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Category: Trade & Industry

This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.

  • FBR asked not to send notices for turnover tax

    FBR asked not to send notices for turnover tax

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has urged Federal Board of Revenue (FBR) to issue necessary instructions to all RTOs to refrain from sending notices for demanding the unjust annual turnover Tax to members of Pakistan Yarn Merchants Association (PYMA) till the issue is resolved as the Annual Turnover Tax, which was 0.1 percent, was inadvertently being charged at 1.0 percent.

    In a letter sent to Member (Inland Revenue-Policy) FBR, Dr. Hamid Ateeq Sarwar on Wednesday, President KCCI Junaid Esmail Makda referred to a meeting between KCCI delegation and FBR authorities held recently at FBR House in Islamabad in which this particular issue was also thoroughly discussed with Member IR-Policy and other officials who assured to resolve the same in due course but no correction has been done so far in SRO333 (1)/2011.

    While reiterating that Inland Revenue-Policy department and RTOs should not issue further notices, he said that PYMA members have been receiving notices for Annual Turnover Tax which have to be suspended till the FBR makes necessary amendment.

  • KCCI hopes new finance adviser to take steps minimizing taxpayers’ grievances

    KCCI hopes new finance adviser to take steps minimizing taxpayers’ grievances

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Monday felicitated Dr. Hafeez Shaikh on his appointment as adviser to prime minister on finance, revenue and economic affairs.

    The KCCI hoped that the new adviser would take practical steps in minimizing grievances of genuine taxpayers.

    Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli and President KCCI Junaid Esmail Makda, while extending heartfelt felicitations to Dr. Abdul Hafeez Sheikh on his appointment as Adviser to Prime Minister on Finance, said that keeping in view his vast experience and past performance, Dr. Hafeez Sheikh will certainly succeed in overcoming numerous crises being suffered by the country.

    In a letter sent to PM’s Adviser, Siraj Teli and Junaid Makda warmly welcomed the appointment of Dr. Hafeez Sheikh as PM’s Adviser and said that that due to his expertise and well acquaintance with trade and economic issues, the business and industrial community of Karachi was fairly optimistic that Dr. Sheikh will be able to successfully devise effective strategies in order to completely get rid of all types of crises.

    They stressed that as country was currently going through severe economic crises, therefore it was really essential that the business and industrial community should be taken on board in the policy making process.

    They hoped that the newly appointed PM’s Adviser would also take practical steps to minimize the grievances being faced by loyal taxpayers who are suffering terribly due to serious loopholes in the existing taxation mechanism.

    They stressed that the consultation strategy adopted by the PTI government with the business community of Karachi must continue and the contribution of more than 70 percent revenue to the national exchequer must always be taken into consideration.

    “The business and industrial community of Karachi stands shoulder-to-shoulder with the government during this difficult time and we will continue to support the government in the larger interest of the country,” they added.

    They also invited Dr. Hafeez Sheikh to visit the Karachi Chamber as soon as possible so that the business and industrial community could get an opportunity to share views about the Amnesty Scheme and also give valuable proposals for the forthcoming Federal Budget 2019-20, besides suggesting ways and means of how to improve the taxation system, enhance revenue generation and ensure ease of doing business which is one of the top most priority of the present government.

    Siraj Teli and Junaid Makda also paid glowing tribute to Former Finance Minister Asad Umer for always realizing the ground realities, making necessary corrections and struggling really hard to somehow minimize the burden on the poor segment of society.

  • FPCCI condemns terror attacks in Sri Lanka

    FPCCI condemns terror attacks in Sri Lanka

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday condemned brutal act of terrorism in Sri Lanka claiming around 290 lives.

    In a statement Engr. Daroo Khan Achakzai, FPCCI President strongly condemned the coward and brutal act of terrorism on luxury hotels and Churches holding Easter Services in Sri-Lanka, killing nearly 290 innocent people – including dozens of foreigners – and injuring nearly 500 people, including Pakistanis in a series of eight devastating bomb blasts on Sunday.

    The Chief of FPCCI, an apex body of the trade and industry in the country, expressed his deepest and profound condolence on behalf of the business community and the people of Pakistan in the wake of terrorist attacks in Sri-Lanka.

