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Category: Trade & Industry

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  • KCCI proposes regularizing gold, jewellery sector

    KCCI proposes regularizing gold, jewellery sector

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has submitted proposals to tax authorities for regularizing gold and jewellery sector.

    In its proposals for budget 2020/2021, the KCCI said that gold and Jewelry sector has always been a neglected and largely unregulated sector.

    No clear policy on import of Gold and precious metals has been formulated while also the export of finished Jewelry has no incentives.

    There is a massive demand and consumption of gold, silver and gems in Pakistan and annual consumption of gold is estimated at 160.0 metric tons.

    The chamber said that the demand is met mostly by undocumented sector because the foreign exchange is not provided by State Bank of Pakistan for import of gold.

    Clause under Serial.No.16 of Part II of Import Policy Order 2016, which deals with import of Gold and Silver, stipulates the condition ‘Importable subject to the condition that importer shall arrange his own foreign exchange for the purpose’.

    But there is no provision under the Foreign Exchange Rules which provides the necessary procedure to allow the importers to arrange own foreign exchange and remit the same to the supplier.

    This has resulted in smuggling and undocumented trade in Gold, and a major sector which has immense potential for exports and revenue generation is suffering with rapid decline.

    Thousands of goldsmiths, artisans and workers have lost their jobs. This sector has the capacity to produce high quality gold ornaments and designer jewelry for export.

    The Karachi Chamber proposed that the sector can be a major employer and source of revenue if appropriate policy governing import of precious metals, documentation of sales and rational tax rates are implemented in consultation with stake holders.

    Import of Gold and Silver may be allowed against payment in foreign exchange arranged by importers through local market (exchange companies and banks). Necessary legislation may be promulgated to legalize the jewelry trade.

    It will help in curtailing smuggling of gold, silver and gems. Further, jewelry trade will be documented because if the import is legalized then the subsequent entities in supply chain will be documented.

    Besides, this will unleash the potential of a large sector to contribute in growth, employment of highly skilled workers and export of Jewelry.

  • Conditions for masks import should be relaxed: Khurram Ijaz

    Conditions for masks import should be relaxed: Khurram Ijaz

    KARACHI: Khurram Ijaz, Vice President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the authorities to relax conditions on import of face masks and facilitate masses considering the spread of coronavirus.

    In a statement issued on Friday, Ijaz urged Drug Regulatory Authority of Pakistan (DRAP) to take measures for early release of stuck-up face masks at the ports.

    Khurram Ijaz said that the cases of coronavirus was on the rise. This requires that all medical facilities including face masks should be available in huge quantity.

    He said that the procedures of clearance for face mask import should be made easy.

    The vice president said that due to lethargy of DRAP a huge quantity of face masks were stuck up at the ports and it would badly hurt the supply chain, especially in the wake of rising coronavirus cases.

    The delay in clearance will also increase prices of masks in the local market, he added.

    He urged the authorities to consider the urgency and take immediate measures for release of stuck up masks.

  • Regulatory duty must be rationalized to curb smuggling: Karachi Chamber

    Regulatory duty must be rationalized to curb smuggling: Karachi Chamber

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has urged tax authorities to rationalize the regulatory duty on imported goods in order to curb smuggling.

    In its proposals for budget 2020/2021, the KCCI said that the regulatory duty was imposed in last fiscal year to rectify the balance of payment crisis.

    To some extent the regulatory duty on imported food items supported the food items produced locally but most of those items which are not produced locally due to climate and resources, have to be imported.

    High rates of RD on imported food items has sharply increased cost of import and consequently these items have been pushed into smuggling regime.

    “Rampant smuggling of these items is taking place with impunity making it impossible to import through documented channels.”

    The KCCI  Major loss of revenue to exchequer because smuggling mafia makes everything available without paying any taxes and duties.

    Imposition of regulatory duty is the main cause that such commonly used items like dry-fruits, nutrition, honey, grains, pulses and spices are being imported through illegal channels which is causing significant damage to the economy of the country.

    The KCCI suggested that regulatory duties should be rationalized and in some cases withdrawn to curtail smuggling and help to increase in revenues, documentation of trade and support the exports as many of the imported items are industrial raw materials which are re-exported to generate foreign exchange for Pakistan.

  • KCCI wants end lockdown, deploy army for SOP enforcement

    KCCI wants end lockdown, deploy army for SOP enforcement

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday urged the government to lift lockdown completely and allow all type of businesses to restart their activities.

    Siraj Kassam Teli, Chairman Businessmen Group (BMG) and former KCCI president in a statement also advised the government to deploy troops from the army whose presence and patrolling at various commercial markets would ensure strict adherence to the Standard Operating Procedures (SOPs) devised to contain further spread of coronavirus pandemic.

