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Tag: export

  • SBP raises mark-up rate for export financing scheme

    SBP raises mark-up rate for export financing scheme

    KARACHI: The State Bank of Pakistan (SBP) on Thursday increased mark-up rate for refinancing under Export Financing Scheme (EFS).

    The SBP increased the rate of mark-up for export financing scheme following sharp jump in key policy rate by 250 basis points to 12.25 per cent.

    READ MORE: SBP issues list to impose 100% cash margin on import

    “It has been decided to increase the markup rate for financing under Export Finance Scheme (EFS) by 2.5 per cent in line with the increase in policy rate announced in the MPC meeting today (April 07, 2022),” the SBP said.

    Accordingly, the markup for Export Finance Scheme (both Part I and Part II) will be 5.5 per cent per annum with effect from April 08, 2022 till further instructions.

    Banks’ spread for corporate borrowers and SME borrowers will remain unchanged i.e. 1 per cent & 2 per cent, respectively.

    READ MORE: SBP allows commission payment to foreign brokers

    This revision in rates will not be applicable on financing under Rupee-based discounting facility of EFS, the SBP added.

    Earlier in the day, the Monetary Policy Committee (MPC) of the SBP in its emergent meeting decided to raise the key policy rate to 12.25 per cent from 9.75 per cent.

    The MPC noted that the latest developments necessitated a strong and proactive policy response. “Accordingly, the MPC decided at its emergency meeting today, to raise the policy rate by 250 basis points to 12.25 percent.”

    READ MORE: SBP increases policy rate sharply by 250bps to 12.25%

    This increases forward-looking real interest rates (defined as the policy rate less expected inflation) to mildly positive territory.

    The MPC was of the view that this action would help to safeguard external and price stability.

    The MPC also noted that SBP is in the process of taking further actions to reduce pressures on inflation and the current account, namely an increase in the interest rate on the export refinance scheme (EFS) and widening the set of import items subject to cash margin requirements.

    These items are mostly finished goods including luxury items and exclude raw materials.

    READ MORE: SBP receives 20 applications for digital bank licenses

  • Final tax regime allowed for export of services

    Final tax regime allowed for export of services

    KARACHI: The Finance Bill 2021 has proposed a final tax regime for export of IT and IT enabled services.

    According to commentary on budget 2021/2022 released by KPMG Taseer Hadi & Co. currently, tax deduction on foreign proceeds from export of goods are taxed at 1 percent which is considered as final tax.

    The Finance Bill proposes similar taxation regime for following specified services:

    —Export of IT and IT enabled services where tax credit under section 65F is not available;

    —Services or technical services rendered outside Pakistan or exported from Pakistan;

    —royalty, commission or fees derived by a resident company from a foreign enterprise in consideration for the use outside Pakistan of any patent, invention, model, design, secret process or formula or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided to such enterprise;

    —construction contracts executed outside Pakistan; and

    —other services rendered outside Pakistan as notified by the Board from time to time.

    The tax deductible will be final tax subject to following conditions:

    (i) Income tax return has been filed;

    (ii) withholding tax statements for the relevant tax year have been filed;

    (iii) sales tax returns under Federal or Provincial laws have been filed, if required under the law; and

    (iv) no credit for foreign taxes paid shall be allowed.

    The Bill also proposes an option for taxation under Normal Tax Regime which is to be exercised every year at the time of filing of income tax return.

    The Bill proposes while explaining the nature and source of any amount, investment, money, valuable article, expenditure, referred to in section 111, a taxpayer takes into account any source of income under this section, he shall not be entitled to take credit of a sum that can be reasonably attributed to the business activity under this section.

  • Import bill falls by over 10 percent in October; export witnesses 2.1 percent growth

    Import bill falls by over 10 percent in October; export witnesses 2.1 percent growth

    ISLAMABAD: The country’s import bill has witnessed decline by 10.3 percent to $4.07 billion in October 2020 as compared with $3.65 billion in the same month of the last year.

    Meanwhile, the exports have witnessed an increase of 2.1 percent to $2.06 billion in October 2020 as compared with $2.02 billion in October 2019.

    To review the current export trends, a meeting was held on Tuesday, in the Ministry of Commerce, under the Chairmanship of the Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood.

    The trade deficit shrank by 22.6 percent in October 2020 to $1.587 billion, showing an improvement of $463 million over October 2019.