    He conveyed sympathies for the bereaved families on lost of their loved one in tragic incidents and prayed for the speedy recovery of the injured.

    The FPCCI President recalled, “Being a victim of protracted terrorism, Pakistan fully understands the pain of their Sri Lankan brethren and stands in complete solidarity with Sri-Lanka in their hour of grief.”

    Ackhazi hoped that the people of Sri Lanka would prevail unity and interfaith harmony amongst their ranks and files and the ugly attempts to destabilize their country would be crushed and foiled.

  • FPCCI felicitates newly appointed finance advisor

    FPCCI felicitates newly appointed finance advisor

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has felicitated Dr. Hafeez Shaikh, the newly appointed adviser to Prime Minister, for the slot of finance and revenue.

    FPCCI president Engr. Daroo Khan Achakzai in a statement on Friday extended his heartiest felicitation to Dr. Abdul Hafeez Shaikh on his appointment as Advisor to the Prime Minister on Finance for which he rightly deserved by virtue of his long and versatile experience of serving the country in various fields including Finance Ministership from 2010-2013; Minister for Privatization as well as Provincial Finance Minister of Sindh.

    He added that Dr. Abdul Hafeez Shaikh is a distinguished economist who remained affiliated with the World Bank during his career and possesses a vast experience of dealing with multilateral creditors such as IMF, World Bank, Asian Development Bank etc., and as such is well versed with Pakistan’s financial issues and economy.

    The FPCCI Chief hoped that under his ministership the country would steer out of the multi-faceted instant financial challenges being confronted by it such as balance of payment; fiscal and debt sustainability, better management of public sector entities; reforms of transparency; eliminate the menace of corruption; ease of doing business; arrest of rupee slide; reform tax administration; revive manufacturing sector; enhance access to finance etc.

    The FPCCI President was optimistic that during the tenure of Dr. Abdul Hafeez Shaikh, Advisor to the Prime Minister on Finance, the coordination between the FPCCI – an apex body of trade & industry – and Ministry of Finance would be further strengthened for the benefit of both the stakeholders viz business community and the government.

    The FPCCI Chief also congratulated other Members of the Prime Minister Cabinet on assuming charge of their new portfolios including Fawad Chaudhry, Minister for Science and Technology ; Firdaus Ashiq Awan, Special assistant to PM on Information & Broadcasting; Ghulam Sarwar Minister for Aviation; Ijaz Shah, Interior Minister; Shehryar Afridi, Minister of States and Frontier Regions; Azam Swati, Minister of Parliamentary Affairs.

  • Freezing bank account, raid only on discovery of evasion: KCCI

    Freezing bank account, raid only on discovery of evasion: KCCI

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has recommended that harsh measures of freezing bank account and raid should only be undertaken on discovery of massive tax evasion.

    A delegation of KCCI held discussions on Budget Proposals for Federal Budget 2019-2020 with Chairman Federal Board of Revenue (FBR) Jehanzaib Khan and his team at a meeting held at FBR House in Islamabad on Thursday.

    The KCCI team suggested that such harsh actions will only be taken in case of when evasion of very large amount is detected and only when concrete evidence is available rather than carrying out random raids on business entities.

    KCCI’s delegation, which was led by Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, comprised of Vice Chairmen BMG Haroon Farooki and Anjum Nisar, General Secretary BMG AQ Khalil, President KCCI Junaid Esmail Makda and Former Senior Vice President Muhammad Ibrahim Kasumbi while Dr. Hamid Ateeq Sarwar Member (Inland Revenue Policy), Muhammad Javed Ghani Member (Customs Policy) and Chief of Income Tax, Chief of Sales Tax and Chief of Excise Duty and others were also present at the meeting.

    During the meeting, consensus was developed on various major issues and the FBR officials, while agreeing to most of KCCI’s budget proposals, assured to implement the same in the upcoming budget.

    The FBR Officials, while responding to KCCI’s proposal, agreed to rationalize the tax structure for import of raw materials by commercial importers and manufacturers.

    They also committed to review and curtail the discretionary powers vested to the officials of Inland Revenue which are a source of harassment and extortion of business and industrial community.