    Teli said that Pakistan’s economy was already in deep crises and the country cannot afford further damages hence, it was really critical to restart all businesses with normal timings and get back to routine life in presence of the virus.

    “On one hand, we have to contain coronavirus pandemic but on the other, we also have to save the already ailing economy therefore, the patriotic and disciplined troops from armed forces must be given the task to ensure across the board implementation of SOPs, which has to be done on top priority in order to save the economy from plunging into further crises,” he said, adding that reopening of businesses under army’s supervision would help in protecting the businesses from complete collapse and save the masses from unemployment, poverty and starvation.

    Chairman BMG, while referring to numerous measures adopted by the Federal and Provincial governments since the imposition of lockdown from March 23, said that the federal government and all provincial governments strived really hard to deal with COVID-19 pandemic and they all deserve to be appreciated but unfortunately, the number of people affected by coronavirus continues to rise all over the country as the public and also the members of the business community have been largely ignoring the SOPs due to lack of discipline.

    “Pakistan army is well-known for its discipline all around the world hence, it is high time that the army must come forward to rescue the country, teach discipline to the masses and get the SOPs enforced all the time which is the only way to save our beloved motherland from further disaster,” he added.

    He stressed that the coronavirus pandemic is not going anywhere and we have to live with it and continue our businesses in a disciplined manner.

    “We cannot live in the lockdown forever so we have to exhibit the Discipline which is the first step on the road to success.”

    He cautioned that if the lockdown is not suspended immediately, many businesses, which remain completely suspended since last more than two months, would shut down forever that would lead to creating a chaotic situation as the people would find no other option but to come out on streets to protest due to rising unemployment and poverty.

  • Manufacturers demand domestic supplies against FE should be treated as exports

    Manufacturers demand domestic supplies against FE should be treated as exports

    KARACHI: Manufacturers have urged the government to treat goods booked abroad on which foreign exchange (FE) has been transferred should be treated as export.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021, said that some manufacturers (like Dawlance etc.) are demanding that overseas Pakistanis may be allowed to send foreign exchange to manufacturers through banking channel for delivery of goods to their blood relations / relatives in Pakistan, which may be treated as export.

    Some stores outside Pakistan have contacted the manufacturers for delivery of goods in Pakistan. These stores in foreign countries will make consolidated payment in FE through banking channel to manufacturers in Pakistan.

    They have requested the manufacturers in Pakistan to send samples for booking of orders. The issue is that after payment of duty and taxes the goods made in

    Pakistan become more expensive.

    The Pakistanis expatriates abroad then prefers to purchase smuggled goods from the open market or send goods in baggage (better quality and less cost) declaring it as old and used goods after removing its packing etc.

    Store owners abroad have shown keen interest in booking Pakistani manufactured goods to be delivered in Pakistan.

    “It is, therefore, proposed that such goods, where orders are booked from abroad and foreign exchange is sent in Pakistan through banking channels, may be treated as exported goods and may be exempted from local duty and taxes or partial exemption may be given in the form of fixed duty drawback / rebate of tax to be notified.”

  • Sindh urged to bring down sales tax rate at 10 percent

    Sindh urged to bring down sales tax rate at 10 percent

    KARACHI: Sindh Revenue Board (SRB) has been suggested to bring down sales tax on services rate to 10 percent from existing 13 percent to encourage registration of more taxpayers.

    Overseas Investors Chambers of Commerce and Industry (OICCI) in its budget proposals 2020/2021 submitted to the SRB, said that the expectations of the investors that the SRB will continue the reduction of Sales Tax rate on services to 13 percent, as done in fiscal year 2016-17, remained unrealized.

    “Although, investors appreciate that the Sales Tax rate in Sindh province at 13 percent is the lowest in the country, it remains higher than comparative regional tax rates.”

    The OICCI suggested that to keep in-line with the regional developing countries, reduction in sales tax on services should be made by 1 percent in the Sindh Finance Act 2020-2021 and gradually reduced to 10 percent over the next three years for registered entities, whilst the current rate should be maintained for unregistered entities.

    This will encourage registration to avail the benefits of input adjustment.

    The OICCI also suggested that the option to opt for the basic rate or normal regime should be given to all the service providers who fall under the reduced/fixed rate regime.

    This option will reduce the cost of doing business for recipient of services as lower tax is not available for input tax adjustment, the OICCI added.

  • Japan eases inspection for Pakistani mangoes

    Japan eases inspection for Pakistani mangoes

    ISLAMABAD: The Japanese government has eased inspection regime on import of mangoes from Pakistan, a statement said on Friday.

    The Japanese Ministry of Agriculture, Forestry & Fisheries eased inspection regime for mangoes from Pakistan.

    The Japanese ministry also lifted ban on import of animal casing from Pakistan with effect from May 21, 2020.

    The authorization has been issued by Japan’s Chief Veterinary Officer Kiyoyasu Ishi Kawa, says a press release received from Tokyo.

