KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday demanded the government of reducing levy and taxes on petroleum products to support the trade and industry.
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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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OICCI expresses dismay over FBR action against mobile operator
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) on Thursday expressed its shock and dismay over action taken by the tax authorities against Pakistan’s leading mobile operator.
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FPCCI urges Ogra to revoke increase in gas price
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged Oil and Gas Regulatory Authority (OGRA) to revoke increase in gas tariff as the decision has serious repercussions on industrial sector.
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CNIC condition reduces transactions and revenue: FBR
KARACHI: Federal Board of Revenue (FBR) has admitted that the condition of Computerized National Identity Card (CNIC) reduced number transactions as well as shortfall in revenue.
“This [CNIC] condition has further reduced transaction and our revenue,” Dr, Muhammad Ashfaq Ahmed, Member, Inland Revenue, Federal Board of Revenue (FBR) quoted as saying in a statement issued by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) issued on Tuesday.
The statement further quoted the Member that the FBR so far has resolved CNIC issues with the retailers and conditions will remain applicable at some stages.
While responding to the issues raised by President FPCCI, the Member said that taxation is a by-product of business which is missing in our strategy, refunds are considered as oxygen for trade and industry while in practice to show revenue we ignored to payback refunds.
The FBR is now following open door policy to facilitate industry and transparency is first in our strategy.
He further said that FBR is changing its approach to deal with commercial exporters. He further agreed to extend the days of filing form H from 120 to 180 days.
However, with the automation of FBR the trade and industry have to gear-up and be compatible with the latest technology.
Earlier, FPCCI President Mian Anjum Nisar appreciated the efforts of Federal Board of Revenue on achieving revenue targets despite difficult circumstances under COVID-19 pandemic.
While welcoming the Member Inland Revenue (Operation) Dr. Muhammad Ashfaq Ahmed, the President FPCCI said that the release of refunds has slightly improved but industry paid taxes and salaries during the period when labour was idle and industries were stalled.
He mentioned that irrespective of gain or loss businesses have to pay 1.5 percent tax despite the issue has been discussed with Advisor to PM and Chairperson FBR but matter still not resolved.
It was also informed that FASTER will release refunds within 72 hours but practically refunds are being released within 72 hours.
Further President FPCCI strongly suggested extending the filing of Form “H” period from 120 days to 180 days, and demanded a focal person to deal with affairs relevant to FASTER.
He also raised a question on shifting of final tax regime to minimum tax and proposed to reversed if there is no conditionality and payback refunds or ask for amount if due and vice versa, he also proposed to NTC deal issue of raw material that were previously falls under 12th schedule and demanded restoration of SRO 1125.
Mian Anjum Nisar President FPCCI also raised the issue of Audit at different tiers and proposed that stages/tiers level of audit should be minimized.
CNIC still has not resolved despite available agreement between businesses and government. President FPCCI also raised issues of different sectors such inclusion of Edible Offal in the definition of Agriculture, inability of FATER system for processing of Multi-tax period carry-forward based sales tax refunds. Uniform rate of tax on Iron and Steel flat products and issue of Audit being faced by trade and industry.
Meeting was attended by representative of various chambers and association, Kurram Ijaz, Vice President, Zakaria Usma, Shaukat Ahmed, Ghani Usman, Saqib Fayyas, Shabir Mensha, Khursheed, member FPCCI Advisory Committee, Khuram Saeed, former Vice President FPCCI, EC and General Body members.
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Karachi Chamber rejects power tariff hike; demands immediate withdrawal
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has strongly rejected the power tariff hike by K-Electric and demanded the government of immediate withdrawal the relevant notification.
In a statement issued on Tuesday, KCCI President Shariq Vohra said that the anti-business move would give a serious blow to the trade & industry which was still struggling really hard to recover from the disaster caused by the lockdown for six months imposed to contain Covid-19 pandemic.
Power Division through a notification allowed K-Electric (KE) to increase rates of electricity ranging from Rs.1.09 to Rs.2.89 per unit with effect from September 1, 2020, stated that this anti-business
While rejecting outright the federal government’s decision to increase KE’s tariff, Shariq Vohra said Karachiites are already suffering badly due to unbridled inflation hence the hike in KE’s electricity bills was unacceptable and must be withdrawn immediately.