    KCCI delegation highlighted all major issues including issues pertaining to the Income Tax, Sales Tax and discretionary powers along with concessions & exemptions in various sectors of the economy which have resulted in the distortion of the tax regime.

    In his remarks, Chairman BMG & Former President KCCI Siraj Kassam Teli pointed out that the current tax regime, relevant laws and discretionary powers were being used to harass the business and industrial community and were hindering economic and industrial growth.

    “These laws have to be reformed in order to create a conducive environment for growth and liberalization of trade and also for the revival of economic activities”, he added.

    On the occasion, a comprehensive presentation was also given to the FBR team in which major taxation issues were highlighted and remedial steps were also given for ease of doing business and enhanced revenue generation.

  • Commerce Ministry Help Sought as South Africa Imposes Anti-Dumping Duty on Pakistani Cement

    Commerce Ministry Help Sought as South Africa Imposes Anti-Dumping Duty on Pakistani Cement

    KARACHI: Chairman Pakistan-South Africa Business Forum (PSABF) Mohammad Rafiq Memon has said that Pakistan’s cement exports to South Africa have suffered terribly during the last couple of years because of the anti-dumping duty imposed by the South African government that resulted in shrinking cement export to around US$100 to US$150 million which was around US$700 million prior to imposition of anti-dumping duty.

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  • Doctors, lawyers earning huge money but not on tax net: FPCCI

    Doctors, lawyers earning huge money but not on tax net: FPCCI

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the government to bring professionals into tax net as they are not documented despite earning huge money.

    In its proposals for Budget 2019/2020, the apex trade body said that the professionals including doctors and lawyers should be taxed as large number of those professionals was not documented despite earning huge money.

    The FPCCI said that the government should make a comprehensive policy to encourage the people to establish industries in the country.

    The government should announce tax exemptions for 10 years to those who set up their industrial units within a time period of three years.

    The FPCCI said industrialization would help increase in employment opportunities and it would also generate more revenues for the government through indirect tax.

    Besides, industrial units should be provided cheaper electricity to make them more competitive.

    The national chamber also suggested the government to expand the tax net by documenting the economy. It said that retailers and small shopkeepers should be brought into tax net but rate of tax on them should not be more than one percent.

    Further, the FPCCI said that tax rates on immovable properties should be reduced in order to enhance valuation near to fair market value.

    The FPCCI also demanded that the sales tax should immediately be reduced from current 17 percent to 15 percent and it should further gradually reduced by one percent per annum.

    Corporate sector is heavily taxed at the rate of 29 percent which is too high and should be cut down to 25 percent. While, individual tax should be reduced as it is too much high at 20 percent.

  • IMF assistance only option for economy: Shaikh Rasheed

    IMF assistance only option for economy: Shaikh Rasheed

    KARACHI: Sheikh Rasheed Ahmed, Federal Minister for Railways on Saturday said the economy is facing immense difficulties.

    “We are stuck in a lot of crises and it is a well-known fact that IMF conditions will be really stiff. I, as Minister, have been reiterating this since day one that we have no other option but to approach the IMF for assistance,” he said while addressing business community at Karachi Chamber of Commerce and Industry (KCCI).

    He also said that there will be no economic stability without the political stability.

    Highlighting the improved performance of Pakistan Railways (PR), the Minister said that PR has earned Rs4 billion more as compared to the earnings during the same period of previous year. “We have also provided three more container trains to the business community and the number of freight trains during Imran Khan’s has enhanced from just 8 to 14,” he added.

    He said that a total of 24 new trains have been initiated so far in which five categories have been defined for different types of passengers while the occupancy of Rehman Baba Train has reached 160 percent with improved earnings.

    “We have also initiated Jinnah Express and Green Line which will be followed by Sir Syed Express with a target to attract all five types of customers and our overall strategies have been very successful.”

    Referring to 1760km long ML-1 project from Karachi to Peshawar, the Minister said that in this regard, Prime Minister Imran Khan will be signing the agreement on 27th April 2019 which would result in laying of completely new double track from Karachi to Peshawar with fencing on both sides and a minimum speed of 160Kms. Work on this project will be completed in the next five years, he added.

