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Category: Trade & Industry

Trade & Industry news covering business developments, industrial growth, manufacturing trends, and economic policies shaping domestic and global markets.

  • Karachi Chamber rejects few-day extension for filing sales tax return

    Karachi Chamber rejects few-day extension for filing sales tax return

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday rejected extension of few days for filing sales tax and federal excise returns and making payments.

    KCCI President Shariq Vohra, while referring to FBR’s Letter dated May 6, 2021, stated that the extension in dates of payment and submission of Sales Tax and Federal Excise Return for the Tax Period of April 2021 up to May 18, 2021 and May 21, 2021 respectively were not enough which have to extended to May 30, 2021 to facilitate taxpayers.

    In a letter sent to Chairman FBR Asim Ahmed, President KCCI pointed out that the nominal extension in such dates for filing Sales Tax and FED Return will create difficulties for taxpayers as it takes time to get back to routine after observing extended holidays of Eid-ul-Fitr which will be starting from 9th May 2021 to 16th May 2021.

    Hence, the business & industrial community may not be able to prepare and submit their Sales Tax and Federal Excise Return for the Month of April 2021 within the announced limited extension of just a few days.

    He opined that the overall situation was not favorable for trade and industries as everybody was facing severe liquidity crunch nowadays due to very limited business activities whereas it appears that the government has announced prolonged holidays with an intention to keep the entire population at homes so that the ongoing third spell of COVID-19 pandemic could be controlled.

    Keeping in view the overall situation, President KCCI requested FBR to extend the date of payment and submission of Sales Tax and Federal Excise Return for April 2021 up to May 30, 2021 in the larger interest of FBR and the Business Community while the relevant notification for extension may also be reissued which would be widely welcomed by the entire business and industrial community of the country.

  • FPCCI expresses concerns over approval to RLNG power plant

    FPCCI expresses concerns over approval to RLNG power plant

    KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday voiced strong concerns regarding the federal government’s approval of a 1263MW power plant to be run on imported RLNG. This plant, being developed by Punjab Thermal Power Ltd in Jhang, has sparked significant debate over its economic and environmental implications.

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  • FBR should be given separate tax targets for existing, new taxpayers

    FBR should be given separate tax targets for existing, new taxpayers

    KARACHI: Separate targets should be set for the Federal Board of Revenue (FBR) from existing and new taxpayers, this was recommended Pakistan Business Council (PBC) in its recent letter sent to Khusro Bakhtiar, Federal Minister of Industries and Production.

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  • PBC recommends key reform measures for energy sector

    PBC recommends key reform measures for energy sector

    KARACHI: Pakistan Business Council (PBC) has recommended the government a set of reforms for bringing improvement in the energy sector.

    The PBC sent its recommendations to the federal minister for industries and production and proposed key reform measures for the energy sector:

    • Federal government to restrict its role to removing the existing bottlenecks in power transmission infrastructure and to ensure that the merit order in generation is maintained;

    • Implement the terms of the MOU reached with IPPs to reduce the capacity charges and complete the renegotiation with those IPPs yet to be addressed;

    • Utilize excess generation capacity through marginal pricing to promote industrial use, also to generate economic activity;

    • Either privatize or transfer management of government owned Gencos (which are not due for retirement) to technically qualified private sector companies on an incentive for loss mitigation/incremental profit generation. Facilitate this through adequate protection from NAB and build appropriate safeguards on asset stripping and forced dismissal of employees;

    • Move to multi-seller/multi-buyer arrangements, allowing market dynamics to set the price for both generation and distribution of electricity;

    • Permit wheeling of electricity;

    • Establish power/energy commodity exchange(s) for transparent pricing;

    • Transfer all government owned Discos to the provinces at no cost;

    • Provinces to establish Public Private Partnerships to operate the Discos on prescribed performance improvement incentives;

    • Give consumers choice in the last mile of distribution. The GoP should set an example of this in the federal capital where it owns the Islamabad Electricity Supply Company (IESCO). Provinces and – KE can follow, the latter after its exclusivity expires in 2023;

    • Unbundle KE post its exclusivity period. In the meantime, expedite the resolution of constraints affecting long term investment in safe and reliable supply of power to the country’s largest city and commercial centre. In doing so, also rectify the harm done to Pakistan’s image as an FDI destination;

