KARACHI: Business community has welcomed the relief package of around Rs1.2 trillion announced by Prime Minister Imran Khan to ward off the negative impact of coronavirus.
(more…)Category: Trade & Industry
This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.
-
Karachi Chamber announces shut down amid coronavirus spread
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has announced shut down its offices for a week due to outbreak of coronavirus and rising number of infected persons in Karachi.
Keeping in view the outbreak of coronavirus and rising number of cases in Karachi, Chairman Businessmen Group Siraj Kassam Teli, Office Bearers and Managing Committee members of the Karachi Chamber of Commerce and Industry (KCCI) have decided to shut down KCCI for one week hence all departments of the Chamber will remain closed from March 24th to March 29th as a precautionary measure to save the public and staff from the life-threatening disease caused by coronavirus.
KCCI will reopen on March 30th, 2020, Monday, with normal office timings, said a press release issued here on Saturday.
-
KCCI for more stringent measures to fight coronavirus epidemic
The Karachi Chamber of Commerce and Industry (KCCI) has called upon the government to implement stricter measures in the battle against the coronavirus epidemic. Agha Shahab Ahmed Khan, President of KCCI, emphasized the need for enhanced efforts to combat the threat posed by COVID-19, urging both the government and the public to remain vigilant and proactive in containing the spread of the virus.
(more…) -
FPCCI calls for strategy to save national economy amid global meltdown on coronavirus epidemic
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has urged the government to outline strategy to save national economy in the wake of global meltdown on coronavirus epidemic.
FPCCI president Mian Anjum Nisar in a statement on Saturday urged the government to take preventive measures and develop strategy to protect the pace of economic and trade progress of Pakistan from likely impacts of world economic slowdown apprehended by leading think tanks due to the recent global spread of the novel coronavirus.
Globally, more than 145,682 people have been diagnosed with coronavirus. The death toll above 5436, in China death toll 3173, South Korea, mass testing has turned up over 6,000 cases and more than 60 deaths.
Italy has confirmed more than 17660 cases, along with more than 1200 deaths. Iran has announced 514 deaths and 11364 cases. The United States confirmed 41 deaths from the outbreak, along with more than 1264 confirmed cases.
Mian Anjum Nisar said that in order to safe national economic system from the impacts of slowdown of world economy due to coronavirus and other global economic challenges government should announce economic relief package to protect trade and industry of the country. He informed that the Europe is now the “epicentre” of the global coronavirus pandemic.
The Europe Union (EU) is the second biggest trading partner of Pakistan where around 20 percent of Pakistani exports have duty-free access to the Europe, while 70 percent avails preferential treatment.
FPCCI under the current scenario has organized a consultative session seeking feeding back from the stake holders on likely impact of this coronavirus on Pakistan’s foreign trade.
The session was attended by Dy. Governor SBP Dr. Murtaza Syed, Dr. S.M. Qaiser Sajjad Secretary General, Dr. Samreen Sarfarz Pakistan Medical Association, Dr. Adil H. Haider Dean Aga Khan Medical University, Dr. Ijaz, health department of Sindh Government, Aga Fakhar Hussain Additional Secretary Industry & Commerce Sindh, Dr. Saeed SINA Welfare Trust, Prof. Dr. Zarna Wahid, Dow University of Health Sciences, Pakistan National Shipping Corportation and KPT. The session was chaired by Sheikh Sultan Rehman Vice President FPCCI.
The chief of the apex trade body also informed that the US Congress has voted for a US $ 50 billion emergency funding package to fight the coronavirus. Several central banks around the world, including the U.S. Federal Reserve, have lowered interest rates to support their economies amid the coronavirus outbreak. Lowering interest rates make borrowing costs cheaper and could encourage business to take loans and spend which will in turn stimulate the economy. He further stated that the IMF is making available US $ 50 billion in emergency funding to help poor and middle-income countries.
Mian Anjum Nisar President FPCCI emphasized that as the inflationary trend shows declining that support to reduce interest rates while on the other hand to boost and safe economic activity all segment of economy needs to be supported and facilitated to contribute in economic growth.
Other- wise we will again face economic crises, lower industrial growth and shifting of industrial units in sick industry. Government should also reduce the cost of doing business and encourage the domestic & foreign investors to make investment in country at this critical time when the global economy is shrinking.
-
Central banks lowering rates in response to coronavirus threat
KARACHI: Central banks of the world are responding to negative impact of coronavirus impact and they are reducing interest rate, said a top official of the State Bank of Pakistan (SBP).