    Pakistan had been exporting animal casings to Japan since 1985 but the Animal Health Division at the Japanese Ministry of Agriculture, Forestry & Fisheries (MAFF) restricted import of animal casing from Pakistan to Japan in 2017 due to enhanced Animal Health Requirements (AHRs) related to disinfecting measures.

    This resulted in a complete ban on import of animal casings from Pakistan. The leading exporter of animal casing from Pakistan to Japan M/s United Casing Corporation, Lahore immediately improved their processing unit according to the new Japanese standardsfollowed by inspection of the facilities by a team of Japanese experts from MAFF in November 2017.

    However, the matter kept pending for over two years since the visit of Japanese professional delegation to Pakistan.

    According to Tahir Habib Cheema, Trade & Investment Officer at the Embassy of Pakistan in Tokyo, the Japanese Animal Health Division was re-engaged in January this year to resolve the matter by involving stakeholders from both sides.

    Satisfying all queries of Japanese authorities, the negotiations were successfully concluded in March, 2020 followed by a thorough exercise on drafting certificate templates.

    Efficiently achieving another milestone, Cheema has shared that MAFF has finally allowed import of animal casing from Pakistan with effect from May 21, 2020 while designating United Casing’s unit in Lahore as one of the Designated Salted Casing Facilities according to the Animal Health Requirements for salted natural casings to be exported to Japan from Pakistan.

    Trade between Pakistan and Japan has always been stagnant both in volume and variety; however, the Trade & Investment Section at the Embassy of Pakistan in Tokyo has been making significant efforts not only to develop new market in Japan for Pakistani products but also in reviving export of conventional products that faced restrictions due to various standardization requirements.

    At a time when global trade is facing a lot of challenges and countries like Pakistan are projecting dip in exports, such a news stimulating positive energy can be of great help in sustaining trade and economy, keeping the hope alive.

  • FPCCI demands elimination of discretionary powers of tax officials

    FPCCI demands elimination of discretionary powers of tax officials

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded withdrawal of discretionary powers of tax officials including multiple selection of audit and entering business premises.

    Mian Anjum Nisar, President and Zakaria Usman, Convener, Budget Advisory Council of the FPCCI urged the FBR to withdraw the discretionary powers vested with the tax officials to avoid their misuse, provide relief to the taxpayers, simplify taxation law and restore the diminishing confidence of the assessees in the taxation laws – a pre-requisite for success of any scheme.

    The proposal is made as a part of the FPCCI presentation being made to the concerned quarters including Dr. Hafeez Shaikh, Advisor to the PM on Finance and Revenue, Razak Dawood, Adviser to PM for Commerce, Textile and Investment and Nausheen Javaid Amjad, Chairperson, FBR for incorporation in the forthcoming Federal Budget 2020-2021.

    He added that the FPCCI after identifying a series of such provisions vesting discretionary powers had given concrete proposals to safeguard the interest of the taxpayers against the misuse of discretionary powers.

    Regarding discretionary powers of conducting Multiple Audits / Amendment of Assessment under Sections 177, 214C and 122of Income Tax Ordinance, they elaborated, “Although a return filed, U/S 114 of ITO 2001, within time limit does qualify for Universal Self-Assessment Scheme (USAS) and considered to be Assessment Order deemed to have been passed U/S 120(1) of the Ordinance on the date of filing the return, but even then it may be amended as many times as may be necessary by the Inland Revenue officials within 5 years from the end of the financial year in which the return is filed which results in multiple tax assessments”.

    They therefore, proposed that the power to select the return of income may rest only with the FBR who is already having the powers to select the audit cases randomly through Computer U/S 214C of the Ordinance.

    However, they added, “In case where definite evidence is available with the department then the audit be initiated upto the transaction in question only”.

    These discretionary powers provide sufficient incentives to the Inland Revenue Officials to serve Audit Notices to the commercial importers and other such assessees who have already discharged their tax liability as full and final at the time of clearance of goods at customs stage and as such promote direct contact between a taxpayer and tax officials which is against the government policy as it encourage tax evasion and corruption.

    The FPCCI Chief Mian Anjum Nisar also lamented posting of Inland Revenue Officer at Business Premises under Section 40B of Sales Tax Act, 1990 to monitor production, sales of goods, stock position etc as it is out dated and unnecessary in the modern era of computerization and available methods of monitoring the entire production and supply chain.

    He argued, “It gives a perception of anti-business and anti-investment government policies, creates harassment and tantamount to revival of supervise clearance scheme of Central Excise in Sales Tax Act, 1990”.

  • Pakistan Business Council urges Sindh to reopen industries

    Pakistan Business Council urges Sindh to reopen industries

    KARACHI: Pakistan Business Council (PBC) has urged Sindh government to allow industries to reopen with surety of safety compliance to prevent coronavirus.