    • Phase out the country-wide uniform pricing formula so that the more efficient DISCOs can supply at a lower cost to consumers and provinces are able to use this to attract industry;

    • Remove all “cross subsidies” e.g., from industrial / commercial to residential consumers – The government can provide targeted cash transfers to the most deserving population segment via the Ehsaas program;

    • Any properly justified new capacity addition to be allowed only on renewables, without any take-or-pay sovereign guarantees;

    • Retire all inefficient and costly generation plants in the public sector;

    • Consider facilitating the conversion and deployment of existing coastal furnace oil plants for seawater reverse osmosis desalination;

    • Promote renewables, especially for off grid use;

    • Fast-track additional LNG terminals, storage and transmission to meet the shortfall between demand and supply of gas;

    • Use the Ehsaas programme to subsidize gas to the deserving population. Right price gas to promote conservation;

    • Incentivize conversion of domestic cooking and heating to electricity or other fuels such as LPG etc.;

    • Aggressively promote energy conservation.

  • FPCCI demands only three Eid holidays

    FPCCI demands only three Eid holidays

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday demanded the government of reducing Eid holidays to three to avoid business and economic losses.

    The apex trade body expressed displeasure over yet another set of SOPs and Public Holidays on account of Eid-Ul-Fitr announced by NCOC without consulting business, industrial, and trade community of Pakistan. 

    Mian Nasser Hyatt Maggo, President FPCCI, has demanded that industries and markets should only be closed for 3 days on account of Eid-Ul-Fitr; otherwise, there will be irreversible loss to already struggling businesses and huge shortfall in tax collection will further decelerate the economic activity.

     Mian Nasser Hyatt Maggo maintained that ports, customs, and required banking services for them should not even be closed for 3 days during Eid-Ul-Fitr; as exports are as necessary for survival of Pakistan as airports and hospitals. Even a single day closure of ports during Eid will add to existing huge glut and backlog for exporters and cause financial and goodwill loss for not being able to ship the consignments on agreed schedules. He demanded that ports timings should be extended to 05:00 PM with immediate effect.  

    Mian Nasser Hyatt Maggo, also expressed his shock over proposed Eid Holidays from 10-15 May, where ports, customs, and banks will remain closed and shipping lines will keep operating.

    This is utterly illogical as without ports, customs, and banks, there will be no use of shipping lines operating.

  • FPCCI urges following coronavirus SOPs to avert industrial halt

    FPCCI urges following coronavirus SOPs to avert industrial halt

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday urged trade and industry to follow SOPs related to coronavirus in order to avert complete halt of industrial and economic activities.

    FPCCI’s ruling group BMP Chairman Mian Anjum Nisar has asked the traders to strictly follow the government’s SOPs in markets for curbing the spread of deadly coronavirus and averting halt of the industrial wheel.

    Moreover, there is also need to speed up vaccination process, especially for the industry workers in the country, for the smooth operation of trade and industry, he added.

    “The businessmen themselves have to ensure a strict implementation of the standard operating procedures in markets and commercial areas in order to curb the spread of Covid-19 pandemic,” he said and warned that the third wave of coronavirus had spread to dangerous levels and the situation demanded that the business community play a role in strict compliance with the SOPs in business areas to control further Covid-19 infections.

    Mian Anjum Nisar stressed that a reduction in coronavirus cases would help the government to consider easing restrictions on businesses, as it would cause great losses to trade activities, render thousands of daily-wage workers and other workers jobless, making the lives more miserable, fuel a further increase in inflation besides badly impacting the economy.

    He said that during the third wave of coronavirus the situation has been deteriorating mainly due to lack of implementation of COVID-19 standard operating procedures and the solution lies in speeding up our vaccination programs, instead of opting for closure of trade and industry amidst GDP growth of just 1.5 percent. He said that in view of combating the coronavirus situation the government can impose smart lockdown where required, as complete lockdown would halt industry.

    The FPCCI former president pointed out that due to the previous lockdowns, Pakistan’s economy had suffered a loss of billions of dollars while millions of workers lost their jobs. Pakistan’s economy suffered negative growth last fiscal year for the first time in the history due to Covid-19, he said, adding that the best way to save the economy and businesses from more losses is to follow the SOPs.

