KARACHI: The American Business Council (ABC) of Pakistan has appreciated the efforts of the government to facilitate taxpayers, ameliorate ease of doing business and incentivize digitization of the economy, according to a statement released on Tuesday.
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This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.
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Water shortage stalls industrial production: NKATI chief
KARACHI: Industries located in North Karachi have facing acute water shortage for the past many days and due to this production activities have been stalled and it is feared that export orders may be missed.
Faisal Moiz Khan, President, North Karachi Association of Trade & Industry (NKATI), while expressing deep concern over non-supply of water to the industries, requested Sindh Governor Imran Ismail and Syed Murad Ali Shah, Chief Minister Sindh to take notice of the severe and issue directives to Managing Director Water Board for supplying water as per consumption of the industries. So that production activities can continue without any hindrance.
In a statement, Faisal Moiz Khan said that water is of utmost importance for the continuation of production activities and is one of the basic raw materials, but these days, North Karachi’s industries are facing severe water shortages, while the tanker mafia has plenty of water. In contrast, water is not available from water board lines, which is a question mark?
“Production activities are stalled due to non-availability of water to factories. This can affect both the production of goods and the timely delivery of foreign orders”, he feared.
NKATI Chief also protested against the attitude of the MD Water Board, and said that when the MD Water Board was contacted about the non-supply of water to the industries as per the demand, he did not give any positive response to the industrial community. On the contrary, his attitude was highly reprehensible
Faisal Moiz Khan requested Sindh Governor Imran Ismail and Syed Murad Ali Shah, Chief Minister Sindh to issue directives to MDMD Water Board to adopt a better attitude towards the industrial community and ensure water supply as per the demand while resolving issues on priority basis. Otherwise, production activities will be severely affected, which will have a negative impact on the country’s overall exports.
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KATI seeks precautionary measures before rains
KARACHI: Korangi Association of Trade and Industry (KATI) has urged the authorities to take precautionary measures before heavy rains in order to avoid human and financial losses.
Patron-in-Chief S M Muneer and President Saleem-uz-Zaman has said that the Meteorological Department in coming days has forecast heavy rains in Karachi.
In such cases, precautionary measures should be taken to avoid any possible incident. K-Electric, at the request of KATI, had elevated the grid stations of the industrial area and secured the electrical installations to save precious lives, which has greatly reduced the risk of any possible accidents during rains.
They embassies on awareness campaigns and special messages should be issued to the people to take precautionary measures before the rains.
S M Muneer appealed to the people of Karachi, especially the employees and labors to be careful in the rains, stay away from electrical installations and avoid installing Kunda during rainy season.
Saleem-uz-Zaman requested the factory’s administrations of Korangi Industrial Area to take precautionary measures before the rains and save the lives of the employees.
President KATI suggested that special messages be issued by the concerned departments for pre-rain awareness and special teams be formed to protect precious human lives and property of the people from damage.
Saleem-uz-Zaman appealed to the government agencies to complete the repair of the city’s highways and manholes so that the rains do not become a nuisance for the citizens like last year.
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Foreign investors pay Rs1.4 trillion as annual tax revenue in Pakistan
KARACHI: The foreign firms operating in Pakistan have paid around Rs1.4 trillion as duty and taxes during fiscal year 2020/2021, said Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday.
The OICCI is the chamber of leading over 200 foreign investors in Pakistan belonging to 35 countries. It released the consolidated financial contribution of its members for the year 2020 based on feedback from 170 members, 50 of whom are subsidiaries of Fortune 500 companies.
The foreign investors have contributed significantly towards the GDP of the country and have maintained the OICCI position as the largest chamber of commerce in terms of economic contribution in the country. This comprehensive survey is being conducted annually since 2009.
Elaborating on the key features of the OICCI 2020 Economic Contribution survey, Irfan Siddiqui, President OICCI highlighted that “we are proud that in the past twelve months, OICCI members, despite very challenging and uncertain business environment due to COVID-19 impact on the business and life of people globally and in Pakistan, contributed over Rs 1.4 trillion, or approximately Rs five billion each working day, towards the tax revenue of Pakistan, approximately one third of the total tax collection in the country. Two of the OICCI members paid taxes in excess of Rs 100 billion each “.
Commenting on the significant contribution of foreign investors in the economy of Pakistan, Irfan Siddiqui added “OICCI members believe in Pakistan and going forward are keen for playing a more prominent role in a growing economy supported by a predictable, transparent and stable policy framework and a business friendly regulatory and operating environment”.