“Although the lawmakers are assuring that Prime Minister Imran Khan and his government were striving to control inflation by making earnest efforts but it is really unfortunate that they have given go ahead to KE for raising its tariff which would not only intensify the hardships for business community due to high cost of doing business but would also terribly affect the poor masses who are already overburden due to inflation while KE’s tariff hike would further worsen the situation”, he added.
“Indeed it is a huge disappointment that the Federal Government, instead of providing relief to the already burdened citizens of Karachi during the ongoing difficult times, continues to take anti-business and anti-Karachi actions. It is well known fact that the economic hub of Pakistan is passing through worst possible crisis and suffering badly due to crumbling infrastructure, electricity load shedding, gas and water shortages etc. For God’s sake, please have mercy on poor citizens and the anxious business & industrial community of Karachi which is battling for survival”, he stressed.
Shariq Vohra pointed out that on one hand, the government has been pushing the business & industrial community to enhance their productivity and exports so that more wealth and employment opportunities could be generated in order to improve the ailing economy but how is it going to be possible when on the other hand, they give go ahead to electricity tariff hike which by all means is an anti-business and anti-people move.
The cost of utilities in Pakistan are much higher as compared to regional countries, making our products uncompetitive in the international markets.
“The economy and businesses would only flourish when the cost of doing business is brought down by substantially reducing the electricity, gas and water tariffs while all other exorbitant taxes and duties must also be reduced and the government will have to particularly make all-out efforts to rebuilt Karachi’s dilapidated infrastructure which has been the top most reason behind the poor industrial performance of all the industries situated in seven industrial zones of Karachi.”
“The decision makers will have to understand that if the cost of input rises, it would lead to poor performance and reduced output of the industry, resulting in lower revenue collection, shrinking employment opportunities and making the production uncompetitive in the domestic as well as international markets”, he added.
He mentioned that the Karachi Chamber has been strongly opposing this particular increase in K-Electric Tariff and urged the authorities through media statements issued on July 10, 2020 and September 3, 2020 to refrain from raising KE’s tariff. Although the increase was postponed at that time but it has once again been imposed in an odd situation when the businesses are desperately questing hard for survival.
He hoped that keeping in view all the above mentioned facts, the government would review KE’s electricity hike notification and immediately withdraw the same which would certainly be highly appreciated not only by the business & industrial community but also by people belonging to all walks of life.
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Karachi Chamber resents FBR’s decision to install surveillance cameras
The Karachi Chamber of Commerce and Industry (KCCI) has expressed strong discontent over the recent decision by Federal Board of Revenue (FBR) to monitor production activities through cameras directly connected to the main tax database.
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FPCCI demands extending refinance scheme for three months to support employment
KARACHI: The business community has demanded the State Bank of Pakistan (SBP) of extending refinance scheme, which was introduced to prevent layoff owing to coronavirus outbreak, for further three months.
The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) in a statement on Tuesday urged the central bank to consider extension in refinance scheme to support employees and prevent layoff of workers due outbreak of coronavirus, by December 31, 2020.
Mian Anjum Nisar, President FPCCI while appreciating the initiative of SBP for introducing Refinance Scheme, which had helped many industrial and service oriented sectors to retain employees during Corona pandemic, stated that since the companies that availed this credit facility through banks have not been recovered from devastating economic impact of covid-19, it would be advisable if Ministry of Finance keep shouldering with SBP and extend this Scheme till end of the year.
“In many of the countries, the second wave of Corona Virus has already started, Pakistan not being the case of exception, should be prepared to take proactive precautionary in view of increase in corona patients from 4500 in August to more than 1000 in September.
“Therefore, discontinuation of this facility on September 30, 2020, would not serve the purposes,” added President FPCCI.
Nisar further added that before discontinuing credit facility on concessional markup rate, Ministry of Finance and SBP need to review the prevailing economic situation closely as such the small and medium sized businesses have not been able to regain pre-corona economic stability. Further, processing of documentation and furnishing of employees’ data to avail credit facility was also a time consuming activity.