Syed Murtuza, Deputy Governor, SBP while addressing at a seminar on impact of coronavirus on economy organized by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday.
The deputy governor said that due to deterioration in economy the central banks of many countries had reduced interest rates. He said that after Federal Reserve of the US the central banks of UK, Canada and Australia had also brought down the discount rates.
Murtuza Sayed said that the spread of coronavirus disease (COVID-19) was different with every changing day.
The cases in China are now on decline and situation is improving.
He hoped that the bad situation would be improved by May this year. However, this epidemic may cause difficult economic situation for at least one quarter, he added.
He said that according to the IMF the coronavirus would cause decline in world economic growth in 2020.
He said that there was opportunity for Pakistan to improve exports in this situation. However, he said that Pakistan economy may have repercussions of world economic slowdown.
-
Engro Polymer stops production activities on SEPA notice
KARACHI: The production activities have been stopped at plant of Engro Polymer and Chemicals located at Port Muhammad Bin Qasim, said a statement on Monday.
The production activities have been stopped after Sindh Environment Protection Agency (SEPA) took notice of gas leakage incident at the plant.
The company in a notification informed the stock market: “In relation to isolated incident reported to Pakistan Stock Exchange on March 06, 2020, Engro Polymer and Chemicals Limited (ECPL) has received a notice under Section 21(2) of Sindh Environment Protection Act, 2014 from the Enviornmental Protection Agency Government of Sindh. The notice has directed EPCL to stop all production activities at the plant and fixed a hearing on March 10. In compliance with the notice, all production activities are on hold at the plant.”
Earlier on Friday March 6, 2020 the incident was reported at Engro Polymer and Chemcial.
In a statement the company said that it was gathering complete details related to the incident.“Based on initial reports, some people have been shifted to a nearby medical facility for treatment of vomiting/nausea condition,” it said.
The company’s staff is accompanying these people to ensure that they receive adequate medical treatment, it said. “No injuries or fatalities have been reported,” the company added.
It further said that specific areas of the plant have been taken offline as a precautionary measure, and the company will conduct a complete and thorough investigation into the incident and will keep the stock exchange informed with any material developments in the matter.
-
Dealers demand reviewing policy for used cars import
KARACHI: Car dealers have said that due to restrictions on import of used vehicles the business of car sales has suffered terribly and many showroom owners have shut down their businesses.
Chairman of Automotive Traders & Importers Association Karachi (ATIAK) Muhammad Kamran Khan and President ATIAK Ch. Aamir Ali Khan have requested the Karachi Chamber of Commerce & Industry (KCCI) to support the car dealers.
They said that due to severe curbs imposed on the imports of used cars particularly the amendment in the Import Policy Order 2016 in which clearance of cars through foreign exchange has been made mandatory, the car sale business has suffered terribly and dozens of car dealers in various localities have shut down their businesses.
They also sought help of the KCCI in getting their parking issue resolved as not a single vehicle belonging either to showroom owners or walk-in customers was being allowed to get parked outside any showroom which terribly affects their businesses.
Chairman ATIAK Muhammad Kamran Khan pointed out that the situation has created a lot of problems not only for the car dealers but also for many other allied businesses including the denting and painting workshops and mechanics etc., rendering thousands of people jobless.
Chairman ATIAK stated that the importers of used cars pay billions of rupees each other in shape of taxes and custom duties but the restrictions on imported cars have brought many businesses on the verge of complete collapse whereas the government was also losing billions of rupees being generated through custom duties and registration of imported vehicles.
“The entire strategy needs to be reviewed and relief has to be provided hence, KCCI, being the premier trade body, must come forward to help out and save car dealers”, he added.
Speaking at a meeting during the visit of ATIAK delegation to KCCI, Chairman and President ATIAK said that relocating showrooms outside Karachi was not a feasible option as not a single customer will come all the way out of city beyond Sohrab Goth to buy cars mainly due to security concerns hence, the relevant authorities will have to come up with some other feasible option in which relief has to be ensured for perturbed showroom owners.
Earlier President KCCI Agha Shahab Ahmed Khan, while welcoming the ATIAK delegation, said that under Businessmen Group’s policy of Public Service, the Karachi Chamber has not only been serving the entire business & industrial community without any discrimination but also all other citizens of Karachi who have been facing hardships and climb the Chamber’s stairs to seek assistance.