    In a letter to Sindh Chief Minister on Wednesday, PBC appreciated the proactive steps taken by your government to contain the spread of the Covid-19.

    No doubt countless lives have been saved. We also record our appreciation of the phased and safety driven manner in which your government has allowed economic activity to resume.

    Many of our members in food, pharmaceutical, iron and steel and export sectors in Sindh have demonstrated a heightened sense of responsibility to safe-work practices.

    There are anomalies between the sectors allowed to reopen by various provinces. These are working to the detriment of those with manufacturing facilities in Sindh.

    As a result, the Sindh based units are losing revenue and market share, whilst continuing to pay employees and incur fixed costs.

    A case in point is electronic appliance manufacturers which have been allowed to reopen in Punjab, whilst those in Sindh are still locked down.

    PBC advised the Sindh government to allow industries other than steel, cement and apparel to resume operations, conditional of course to compliance with the SOPs prescribed.

    Prolonged shutdown carries the risk of permanent closure of some undertakings and the consequent loss of jobs and revenue to the Government of Sindh.

    The Pakistan Business Council (PBC) is a private sector business policy advocacy forum composed of the largest businesses including multinationals operating in Pakistan.

    Its members contribute nearly 25 percent of the national tax revenue, generate 40 percent of annual exports and contribute every 9th rupee to Pakistan’s GDP.

    Members operate in nearly all sectors of the formal economy and many have a strong presence in Sindh.

  • Textile exporters demand extension in filing duty drawback claim

    Textile exporters demand extension in filing duty drawback claim

    KARACHI: Textile exporters have demanded the commerce ministry of allowing extension in filing claims for duty drawback up to July 31, 2020.

    Pakistan Hosiery Manufacturers Association (PHMA) in a statement on Tuesday said that the commerce ministry should consider extension in cut-off date of submission of incremental claims of Duty Drawback on Taxes (DDT) for the year 2018-2019 from May 31, 2020 to July 31, 2020.

    This will facilitate and enable textile exporters to submit their claims at convenience without hassle, in view of global business slowdown, lockdown amid COVID19 and reduced working hours for the last almost two months.

    Likewise, in current scenario and unprecedented set of challenges being confronting to the textile industry, the government should also consider and facilitate textile exporters by allowing them to submit remaining 50 percent incremental duty drawback of taxes claims under Duty Drawback Order 2018-21 on achievement of 10 percent increase during financial year 2019-2020 on the basis of nine months’ performance as export production remained standstill and suffered during a whole quarter due to lockdown amid corona pandemic.

    This imperative and favorable move by the government will facilitate textile exporters and it will boost their confidence to achieve extra mile beyond in enhancement of exports in succeeding years.

    In his letter to Abdul Razak Dawood, Advisor to Prime Minister on Commerce, Textile & Investment, Chaudhry Salamat Ali, Central Chairman PHMA has drawn his attention towards Ministry’s Notification No. 1(42-B)TID/18-TR-II dated 3rd August 2018 for Duty Drawback of Taxes Order 2018-2021 according to which the Government provided extension in Prime Minister’s Package of Incentives for Exporters in order to provide drawback of taxes collected from textile exporters.

    Duty Drawbacks on Taxes (DDT) under the Order shall be allowed for shipment made from 1st July 2018 to 30th June 2021 while the cut-off date for filing of claims for exports in each financial year shall be 31st July May of the subsequent year.

    Salamat Ali apprised that several member exporters approached informing that they have been facing inconvenience, amid economic slowdown and lockdown due to COVID19, to process and complete the procedural requirements as per Duty Drawback of Taxes Order 2018-2021 to submit their DDT incremental claims for the year 2018-2019 at Banks/Authorized dealers by cut-off date 31st May 2020 which is approaching very fast.

    Due to COVID19 textile industry of Pakistan was affected and remained totally closed for a period of around 50 days and industries resumed operations/ productions after special permission from the Government. Country has faced a complete lockdown situation from 23rd March 2020.

    In such a scenario, banks as well as SBP are open with reduced working hours and limited number of staff which has been causing delays. Last year the Ministry had also extended the cut-off date to 31st May 2019 to 31st July 2019, consequently, in view of current scenario, date of submission of DDT claims for year 2018-2019 must be extended from 31st May 2020 to 31st July 2020 with necessary advice to State Bank of Pakistan, accordingly.

    Salamat Ali added that economic slowdown in the wake of COVID19 has brought detrimental effects on the textile industry and exports of Pakistan. The Textile Export Industry has faced colossal financial losses due to cancellation of orders, delayed payments against LCs, disputes as some buyers refused to collect the export shipments at destinations.

    The textile industry resumed operations after two months acquiring special permission, nonetheless, supply chain remained disruptive due to closure of allied industry which provides supplies and materials to smoothly run the wheels of textile export industries.