its influence is exacerbating Pakistan’s economic struggles.
(more…)Category: Trade & Industry
This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.
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Employers criticize increase in key policy rate
Karachi: Employers have strongly criticized the State Bank of Pakistan (SBP) for recent increase in policy rate amid rising inflation.
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NKATI expresses concerns over gas disconnection
KARACHI: Faisal Moiz Khan, President, North Karachi Association of Trade & Industry (NKATI), while expressing deep concern over the gas disconnect of non-export, general industries, has demanded the government to continue gas supply with required pressure to industries.
In a statement, Faisal Moiz Khan said that Karachi should not be punished for paying 54 per cent of the country’s exports and 70 per cent of its revenue. If SSGC disconnects the gas supply to non-export, general industries then factories will be locked and the SME sector will be destroyed.
“Karachi has always played a vital role in the development of the country and is still playing a positive role in spite of all difficulties, be it for strengthening the national economy or promoting exports and providing vast employment opportunities”, he added.
He raised the question of where is the wisdom to shut off the gas of ordinary industries? The SSGC has no authority to disconnect industrial gas. On the contrary, the government should help the industries to survive in the corona economy so that the country can get back on its feet economically.
NKATI president further said that where is the justice for Sindh not getting gas? Sindh has the first right to the gas reserves of Sindh. Therefore, first of all, while fulfilling the gas needs of the people of the province, gas should be supplied to all industries with full pressure without any discrimination and then the remaining gas to be given other provinces.
Faisal Moiz Khan stated that the industrial community would not tolerate this injustice under any circumstances. The government should stop discriminating against Karachi and the resources of the province should be utilized to meet the needs of the province.
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SITE Association demands reversing policy rate at 7%
KARACHI: Site Association of Industries (SAI) has demanded the State Bank of Pakistan (SBP) to immediately withdraw the increase in policy rate and bring it back at 7 per cent.
In a statement issued on Thursday, SAI President Abdul Rasheed rejected further 100 basis points rise in interest rates calling for its immediate reversal especially when the industry is facing forced closures due to a severe gas shortage.
READ MORE: Key policy rate goes up to 9.75%; SBP raises 250bps in less than month
In a statement, SAI president said that free floating exchange rate works as a shock absorber which discourages imports in a timely manner thereby keeping current account in check.
SBP in their monetary policy statement have stated that inflation is due to supply side issues further fuelled by higher commodity prices and up to 70 per cent of current account deficit is due to rising global commodity prices.
READ MORE: SITE Association signs MoU for tax return filing
Abdul Rasheed demanded reversing the rate to 7 per cent as industries are already facing severe losses due to gas closure industry, a crisis of the magnitude of COVID 19. “With industries facing huge challenges due to closure of gas, one sided minimum wage notification, an interest rate hike could well prove to be the last nail in the coffin for troubled industrialists.”
Terming the interest rate hike detrimental for Pakistan’s economy especially for Government of Pakistan, he said, “An increase in interest rate of 275 basis points since September would result in higher fiscal deficit by increasing interest expense by Rs1 trillion on Rs26 trillion domestic debt while reducing direct taxes due to lower profitability of companies on account of higher interest expense”, he concluding that keeping raising interest rate at 7 per cent was the main reason that GOP avoided twin deficits having a better performance on the fiscal front despite deteriorating external position.
READ MORE:SITE Association hails FBR chairman’s no bank account freezing decision
SAI president discarded the idea of keeping real interest rates mildly positive as most of the countries are maintaining steep negative real interest rates including USA and UK. Terming the reversal of policy rate down to 7 per cent critical for both the private sector and GOP, Abdul Rashid Said, “it is imperative that SBP reverts its decision of raising the policy rates as it is detrimental to both the private sector as well the GOP without aiding at all in improving the current account position.”
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Korangi Association flays key policy rate hike
KARACHI: Salman Aslam, President, Korangi Association of Trade and Industry (KATI), has expressed concern over one percent increase in interest rates.