    Commenting on Karachi Circular Railway Project, the Minister committed that as soon as the Sindh government signs agreement, approves the design and feasibility, Pakistan Railway will remove all encroachments, of which many of the commercial encroachments have already been removed, and hand over the track to Sindh government but the Sindh government has to work in this regard.

    “If KCR is not completed during our tenure, it will never be completed”, he opined, adding that it was a really essential project which has become part of CPEC now and the Gwadar port which is capable of docking 190 ships each day.

    Responding to a suggestion, he invited the business community to undertake joint venture for setting up setting up the proposed parking plaza on PR land at II Chundrigar Road but Pakistan Railways must continue to get its share regardless of whether the parking plaza becomes successful or not.

    Speaking on the occasion, Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, while referring to Imran Khan’s last year’s visit on July 22 to Karachi to meet the business community just a couple of days before the general election, requested the Sheikh Rasheed to ask PM Imran Khan to honor all his commitments including his commitment to visit KCCI.

    He said, “during the said meeting, we suggested to remove all those individuals who are involved in wrongdoings and corruption. We cautioned that the corrupt bureaucracy will not allow Imran Khan to take remedial measures but these elements have to be pinpointed and sidelined while the honest officers must be brought forward at the helm of the affairs.”

    “However, except a few nominal changes done recently, no major change was witnessed in the FBR, NAB and FIA and the same old corrupt elements were given freehand, allowed to continue their wrongdoings and asked to make corrections”, he added.

    Referring to a letter sent to Prime Minister Imran Khan, Siraj Teli said that the Private Sector’s representatives, who work on the Boards of Public Sector Companies such as Karachi Port Trust (KPT), Pakistan International Airlines (PIA) and Civil Aviation Authority (CAA) etc., take/ endorse decisions purely on the basis of whatever information is provided to them at the Board Meeting of any particular Public Sector company and that information may not be correct or may be incomplete.

    “However, after a number of years when FIA or NAB find anything wrong in these public sector companies, they immediately start pursuing private sector representatives who have got nothing to do with day-to-day activities of the public sector companies yet they are accused and undergo extensive investigation and frequent summoning by NAB or FIA”, he added.

    He asked Sheikh Rasheed to request the Prime Minister to look into this matter and give immunity to representatives of private sector from such investigations. They should not even be contacted until and unless there is a solid proof of their direct involvement or they being beneficiaries. The Karachi Chamber will never support anyone who is found guilty of any misconduct”, he said, adding that the business community was really worried and fed up due to constant harassment by NAB, FIA and FBR which is not acceptable to at all.

    Commenting on the forthcoming Amnesty Scheme, Siraj Teli said that the previous amnesty was better but this amnesty scheme would become a failure due to lack of trust as those individuals who declared their assets in the previous amnesty scheme, were constantly being pursued and harassed by FBR, FIA and NAB. “Amnesty without protection and without dealing with the trust deficit would lead to failure”, he added.

    President KCCI Junaid Esmail Makda, in his welcome address, stated that Karachi was one of the world’s most populous city and one of the mega cities. Lamentably, it may be the only city of this size that doesn’t have a mass transit transport system now when surprisingly, it did have Karachi Circular Railway (KCR) in the past.

    He said that Karachi produces about 30 percent of the manufactured good, handles 95 percent of foreign trade and contributes more than 70 percent to the national revenue yet it remains deprived of basic facilities including KCR.

  • FPCCI recommends single digit sales tax rate

    FPCCI recommends single digit sales tax rate

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed reducing sales tax to single digit from existing 17 percent. In its pre-budget conference on Wednesday, the apex trade body present its set of proposals for budget 2019/2020.

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  • Second phase of Pak-China FTA not at cost of local industry: FPCCI

    Second phase of Pak-China FTA not at cost of local industry: FPCCI

    KARACHI: Federation of Chambers of Commerce and Industry (FPCCI) has advised the government that the second phase of Pak-China Free Trade Agreement (FTA) should not be at the cost of local industry.

    FPCCI President Engr. Daroo Khan Achakzai, while chairing session on Pak-China FTA, advised that Pakistan may enter into second phase of FTA with China but not at cost of closing our local industries and adversely affecting the economy at large.