He assured the ATIAK delegation members of KCCI’s full support and cooperation so that numerous issues being faced by the car importers and dealers could be resolved as per aspiration of the stakeholders. “We are available for any kind of assistance 24/7 to the entire business and industrial community of Karachi without any discrimination of cast, creed, color or even size of the business”, he added.
Referring to concerns by ATIAK delegates over parking issue, Agha Shahab Ahmed assured that DIG Traffic will be invited so that the parking issue being faced by car dealers could be particularly discussed and resolved.
He was of the view that instead of imposing parking restrictions and creating other problems for showroom owners, the authorities should devise some kind of an effective strategy and come up with a permanent solution in consultation with all stakeholders as the car dealers also contribute billions of rupees every year to the national exchequer in shape of taxes and duties hence, they must get an enabling business environment in return.
Speaking on the occasion, Chairman KCCI’s Special Committee for Small Traders Majeed Memon advised the ATIAK delegates to maintain close liaison with Karachi Chamber, become members of numerous subcommittees and participate in subcommittees’ meetings in order to actively highlight and bring issues to KCCI’s notice so that the same could timely be taken up with relevant authorities and amicably resolved.
-
OICCI recommends price deregulation of petrol, diesel
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended front and back-end price deregulation of petrol and diesel for downstream oil refining and marketing sector.
For the Upstream oil and gas exploration sector, the OICCI recommended besides the estimated 30 onshore blocks that may be available for bidding, offshore blocks should also be considered and about 5-10 blocks should be offered every 3-6 months, so that there is a steady flow of new acreage to accelerate indigenous E&P activities.
Moreover, an Integrated Energy Planning (IEP) approach must be adopted and components of the Power Value Chain should be liberalized to bring operational efficiency and reduce energy costs.
The overseas investors’ chamber made these recommendations in its Energy Report 2019 launched on Wednesday.
The report is based on the recommendations of the 31 leading international energy sector companies operating in Pakistan, which are members of the chamber.
Pakistan’s energy sector has witnessed significant transformation over the past five years, with the power generation capacity increasing rapidly to over 39000 MW by mid-2019, with the inclusion of two large RLNG based power plants, Thar coal project and imported coal-based power plants leading to a major shift in the energy mix. Despite the relative fast paced increase in the generation and transmission capacity, over 60 million Pakistanis do not have access to electricity from the grid, which not only impacts the economic growth of the country, but the economic exclusion has a social impact also.
On top of this, the mounting circular debt, in excess of Rs 1.9 trillion, and the inability of distribution companies to arrest the ever increasing technical and non-technical losses, continue to burden the national exchequer by an additional Rs 40-50 billion annually.
Presenting the report, CE/Secretary General, OICCI, M. Abdul Aleem commented that “OICCI Energy Report 2019 includes a number of recommendations to streamline the Oil and Gas and Power sectors.
“The Ministry of Energy is playing a pivotal role in introducing structural reforms to address Pakistan’s prevalent energy issues. However, it is imperative that relevant stakeholders, such as the OICCI, are involved for these to be successful” commented M. Abdul Aleem adding that “OICCI is aware of the government’s plan to offer 18 onshore exploration blocks for bidding, approval for 5 LNG companies to set up regasification terminals at Port Qasim and initiative to develop an Integrated Energy Plan.”
OICCI Energy Report 2019 is the collective effort of the 31 OICCI members belonging to the energy sector, who are associates of leading international players working in the areas of oil exploration, refining, marketing and distribution, coal mining and power generation segments.
They cumulatively contribute over Rs 600 Billion annually to the national exchequer and employ a large number of skilled and professional staff.
Nearly 200 OICCI members contribute about a third of the country’s total tax collections, invested nearly US$ 3.0 billion last year in new investments and employ about one million people with a significantly larger contribution to the socio economic development of the community.
-
Exporters doubt refund payment release on FBR collection failure
KARACHI: Exporters expressed concerns that their liquidity may be taken away by the government in shape of sales tax worth billions of rupees as Federal Board of Revenue (FBR) has failed to achieve its revenue collection target.
Mian Anjum Nisar, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the exporters fear that their precious liquidity taken away by the government in shape of sales tax worth billions of rupees which is completely stuck up and refunds may be excessively delayed because the FBR has also failed to achieve its revenue collection target.
FPCCI chief held a comprehensive detailed meeting with the leading export oriented sector at PHMA House, Karachi with Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum and urged the Government to honour its commitment with the export sector.