He said that further increase in monetary policy by SBP to 9.75 per cent would result in more inflation.
President Salman Aslam said that the government was trying to control inflation by raising interest rates but in the current economic scenario this decision could not prove beneficial.
He suggested that the government should provide facilities and incentives to the export industry to increase the country’s exports and increase foreign exchange reserves, thus reducing the pressure on the rupee against the dollar.
President KATI said tightening monetary policy would freeze the economy, which would hurt the economy. The government-set growth target of 5 per cent is likely to be affected.
Salman Aslam appealed to the government to take strict measures to increase exports instead of tightening monetary policy. If imports are reduced then inflation can be brought down.
He said that the SBP’s move would make loans more expensive and would further increase inflation.
Salman Aslam said that Korangi industrial area has full potential to increase exports, if the government provides facilities then KATI can play its full role in increasing exports.
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SITE industrialists condemn gas suspension
KARACHI: Abdul Rasheed, President, SITE Association of Industries (SAI), has criticized the suspension of gas supply to all non-export general industries.
In a statement issued on Monday, while totally rejecting SSGC’s imprudent decision to suspend gas supply to all non-export general industries, he demanded that instead of doing so, the SSGC should carry out staggered gas holidays along with better load management which would ensure non – export general industries will continue to run according to the given schedule.
READ MORE: SITE Association signs MoU for tax return filing
SAI president said that SSGC’s management which appears to be unaware of what was happening and was unable to control the situation, must go for staggering holidays and better load management in order to provide relief to the perturbed business & industrial community who are providing livelihood to millions of people.
Rasheed also questioned the policy to prioritising gas supply to domestic consumers over job security. “What good is gas availability for an unemployed person,” he questioned.
READ MORE: Export orders under threat as gas supply to industries suspended
He urged the government to no take populist decisions and understand the negative impact of shutting down manufacturing activity on employment and inflation.
Abdul Rasheed said the exemption given to export sector would not provide the desired results as general industries supply essential raw materials to export-oriented industries hence are an integral part of the supply chain must stay operational otherwise the export sector even with gas would not be able maintain the pace of exports.
Terming suspension of gas supply to non-export general industries as detrimental, he said, that SITE Association will not stay silent and we will use all available options including a huge sit-in outside SSGC’s Head office until relief is provided to all industries without any discrimination.
READ MORE: SITE Association hails FBR chairman’s no bank account freezing decision
SAI president was of the opinion that gas suspension to general industries would not only result in increased unemployment but would also fuel massive inflation due to shortage of essential goods in the market. “With inflation already at 18% YoY, any supply side disruption would make the situation untenable for the masses as supply side shortages would jack up prices further eroding the purchasing power of the lowest strata,” he added.
Rasheed further said that Imran Khan did not shutdown industries during COVID 19 for these very reasons while SSGC has done the same without giving heed to Prime Minister’s clear policy on the matter.
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SITE Association signs MoU for tax return filing
KARACHI: SITE Association of Industry has signed a Memorandum of Understanding (MoU) with Befiler for facilitating its members and their employees in tax filing, and related business services for promoting compliance culture among its member organizations.
Patron-in-Chief of SITE Association, Muhammad Zubair Motiwala graced the signing ceremony with his presence. Abdul Rasheed, President, SITE Association of Industry along with SVP Saud Mehmood, VP Muhammad Kamran Arbi and senior members Anwer Aziz, Riaz Uddin, Abdul Kadir Bilwani and others were present at the ceremony. Asad Ali Shah, Chairman Befiler and Akbar Ali, CEO Befiler were representing Befiler.
READ MORE: MTO Karachi asks taxpayers to file income tax returns
With this partnership, SITE Association of Industry, one of the highest taxpayer industrial zone in the country, takes another step towards further compliance. Members of SITE Association of Industry will be able to file their tax returns using Befiler app or portal, and receive support and guidance from Befiler to effectively engage with the process and become part of Active Taxpayer’s List (ATL).