    He observed that the complete lockdowns had created havoc globally, as the countries, which were providing loans had also came under debts while Pakistan is already facing financial crunch due to huge burden of debts. So, complete lockdown is not a good option, he added.

    He observed that the government will have to make visible reduction in taxes in the budget to help revive the businesses, which are near to bankruptcies owing to slowdown amidst coronavirus.

    He asked the government to take concrete steps to attract foreign investment, saving the livelihood of millions of workers associated with various sectors, as foreign investment in Pakistan’s long-term projects like power plants and oil and gas exploration.

    The BMP Chairman said that with a view to save the economy from the impacts of the slowdown due to the COVID-19 the government should announce special incentives for a cash-strapped SMEs, which represents more than 90 percent of around 3.2 million business enterprises in Pakistan, contributing 40 percent to the GDP, employing more than 80 percent of non-agricultural workforce, and generating 25 percent of export earnings.

    He expressed dissatisfaction over the financial packages by the government for the businesses to deal with the financial crunch, called for a significant cut in import duties and waiver of sales tax, income tax and additional income taxes, for the smooth running of trade and industry.

    He asked the government to expedite the process of vaccination and supply ample quantity of doses not only to the whole public but also to the trade and industry.

    Mian Anjum Nisar said that rising mortality in the midst of the third Covid-19 wave and growing anxiety in the business circles over possible restrictions on international travel and trade necessitate ramping up the pace of vaccination.

    To speed up inoculations, the government will need to bridge vaccine supply gaps with active participation from the federating units and the private sector, he added.

  • Prolong Eid holidays to adversely affect exports: APTMA

    Prolong Eid holidays to adversely affect exports: APTMA

    KARACHI: All Pakistan Textile Mills Association (APTMA) has strongly reacted to the announcement of the government regarding Eid Holidays and stated the prolong closure may adversely affect economic activities.

    The Patron in Chief APTMA, Gohar Ejaz has rejected the decision of the Government for Eid ul Fitr holidays from 10th to 16th May 2021. While expressing his concerns, stated that this will bring the whole country practically shut down for 10 days from Saturday, 8th May to Monday 17th May 2021.

    Shutting down the country for 10 consecutive days is unacceptable as it would create a lot of glitches for the economy, industries, particularly the exporters who will not be able to dispatch their shipments abroad due to the complete closure of banks, ports, customs, and all other departments during excessive holidays. 

    He warned that we cannot afford such extended holidays as they will result in giving losses of up to billions of rupees to the national exchequer and terribly affect business activities particularly the exports.

    Simultaneously, it will badly affect and deprive the daily wage earners of the country of their desperately needed earnings for continuous 10 days. Workers will find it impossible to feed their families creating a social disaster.

    He particularly highlighted the Textile Industry that despite the issues and hardship, committed to double the exports.

    Textile manufacturers have orders in hand and are working day and night to dispatch shipments according to the agreed schedule.

    This decision will end up in the cancellation of orders which will not only result in losses to manufacturers but also to the country.

    Keeping in view the social overall business climate and economic crises being faced by the country, Gohar Ejaz requested the Government to review the decision of Eid ul Fitr holidays from 10th to 16th May 2021.

    The holidays should only be from 13th to 16th May 2021. The government should not shut down production and transportation for 10 days as the country simply cannot sustain such production and export loss.

  • Shaukat Tarin assures FPCCI of taking on board before making economic decisions

    Shaukat Tarin assures FPCCI of taking on board before making economic decisions

    ISLAMABAD: Finance Minister Shukat Tarin on Friday assured the representatives of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to have a regular interaction.

    He also affirmed that all key stakeholders would be taken on board before making important economic decisions.

    The finance minister held a meeting with the FPCCI members through a video link. Adviser to the PM on Commerce Abdul Razak Dawood, SAPM on Finance and Revenue Dr. Waqar Masood, Chairman FBR and other senior officers participated in the meeting.

    While addressing the meeting, the Finance Minister briefed the participants about the economic priorities of the Government.

    He also outlined that the Government is adhering to strict financial discipline for achieving macro-economic stability and enhancing revenue generation.