Therefore, withdrawal of this facility at this stage would neither be in the interest of private sector nor in the interest of the Government that aimed at controlling unemployment situation in the country.
Under the SBP’s Refinance Scheme to Support Employment and Prevent Layoff of Workers due to the impact of COVID-19, businesses that commit to not lay off workers in the next three months can avail credit through banks for the three months of wages and salaries expenses at a concessional markup rate.
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CCP raids cement manufacturers association for possible cartelization
ISLAMABAD: The Competition Commission of Pakistan (CCP) on Thursday raided the central office of All Pakistan Cement Manufacturers Association (APCMA) and seized suspicious record.
In a statement the CCP said that as part of an enquiry launched in May 2020 to investigate the possible anti-competitive activities by the cement manufacturers, carried out a search and inspection of the APCMA in Lahore on Thursday.
It said that two different teams entered and searched the APCMA main office and a member of APCMA. “Since a senior employee of one of major cement company is also the office bearer of the APCMA’s Executive Committee, representing the north region, therefore, the commission also conducted search and inspection of the premises of member concern with the objective to gather evidence of any collusive arrangement for the purposes of the Act,” it added.
The CCP said that the enquiry was started based on the information gathered through various media reports, and concerns and complaints expressed regarding a concurrent increase in cement prices, particularly during the month of April 2020.
The reports indicating that an increase of Rs45 – Rs55 per cement bag was apparently decided in a meeting of the cement manufacturers held under the umbrella of APCMA. Some of the media reports also quoted cement dealers saying that the leading cement companies in the north region had collectively decided to increase the cement prices by Rs55 per bag.
From the analysis done by the CCP’s enquiry officers to see the cement companies’ profitability trend, it transpired that due to the lower demand of cement in the first quarter of 2020, the companies had to undergo financial losses at variance, however, the increase in price was starkly parallel, raising concerns of collective decision making and price fixing by the cement manufacturers.
“Some of the players of the construction industry also hinted upon the cement cartel in the North Region becoming active following price increase trend in northern region.”
The official data available with the CCP indicated the cement price increase of 4 percent in Islamabad, 10 percent in Lahore, and 6 percent in Peshawar from the second week of April 2020.
From analysis of the information obtained from the news reports, price trends and facts gathered pertaining the same, it appears that objective basis, if any, needed to be assessed and / or the correlation between increase in the price of cement and grounds presented by the representatives of cement industry.
Sudden rise in price by the cement manufacturers at the time when there is low demand compared to the installed capacity of the manufacturers at a time when there is low demand compared to the installed capacity of manufacturers and considering the input fuel cost (coal and oil), transportation and interest rate have declined raises suspicion of a collective rise in price by cement companies.
It may be noted that the production capacity of cement sector has increased from 44 million tons in 2014 to 69 million tons in 2020. The losses incurred by the cement sector and increase in the price of cement in a similar time period raises suspicion of collective decision of the cement companies to recover losses incurred due unutilized installed capacities.
The CCP said that the cement sector has history of collusive activities and they have been penalized in the past to an amount of collectively more than Rs6.3 billion on account of involvement in the prohibited agreement in violation of Section 04 of the Act.
In 2012 the commission again initiated enquiry against cement companies, however, the same could not be proceeded further due to stay order granted to cement companies by the Lahore High Court.
The CCP said that the latest search had been carried out to gather the evidence of possible communication, arrangement, agreement, or understanding between the cement producers pertaining to the violation of the provisions of the Competition Act, 2010.
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Boycott against foodpanda expands to major cities
KARACHI: Restaurant owners of major cities of the country have joined boycott against foodpanda as food delivery company failed to negotiate, a statement said on Wednesday.
The All Pakistan Restaurant Association (APRA), after successful boycott in Karachi of foodpanda, has now started protest in Punjab province and restaurants owners of Lahore, Islamabad and other cities, have joined the protest, the statement said.
APRA chairman, Muhammad Naeem Siddiqui pointed out that foodpanda has started putting more pressure on restaurants after boycotting its services and threatened that it would not deliver the food if 30 percent commission was not paid.
“APRA has strongly protested the imposition of a 30 percent self-imposed commission on restaurants, calling it against the rules of the Competition Commission of Pakistan and the CCP is asked to play its role in ending the food panda monopoly and malpractices so that all food delivery companies have equal business opportunities”, he said.