SITE Association of Industry comprises of over 4,500 industrial units of varying sizes, including textiles, heavy machinery, beverages, automobiles, silk, oil, soap, food, chemicals, pharmaceuticals, steel, glass, paints, ready-made garments, etc. With this partnership, SITE Association of Industry is now taking another step towards a responsible and tax compliant institution. Through this partnership it is sending a strong message to its members in particular and citizens of Pakistan in general regarding its determination to foster a disciplined and compliant business environment.
READ MORE: Persons not required to file income tax return
Befiler is Pakistan’s largest & only digital tax filing platform offering truly digital NTN registration and tax filing experience. Befiler provides its services, and additional support through calls, live chat, and whatsapp to its clients. This partnership highlights Befiler’s wide acceptance, and credibility in Individual and Business sectors alike.
Befiler believes that through the use of technology and its digital platform, the entire ecosystem of tax filing and compliance can be automated, making it easy and simple for tax payers leading to greater number of citizens becoming compliant. Bringing digital solution to the business community is a move in the right direction given the scope for growth, systematic reforms and bringing agility to processes through the use of technology.
READ MORE: Requirement of filing income tax return by persons
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IFC helps Engro in reducing plastic waste
KARACHI: International Finance Corporation, a member of World Bank Group, has signed an agreement to assist Engro Corporation in reducing plastic waste, promoting recycling, and boosting the company’s energy efficiency.
The project is part of IFC’s Pakistan Resource Efficiency Program, which aims to improve efficiency, cost-competitiveness, reliability, and productivity in the manufacturing sector, particularly in energy-intensive industries.
READ MORE: Engro Corp approves $31.4m for petrochemical project study
IFC’s climate advisory project will help Engro Corporation assess the opportunities for moving toward a circular plastics economy as it develops a $1.8 billion petrochemical project to produce polypropylene.
The circular system would see polypropylene products collected and reused or recycled and converted into viable products.
IFC’s team will also assist Engro Corporation in driving sustainability by reducing its carbon and water footprints and adapting to climate-related risks through targeted interventions.
READ MORE: Engro Corp posts 23% revenue growth in nine months
Pakistan is the second-largest domestic market for plastics in South Asia after India and among the top 10 countries most impacted by climate change.
The country produces about 30 million tons of solid waste annually, of which 9 percent is plastic waste. Its Indus river is a major carrier of plastic waste into oceans.
Ghias Khan, President, and CEO of Engro Corporation, said: “At Engro, we believe that operating businesses sustainably at a globally competitive level need not be a zero-sum game. Therefore, we are actively partnering with global leaders such as IFC for a circular plastics economy, resource efficiency and carbon footprint reduction, to build a more sustainable future for our coming generations.”
READ MORE: World Bank’s IFC signs financing agreement to build six power projects in Pakistan
“Climate change is already impacting Pakistan and it’s crucial for companies to do everything they can to be efficient in their resource usage,” said Hela Cheikhrouhou, IFC’s regional Vice President for the Middle East, Central Asia, Turkey, Afghanistan, and Pakistan “Reusing plastics will not only cut greenhouse gas emissions and protect the environment but will help companies save money and become more competitive internationally.”
Engro Corporation has been a strategic IFC client for nearly three decades. IFC has supported Engro’s growth from an ammonia-based fertilizer producer to a conglomerate with interests mainly in polyvinyl chloride production, dairy, power generation, liquefied petroleum gas storage and handling, liquefied natural gas regasification, telecom towers and logistics.
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Envoy for removal of Saudi-Pak trade barriers
ISLAMABAD: Nawaf bin Said Al-Malki, Ambassador of Saudi Arabia in Pakistan, has stressed the need to remove barriers in trade between Saudi Arabia and Pakistan.
While welcoming a delegation from Federation of Pakistan Chambers of Commerce and Industry (FPCCI) led by its president Mian Nasser Hyatt Maggo at Saudi Embassy Islamabad, Al-Malki underscored the need of the removal of trade barriers and the promotion of trade through the direct route.