The President, FPCCI said that the exporters are in real fixed and under stress as Government is not implementing the decision it has taken to support export oriented sector.
The Advisor to Prime Minister on Finance promised that the refunds will not get stuck up whereby he and his team have made a commitment that after passing of budget, his team will hold meetings with exporters and devise an automated system like in Bangladesh or China.
Through the automated system, exporters will get a major amount from bank or the State Bank and would not be dependent on the FBR. Advisor Finance promised that if the new refund system will not work, the govt. will revisit its decision in 3-6 month period. Since more than 8 months have been passed and the FBR FASTER system has failed for speedy refunds, therefore, the Govt. should honour their commitment and restore zero rating – No Payment No Refund Regime for the export sectors.
President FPCCI further told that the Govt. has failed to refund sales tax claims under FASTER System of textile exporters as per commitment, to refund claim amount in 72 hours, contrarily the Govt. has not paid exporters’ claims for the last seven months.
Approx. Rs100 billion of textile exporters liquidity held up under FASTER Refund System in last 8 months and total Rs210 billion are withheld with the government.
Payment timeline for payment of Customs Rebate claims which previously reduced to 7 months has again been prolonged to 13 months.
However, Government also committed that Customs Rebate, DLTL claims will also be paid electronically along with export proceeds.
Reportedly, hundreds of exporters SMEs have stopped their production owing to liquidity problems who have not received their sales tax refund claims for last seven months and due to high rates of utilities shall be compelled for closure if their sales tax refunds are not released on immediate basis and utility tariffs are not rationalized to facilitate them to get new orders and resume production.
The President FPCCI emphasized to implement power tariff of 7.5 cents/kwh including all charges across Pakistan including Karachi and RLNG at 6.5 dollars/MMBTU.
President also mentioned that while notification of said tariffs was issued the time period inadvertently was missing, it should be for three years period as agreed.
He further informed that the OGRA has separated zero rated industry from general industry for Gas Tariff while NEPRA is still not implementing the decisions of separate treatment for zero rated and general industry.
Mian Anjum Nisar President FPCCI said that the tariff for electricity and gas should be fixed on yearly basis for the Export Oriented Sectors and Priority be given only to these sector as the Export Sectors have to make commitments to their buyers for 6 months in advance and frequent increase in the electricity and gas tariffs jeopardizes their entire planning and they suffer huge losses to keep up commitments to their foreign buyers.
-
FPCCI demands immediate release of Rs250 billion tax refunds
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded the government to release Rs250 tax refunds of exporters without any further delay.
FPCCI President Mian Anjum Nisar urged the Prime Minister of Pakistan Imran Khan and Advisor to the Prime Minister on Finance to honour their commitment of disbursing sales tax refunds within 72 hours of submission of the claims.
He informed that according to the exporters’ associations of Pakistan the stuck-up refunds claims of sales tax, income tax and duty drawback of five export-oriented industrial sectors – Textile, Leather, Carpet, Sports Goods and Surgical Goods- have reached to the tune of around Rs.250 billion whereas the FBR has also acknowledged the amount as Rs.200 billion.
However, out of the total amount of Rs.250 billion, sales tax pending refunds are around Rs. 125 billion and the rest amount of over Rs. 120 billion is stuck-up on account of duty drawback on local taxes (DLTL) and customs rebates. Whereas only Rs.103 billion have been released so far.
President FPCCI said that the number of sales tax refunds cases have been considerably increased after imposition of 17 percent sales tax on domestic supply chain of five leading export-oriented sectors and the government has failed to refund sales tax claim amount under FASTER system within 72 hours, rather Government has not paid exporters’ claims for the last several months.
He apprehended that if the government does not realize the gravity of situation and exporter’s refunds are not released on war footing basis, the export sector will completely collapse leading to huge unemployment in the country.
Mian Anjum Nisar said that the export is largely a function of industrial production, whereas large scale industry registered a negative growth of 6.45 percent during the first four months of the fiscal year 2020-21, therefore, exports have also registered a meager 3.2 percent growth during the first half of the year. Pakistan’s exports are stuck-up around $ 23 billion range since last year.
He apprehended that FBR’s strict policy would completely hurt the value added export sectors and therefore, urged the government to take all necessary steps to release payments of pending refund claims to the exporters immediately and restore zero rating of sales tax that is no payment no refund regime.