Chairman APRA, after consultation with the Islamabad Restaurant Association (IRA), Lahore Restaurant Association (LRA) and Lahore Restaurant Unity Association, subjected to certain conditions for the restoration of foodpanda’s services.
The conditions are:
Restaurants should be allowed to deliver foodpanda orders directly through their own riders.
There should be standardized commission structure for all brands.
Customer data should be shared with restaurants.
Restaurants should not be threatened with commission increases, otherwise they will be closed.
Exclusive agreement should not be signed with any restaurant as it’s against competition laws.
Chairman APRA warned, if their demands will not meet, they will continue foodpanda boycott.
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Karachi Chamber disagrees with FBR tax collection analysis
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has expressed disagreement with the analysis released by the Federal Board of Revenue (FBR) regarding tax collection by cities and markets.
Agha Shahab Ahmed Khan President KCCI in a statement on Tuesday expressed total mistrust over the statistical figures recently disclosed by the FBR in its Tax Directory Analysis 2018.
He said that FBR recently released an analysis of Tax Directory 2018 based on income tax, in which it made some claims which were based on partial information creating a wrong perception about the income tax collection from different cities while some important information was skipped by which a reader could have verified the data.
President KCCI noted that under this report, Karachi’s income tax collection was reported to be Rs209 billion while district-wise it revealed that Karachi contributed Rs186.3 billion (Karachi Central added Rs9.06 billion; Karachi East: Rs34.09 billion; Karachi South: Rs114.23 billion, and Karachi West contributed Rs28.89 billion) which clearly indicates a discrepancy of Rs23 billion. It was unclear whether Karachi’s share was Rs209 billion in total or the district wise collection was to be added to it.
“This mismatch in income tax collection figures has raised serious doubts amongst business circles who are terming it as yet another conspiracy against Karachi.”
Likewise, he pointed out that the province-wise share was only revealed in percentage terms and the total value was not disclosed anywhere in the document to authenticate the claims.
Even while disclosing the income tax collection from major markets, many important markets including the DHA’s Gold Mark & Khadda Market and other important markets of Malir, Korangi, Banaras and Bahria Town etc. were not included in the data which gave a wrong impression that the tax collection from Karachi is low in comparison of other cities.
President KCCI further stated that the selected market data of the cities constituted just 25.7 percent (413,859 filers out of 1,606,424 non-salaried individuals and AOP filers), making it an incorrect estimate of the size and share of any city. President KCCI added that the data analysis given by FBR is just a number game and it is an attempt to undermine the share of Karachi.
According to the said document, the income tax collection of Rs209 billion from Karachi is very close to Rs204 billion collection from Islamabad which is impossible keeping in view the size, population and the immense industrial & economic activities in Karachi.
“We totally disagree to FBR’s analysis as Karachi is a port city where most of the Head Offices of multinational companies, banks, DFIs and insurance companies etc. are based while the highest number of institutions, hundreds of commercial markets, shopping malls and plazas etc. are also present in this city, making it the country’s leading industrial and commercial hub.
How could Islamabad with a population of just 1 million and negligible industrial activity compete with Karachi which holds a whopping population of around 20 million that makes it one of the largest cities of the world with seven industrial zones hosting thousands of industrial units?
He said: “Such pitiful attempts had been made in the past as well which were widely protested and completely rejected by KCCI and it has been proven from time to time that Karachi contributes the highest revenue of around 65 percent revenue to the national exchequer which has also admitted by the decision makers like Federal Minister Asad Umer and many others.
Karachi has always been the leading contributor of revenue to the national exchequer, hence we fear that FBR’s figures have been finalized cunningly through statistical juggling and it is a conspiracy to tone down the significance of Karachi which will not be accepted and widely protested at all available platforms”, Agha Shahab warned.
He requested Prime Minister Imran Khan and his entire team of economic experts to look into this serious matter and grill the FBR for releasing such an irresponsible analysis, besides directing the revenue collection authority to immediately withdraw the fabricated analysis and issue a revised version which must carry comprehensive and accurate fact and figures about Karachi.