He stated that Pakistan and Saudi Arabia both possess huge natural resources which can be utilized for enhancement of bilateral trade relations.
The envoy also informed that there is huge potential in rice, textile, sea food, sports goods, agro-based products and there is a need of direct interaction between the traders of both countries in these commodities.
He said that Saudi Arabia wanted to see Pakistan as a growing economy as it is a very important country for the whole Muslim Ummah.
The ambassador said that Pakistan has lots of potential for speedy economic growth that should be highlighted more effectively to attract foreign investors.
Al-Malki urged that the media should focus on projecting the positive things of Pakistan to change wrong perception about it.
He said that wrong perceptions about Pakistan in foreign world needed to be changed to unlock its real economic potential.
President FPCCI Mian Nasser Hyatt Maggo said that Pakistan desired to further strengthen its trade ties with Saudi Arabia as both countries have great scope to promote trade in many areas.
Read More: Pakistan, Saudi Arabia agree to strengthen bilateral economic ties
Pakistan has strong strategic, diplomatic and economic relations with Saudi Arabia and cannot forget the financial assistance of Saudi Arabia in the form of oil on credit, construction of educational institutions and on Kashmir cause.
Maggo while quoting the statistics, he informed that the share of Pakistan in Saudi Arabia’s trade is just one per cent; while in Pakistan’s trade is approximately 7 per cent stated that Saudi Arabia is an important trading partner of Pakistan and the joint business council between the national chambers of both countries can play a vital role in enhancing the trade and business activities.
He urged on accelerated efforts for activation of trade and economic promotional activities through this platform. Maggo also underlined the need of exchange of trade delegations, holding of B2B meetings, trade exhibitions and business forums etc.
Read more: Pakistan, Saudi Arabia agree to enhance duty, tax cooperation
The President FPCCI further highlighted various potential areas for investment in special economic zones of Pakistan under CPEC project. He invited the investors of Saudi Arabia to explore Joint venturesin these special zones. Pakistan will facilitate Saudi investors by providing them one window operation.
Qurban Ali, Chairman Capital Office & Mirza Abdul Rehman Chief Coordinator FPCCI also emphasized on the enhancement of bilateral trades and investment and suggested opening of Saudi Arabia EXIM bank branch in Pakistan for trade facilitation. Mirza Abdul Rehman &Qurban Ali highlighted the potentials of bilateral trade in different sectors and also requested multiple entry visa to the genuine businessmen on the recommendation of FPCCI within shortest possible time.
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Yarn merchants demand cut in interest rate
KARACHI: Pakistan Yarn Merchants Association (PYMA) on Friday demanded the State Bank of Pakistan (SBP) to cut interest rate to provide relief to coronavirus hit economy of the country.
In a statement Saqib Naseem, Central Chairman Pakistan Yarn Merchants Association (PYMA), while expressing deep concern over the non-reduction of interest rates by the SBP despite the demands of the business community, said that it has recently increased interest rates by 150 basis points, and news was circulating for increasing interest rates further in the coming days, which will have a devastating effect on the corona-hit economy.
In particular, there will be a significant increase in the production cost of trade and industry, as well as a storm of inflation.
PYMA office-bearer said that economists should give suggestions in the interest of the economy, which would boost business and industrial activities in the country, and bring prosperity.
However, it has been observed that most of the measures taken by the government have increased business and industrial costs and it is becoming extremely difficult for the business and industrial community to run their businesses and industries.
“The severe economic crisis caused by the Corona epidemic, the business and industrial community was already facing a severe shortage of capital and they were struggling to survive. In these circumstances, raising interest rates by the SBP will lead to a severe financial crisis which is not in any way in the favour of the national economy”, they feared.
Saqib Naseem appealed to an advisor to the Prime Minister on Finance and Revenue Shaukat Tarin to reduce interest rates immediately to save trade and industry from collapse so that the traders have easy access to capital and they can continue their business and industrial production activities while overcoming all difficulties.
Otherwise, business and productive activities will be hampered for them, which will have a very negative impact on the economy.