OICCI members have in the past nine years invested over US $ 18 Billion, largely in the Energy, Telecom, Chemicals, Food /FMCG and Banking sectors. “With an asset base of US $ 137 Billion,” Secretary General, OICCI, M Abdul Aleem added,” OICCI members’ maintained their position as the leading investors in Pakistan during 2020 with new investments of over US $ 2.4 Billion mainly in the Energy, Telecom and Chemicals sectors.”
Besides the monetary contribution, OICCI members also play a leading role in the transfer of technology, digital transformation, introducing latest inventions and sharing of best practices in the field of manufacturing operation, supply chain and marketing of internationally renowned brands.
Moreover, OICCI members, as a group, are the largest contributor towards the social sectors. In the last one-year OICCI members contributed Rs 8 billion to social initiatives, benefiting 62 million people throughout the country, and also contributed an additional Rs 8 billion for the various government and private sector COVID-19 containing activities.
In conclusion, OICCI Secretary General observed that “Pakistan suffers from negative perception which is largely uncalled for, requiring authorities to work in partnership with serious stakeholders, like OICCI, to ensure the country gets its due share of the significant FDI coming to this region.”
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FPCCI demands withdrawal increase in duty, taxes on CNG sector
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday demanded the government of withdraw its decision of increasing duty and taxes on CNG sector.
In a statement FPCCI President Mian Nasser Hyatt Maggo said that the sales tax on LNG for CNG sector has been increased from 5 per cent to 17 per cent – while customs duty of 5 per cent has also been imposed. “Given that CNG is expensive and the survival of this business is in jeopardy. This decision should be reversed immediately,” he demanded.
He said that the gas crisis is caused by poor management, bad decision-making, and lack of vision. After Sindh, gas is being cut off across the country; which is unacceptable. This will cause huge losses to the business community and the public alike; affecting businesses and reducing production and exports.
Addressing an emergency press conference, FPCCI’s President said that the entire country was in the grip of energy crisis due to the badly-timed import of LNG and CNG sector.
It was the worst time to go for yearly repair and maintenance of the LNG terminal. As a result, it has been decided to generate electricity from furnace oil; which is an expensive option.
The government neither imports gas itself; nor allows the CNG sector to import – which is out of sound mind.
Ghiyas Abdullah Paracha – Group Leader, All Pakistan CNG Association – said that the policies of the energy sector were not in line with the ground realities. The crisis will continue until the CNG sector is allowed to import its own gas. Gas companies are destroying people’s businesses and taking away jobs. If we import our own gas, the load shedding will end and the government will generate Rs. 82 billion; but, this is not acceptable to a few bureaucrats. He further added that the CNG sector in Punjab and Sindh is using imported gas; so, it has nothing to do with the reduction in domestic gas production; nor does it have any justification to cut off gas.
Khalid Latif – Chairman, All Pakistan CNG Association – said that Rs. 450 billion have been invested in the CNG sector; but, the future is bleak. Hundreds of thousands of workers have been displaced from the CNG sector; but, they have been brought to the brink of disaster.
FPCCI demanded that the government should take steps to rehabilitate the sector by revoking the decision to impose additional taxes and ensuring the availability of environmentally friendly and cheap fuel to the people; so that, pollution and fares do not increase and millions of jobs can be saved.
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Finance minister urged to allow tax exemption on raw salt sales
KARACHI: Ismail Suttar, President, Employers’ Federation of Pakistan, and Chairman of Salt Manufacturers’ Association of Pakistan (SMAP), while appreciating the people-friendly Federal Budget of 2020-21, appealed to the Finance Minister, Shaukat Tareen to reconsider for exemption raw salt from tax regime.
In an appeal to the Finance Minister, EFP Chief stressed that table salt is considered an essential food item. He added that from 1990, until today, the iodized salt has remained exempted but businessmen producing iodized salt from table salt will have to pay sales tax on table salt and this will be reflected in the retail price of iodized salt.
“Table Salt is produced from raw Sea Salt, Ismail claimed, and Iodized Salt is produced by adding Iodine to the Table Salt. Law forbids marketing of table salt and allows only iodized salt for eating purposes. Therefore, raw salt if taxed will increase the cost of iodized salt and it will be a burden on the common man. So, the raw salt should be exempted from the sales tax regime”, he added.
Ismail Suttar further said that the salt which will be used and supplied as industrial salt may remain taxable because it will not affect the common man. It will be without Iodine so there should be two grades of salt: one iodized and the other non-iodized salt mostly used in industries after proper processing.
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Gas supply suspension cripples industries, halts production
KARACHI: The Karachi Chamber of Commerce & Industry (KCCI) and its affiliated industrial town associations have shown deep distress towards non-supply of gas to industries of Karachi for the last 14 days since 11 June, 2021 with ZERO gas pressure which has crippled industries and halted production that will ultimately lead to huge losses.