    The advisor was also briefed that during July-October 2020 the exports decreased only marginally by 0.1 percent. The exports during this period stood at $7.54 billion as compared to $7.547 billion during the same period last year.

    He was informed that, during July-October 2020, the balance of trade has witnessed a decline of 4.5 percent to $7.424 billion as compared to $7.776 billion last year.

    The Advisor expressed his satisfaction at the export trends and praised Pakistan’s exporters who made it possible for bringing the exports to pre-COVID-19 levels despite uncertainty and contraction in Pakistan’s major markets.

    He was also briefed on the major export product trends and was informed that during July-October 2020, the export increases were mostly in the value added sectors.

    The increases were witnessed in Home Textiles (10.0 percent), Women’s Garments (20.8 percent), Jerseys & pullovers (35.3 percent), Made-up articles of textile (10.4 percent), Stockings & socks (19.2 percent), Cement (10.8 percent), Pharmaceutical products (26.8 percent), Tarpaulins (66.8 percent), and Made-up clothing accessories (245.2 percent) as compared to the same period last year.

    He was informed that, as compared to the same period last year, the export decreases during July-October 2020 were seen in mostly the non-value added sectors such as Cotton Fabric (-8.0 percent), Cotton yarn (-40.1 percent), Worn clothing (-63.6 percent), Raw Leather (-38.4 percent), Crude Petroleum (-53.7 percent), and Cotton (-95.7 percent). The Advisor was also briefed on the geographical spread and growth of exports.

    He was informed that, as compared to the same period last year, Pakistan’s top five growing markets during July-October 2020 are Indonesia (39.3 percent), Qatar (34.5 percent), Denmark (24.9 percent), S. Korea (22.5 percent) and Afghanistan (15.6 percent).

    The Advisor expressed his hope that Pakistan economy will continue on its upward recovery trend and he directed that the officials of Ministry continue to proactively facilitate exporters and businessmen.

    He further directed that no efforts should be spared to counter the effect of the second wave of COVID-19 in Pakistan’s major markets.

  • Cabinet allows export of all PPE items

    Cabinet allows export of all PPE items

    ISLAMABAD: The federal cabinet in its meeting held on Tuesday allowed export of all Personal Protective Equipment (PPE) items. The cabinet approved to lift the ban on export of Tyvek Suits and the anti-malarial drugs, including Chloroquine and Hydroxychloroquine.

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  • Customs stops export consignments of onion after ban decision

    Customs stops export consignments of onion after ban decision

    KARACHI: Pakistan Customs stopped export consignments of onion to comply with government decision to impose ban on the vegetable to meet local demand.

    In an letter issued by Model Customs Collectorate (MCC) Exports on Friday to Pakistan International Container Terminal (PICT) stated: “In compliance of directive received from the Headquarters, the loading of all the consignments / containers declared to contain ‘fresh onion’ falling under PCT 0703.1000 stopped immediately till further orders.”

    The Economic Coordination Committee of the Cabinet in its meeting on February 19 decided to impose ban on export of onion till May 30, 2020 in order to meet local demand and stabilize prices.

    Exporters claimed that due to immediate ban imposed by the customs authorities above 300 containers amounting $3.2 million were stuck up, where loading already allowed and about to load on vessel.

    Earlier, on February 20 All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Associations (PFVA) in an SOS to the Advisor to the Prime Minister on Commerce Abdul Razzak Dawood, said that the sudden stoppage would have serious repercussion.

    The association said that the exporters on onion had already received advance payments from their foreign buyers for export of onion and with immediate ban, they would be unable to honor their business commitment which would not only put a question mark on their credibility, it would also terribly shake confidence of the foreign buyers.

    It further said that the onion exporters had already procured quantity of onion according to orders from foreign buyers for processing the same in their pack houses and the sudden ban on export would lead to colossal financial losses to the exporters due to limited shelf life of the onion.

  • Export commitments to be missed on gas supply curtailment: APTMA

    Export commitments to be missed on gas supply curtailment: APTMA

    KARACHI: All Pakistan Textile Mills Association (APTMA) in a statement on Thursday said that industries will fail to meet export commitments due to 50 percent reduction in gas supply.

    Zahid Mazhar, Chairman, APTMA, Sindh-Baluchistan Region demanded the government to restore full supply of gas to the industries located in the province of Sindh and Balochistan as the industries in these province can’t operate and fulfill their export commitments at 50 percent load supply.