    He said first phase had enhanced Pakistan’s trade deficit with China to US$ 17 billion.

    President FPCCI further added that Pakistan has already liberalized 60 percent of its trade with China, suggesting that Ministry of Commerce to take policy reforms for elimination of under-invoicing and settle to have agreements with China on removal of Sanitary and phytosanitary measures (SPS), Technical Barriers to Trade (TBT) and barriers other than tariffs.

    During the interactive session, the participants expressed their serious concern over the signing of second phase of CPFTA without ensuring the elimination of weaknesses of first phase of CPFTA.

    The participants said that considering the stances of several sub sectors industries like seafood, vegetable oil and leather products should also be considered to have zero rated export entry status like ASEAN so that enhancement of exports are contributed by these existing sub sectors of industries with available potential further to grow with the passage of time.

    The participants also considered to protect the domestic industries of Chemical, steel, leather, plastic and poultry, in specific industries in SME in such a way that the effects of FTA do not adversely affect the present industry, already hostage of domestic supply constraints.

    They said that time space, tariff reducing modalities, elimination of non tariff barriers should be rationalized in FTA in such a manner that circumstances surrounding the economies of FTA partners is fundamental to negotiate on non reciprocity basis due to huge difference in economic development levels of FTA partners.

    The participants of the meeting also showed concern on non-implementation of Electronic Data Exchange, earlier agreed between the Customs of both side countries.

    The participants also showed further concern on non documented data of at least 36 percent on account of reasons inclusive of continued reported under invoicing, which not only is making losses in custom collections but as well as is against fair practices of trade leading to unhealthy competition.

    The participants also stressed on the negotiation to focus negotiating on win-win concluded safeguard measures, transfer of technology and required skills for smooth operation of negotiated FTA.

    Moreover, the participants underlined the need of direct market access of Pakistan’s products in China; which presently allows import from Pakistan for sales in Chinese market through vendors, which have registered history of on rising trade disputes.

    The existing trade through such intermediaries creates the burden of not only apprehensions but also generates non resolved disputes arising of such mode trades in between Pakistan and China.

    The participants also stated that since already 60 percent trade of Pakistan from China is being conducted in major at Zero percent and in minor in between 0 to 5 percent, therefore further liberalization in these zero and 0-5 categories on import of intermediary and finished goods may not be preferred to be part of FTA.

    The participant feared that economic growth of Pakistan closing to 3.7 percent during this year will further suffer due to addition of further trade liberalization and small and medium vulnerable SMEs may add to the closure and reduction of industrial economy of Pakistan.

    The country needs employment as fundamental to the requirement of law and order, which may be assured to be preserved during negotiation of FTA as liberalization also costs employments for weaker economies.

    The participants also suggested that China should also give concrete plan of relocating its labor intensive industries in SEZs of Pakistan and include Pakistan in the supply chain of its finish goods exports from Pakistan, example of which are countries like Vietnam & Cambodia doing so.

    The participants also strongly suggested that Mutually Recognition Agreement for quality and quarantine inspections and standards be adopted to include meat and agriculture produce exports, which has identified potential of exports.

    The meeting concluded that the second phase of CPFTA should be deferred for some period to analyze the benefits and losses and further analyze as what exactly went wrong in first phase negotiations concluding to development of huge trade deficit with China.

    Pakistan should ask China to facilitate entry of significant export share from Pakistan, which demand of stakeholders in Pakistan appears to be realistic in view of rising deficit since first phase from 2.9 Billion USD to over 17 Billion USD.

    Further this deficit number on exchange of electronic data may cross 20 Billion USD. The outcome of such negotiation should also take care of issues of balance of payments, which are also recognized by the multilateral negotiating mechanisms.

    The participants also asked for free access and publication of negotiating draft with GoP on all proposed matrix and reasons thereof being considered to be negotiated in second phase of CPFTA.

    The proposed draft on negotiation be provided with reasons of endeavoring win-win situation available with GoP negotiators in respect of phase-II negotiation of FTA with China with complete analysis as how the present and future of industries will be protected by fiscal incentives, through tariff rationalization and other measures deem necessary to keep the country further falling from the declining GDP growth.