According to a statement issued, the supply of gas has been closed in the name of annual turnaround (ATA) of Kunnar Pasaki field. Previously such disruption was caused due to ATA of Gambat field. All such ATA / maintenance must be planned at least six months and intimated to all concerned promptly. If SSGC as per its claim was facing gas shortfall of 200-250 mmcfd from Kunnar-Pasakhi Deep (KPD) gas field and Engro Terminal, this shortfall could have been surmounted through RLNG for the time being but instead of doing so, they announced abrupt suspension of gas supplies to industries which was totally unacceptable as it would prove disastrous not only for the business community but also for economy and the public.
KCCI appealed Prime Minister Imran Khan to order SSGC to refrain from suspending gas supply and also order a probe into the massive gas mismanagement as the industries in Karachi, which were already going through unbearable circumstances, cannot afford any interruption in their production activities due to suspension of gas supplies.
Despite of the fact that the Government has accorded priority in supply of gas to export sector, the export industries of Karachi are also deprived of gas. Exporters are fearing excessive delays in export shipments and will lead to shipment by Air or cancellation of orders. Whereas, the export shipment of 40 feet container by sea to USA costs USD 8,400/- while the same shipment by air costs USD 93,000/- which is equal to the total cost of said consignment of 40 feet container. In this manner, the export industries are facing colossal financial losses and shall be bankrupted leading to permanent closure and massive layoffs. Needless to mention here that more than 40 allied industries which include general industry are also associated with export industries which provide them goods and services.
It is pertinent to note that Karachi contributes to around 60 per cent in national exports. Due to the situation if 10 per cent export is affected it means 5 per cent decline in national export. The estimated losses caused to national exports on daily basis comes to around USD 44 million (PKR 7 billion). As per the Government’s gas priority policy five export sectors would be treated on a par with the power sector in gas supplies. In contravention to its own policy, the Government is providing gas to power company of Karachi while export sector has been deprived to gas.
KCCI is surprised as to why SSGC has disrupted gas supply on account of Annual Turn Around of Kunnar field on working days which must have been done during Eid Holidays when there is no industrial usage of gas. KCCI fail to understand why such incidences happen repeatedly only in Karachi in every 3-4 months. Whether such attempts on part of the Government are deliberate to compel the industries of Karachi to shift abroad? Why should the export industries of Karachi may bear the brunt of the mismanagement caused due to ill-planning on part of the Ministry of Petroleum and SSGC?
KCCI appealed to the Prime Minister of Pakistan and Federal Minister of Energy to take immediate notice of Zero Pressure of gas to industries of Karachi and intervene to resume gas as quick as possible so that the industries and export must not suffer further in the best interest of economy, exports and foreign exchange earnings.
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Gas supply suspension: NKATI appeals PM to save industry
KARACHI: Faisal Moiz Khan, the President of the North Karachi Association of Trade & Industry (NKATI), has issued a fervent appeal to Prime Minister Imran Khan to intervene and rescue Karachi’s industries from the brink of disaster.
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FBR manipulates budget 2021/2022, proposals not to provide relief to business community: FPCCI
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has alleged Federal Board of Revenue (FBR) for proposing and manipulating the budget 2021/2022, as the proposals will neither provide relief to business community nor it will help in economic growth.
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Export orders under threat as gas supply to industries suspended
KARACHI: Industrial activities come to a standstill as gas supply was suspended by Sui Southern Gas Company (SSGC). The suspension would affect meeting export orders.
Abdul Hadi, President, Site Association of Industry, while expressing deep concern on Saturday over non-supply of gas to the industries of the site area, said that Sui Southern Gas Company (SSGC) has suspended the supply of gas to the industries.
“As a result, the gas crisis has intensified and production activities have come to a standstill position and many industries have been shut down. He demanded to restore Gas supply to the industries at the required pressure so that production activities can be resumed.”
He appealed to Prime Minister Imran Khan and Federal Minister for Energy Hammad Azhar, to take notice of the non-supply of gas, Abdul Hadi said that the industries of the site area have been facing shortage of gas for a week and now the supply of gas has been suspended.
“The non-supply of gas is affecting production activities, which has led to the closure of several industries. Gas pressure is constantly zero and despite repeated complaints to the SSGC, the gas pressure has not been improved. On the contrary, SSGC has taken the position that it may take another 2 to 3 days to improve the gas pressure, which is an alarm for the fulfilment of export orders”, he pointed out.
SAI chief questioned the SSGC officials that if there is such a situation of gas supply in summer, then what will happen to the gas crisis in winter? Abdul Hadi requested Prime Minister Imran Khan and Federal Minister for Energy Hammad Azhar to issue directives to SSGC to restore gas at required pressure to the industries of the site. Otherwise timely delivery of export orders will not be possible.