    The Minister also outlined that Pakistan’s economy is showing signs of recovery amid Coronavirus pandemic, with construction and manufacturing sectors in lead. However, the third wave of COVID-19 is particularly challenging, he added.

    The Minister also stressed the role of Chambers of Commerce and Industry as a bridge between the Government and the traders for active coordination and welcomed suggestions from the members of FPCCI on the occasion.

    The representatives of FPCCI felicitated the Finance Minister on assuming new responsibilities and discussed the matters related to sales tax harmonization and rationalization of taxes.

    In his concluding remarks, the Finance Minister stated that the suggestions presented during the meeting would be accorded due consideration.

  • Gul Ahmed Textile declares 4-time increase in net profit during nine months

    Gul Ahmed Textile declares 4-time increase in net profit during nine months

    KARACHI: Gul Ahmed Textile Mills Ltd. (GATM) on Wednesday declared unprecedented four-time growth in after tax profit for the nine-month period ended March 31, 2021.

    According to the financial results, the textile unit declared Rs3.45 billion as profit after tax for the period July – March 2020/2021 as compared with profit after tax of Rs699 million in the same period of the last fiscal year.

    The company declared earnings per share at Rs8.08 for the period under review as compared with Rs1.64 in the same period of the last fiscal year.

    The sales of the company increased to Rs63.57 billion during the nine-month period ended March 31, 2021 as compared with Rs44.89 billion in the same period of the last year.

    The textile unit declared gross profit at Rs12.3 billion for first nine months of the current fiscal year as compared with Rs8.12 billion in the corresponding period of the last fiscal year.

    Gul Ahmed Textile Mills Limited announced an interim cash dividend for the nine months ended March 31, 2021 at Re1 per share i.e. 10 percent. It also declared bonus share in proportion of one share of every five shares held i.e. 20 percent.

  • Philip Morris announces 100pc increase in after tax quarterly profit

    Philip Morris announces 100pc increase in after tax quarterly profit

    KARACHI: Philip Morris (Pakistan) Limited, makers of cigarettes in the country, has announced around 100 percent increase in net profit for the quarter ended March 31, 2021.

    According to financial results submitted to Pakistan Stock Exchange (PSX) on Tuesday, the profit after tax for the quarter ended March 31, 2021 increased to Rs718 million as compared with Rs361 million in the corresponding period of the last year.

    During the period ended March 31, 2021, the company’s domestic net turnover stood at Rs4.44 billion reflecting increase by 6 percent versus same period last year.

    Increase in Distribution & Marketing expenses showed commitment by the Company to continuously allocate the resources for Commercial initiatives which can earn the best returns. Further, we continue to find efficiencies in Administrative Expenses to ensure the increase remains under inflation.

    During the same period ended March 31, 2021, the company’s contribution to the National Exchequer, in the form of excise duty, sales tax and other government levies, stood at Rs7,089 million (higher by 23.3 percent compared to the same period last year) reflecting 61.1 percent of first quarter of 2021 Gross Turnover.

    Giving industry background, the company said that the lack of a level playing field is one of the key challenges for the legally compliant tax paying cigarette industry.

    In 2013, the share of non-tax paid illicit sector was 23 percent but due to sheer lack of enforcement, it has now captured almost 40 percent of the market.

    Significant and excessive excise increases over the past few years have widened the price gap between legal and non-tax-paid illicit cigarettes thus facilitating downtrading and contributing to the exponential growth of the illicit cigarette sector.

    Excessive excise duty increases of 93 percent on Value Tier brands (i.e. from Rs17/pack in April 2018 to Rs33/pack in June 2019) during Federal Budgets of September 2018 and June 2019 have stretched the price gap and non-tax paid illicit brands continue selling at below minimum price prescribed under tax laws i.e. Rs63/pack.

    Further countless tax-evading brands of cigarettes across the country are being sold as low as Rs25/pack (avg. illicit price is Rs38/pack). For reference: Total Tax/pack (Excise & Sales Tax) on value brands is Rs44/pack.

    The company said that it had support the introduction of Track and Trace system as it will be an effective tool to supplement enforcement efforts against tax evasion.

    However, since 2019, the Federal Board of Revenue (FBR) has made multiple attempts to implement the system but, till date no major progress has been made on this front.