    Mazhar said that the province of Sindh and Balochistan are producing about 84 percent of the system gas and consuming only 39 percent of the gas produced in the country, even then the industries of Sindh province are denied of their Constitutional Right guaranteed by the Constitution of Pakistan.

    He said that the gas being produced in Sindh should first be supplied to the province and only after fulfilling the requirement of Sindh and Balochistan, surplus gas should be passed on to the other provinces in line with Article 158 of the Constitution of Pakistan.

    Mazhar further said that the textile industry units located in the province of Sindh are mostly export oriented units and these units attract priority in the allocation of energy including gas supply.

    As this is the peak season and any disturbance or short supply of gas would affect the timely shipments of export commitments resulting in not only decline in export earnings and loss of foreign buyers of textile products of Pakistan but would also result in decline in production and revenue of the government.

    He said that the curtailment in gas supply by 50 percent in addition to low gas pressure has completely disturbed the production-lines, resulting in decline exports and causing damages to industry’s costly plants and equipments.

    He further said that curtailment in gas supply is against the assurance given by the present government of Imran Khan of continuous and uninterrupted supply of energy both gas and electricity specially to the export oriented industry like textiles which is earning more than sixty percent of the much needed foreign exchange through exports.

    It is also against the government policy of industrialization and export led growth, he added.

    He said that the curtailment in gas supply by 50 percent to the Sindh and Balochistan based industry that makes about 52 percent of the country’s total exports is resulting in loss of foreign exchange and revenue.

    He said production of export oriented industries has shrunk since the export sector has been compelled to work for 50 percent of its capacity.

    In other countries governments give priority to their export oriented industry in supply of gas and energy, whereas domestic and commercial sectors are provided with LPG or LNG. On the contrary in Pakistan, our precious natural gas is being supplied to domestic and commercial sectors at the cost of industries.

    Mazhar urged the Federal and Provincial Governments and the gas utility to look into this issue on urgent basis and to ensure continuous and uninterrupted gas supply otherwise the industries would be compelled to close their operations which will create not only irreparable losses to the economy of Pakistan but would also create law & order situation due to unemployment of large number of workers employed in these industries.

  • SBP facilitates exports against advance payment

    SBP facilitates exports against advance payment

    KARACHI: State Bank of Pakistan (SBP) has amended framework related to trade based money laundering in order to facilitate receiving export payment.

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  • Pakistan cuts trade ties with India; notifications issued

    Pakistan cuts trade ties with India; notifications issued

    ISLAMABAD: Pakistan has completely cut trade ties with India as the ministry of commerce issued notification for banning import and exports with the neighboring country.

    The ministry of commerce on Friday issued SRO 927(I)/2019 and SRO 928(I)/2019 to impose ban on trade with India.

    Through SRO 927 (I)/2019, the ministry of commerce amended Import Policy Order, 2016 and included India in the list of countries having not trade links. Earlier, only one country i.e. Israel was on the list.

    With the amendment the goods of Indian or Israeli origin or imported from India or Israel are prohibited.

    Similarly, through SRO 928(I)2019, the ministry of commerce also restricted exports to India.

    The ban has been imposed on trade with India following decision taken at the National Security Committee (NSC) against atrocities of India on Kashmiri people.

    Prime Minister Imran Khan on Wednesday chaired meeting of the National Security Committee at Prime Minister’s Office.

    The meeting was attended by Foreign Minister, Defence Minister, Interior Minister, Minister for Education, Minister for Human Rights, Minister for KA&GB, Law Minister, Adviser Finance, CJCSC, COAS, CAS, CNS, SAPM on Information, DG-ISI, DG-ISPR, Secretary Foreign Affairs and other senior officers.

    The Committee discussed situation arising out of unilateral and illegal actions by the Indian government, situation inside Indian Occupied Jammu and Kashmir and along LOC.

    The Committee decided to take following actions:- 1. Downgrading of diplomatic relations with India. 2. Suspension of bilateral trade with India. 3. Review of bilateral arrangements. 4. Matter to be taken to the United Nations, including the Security Council. 5. Independence Day this 14 August to be observed in solidarity with brave Kashmiris and their just struggle for their right of self-determination. 15th August will be observed as Black Day.

    PM directed that all diplomatic channels be activated to expose brutal Indian racist regime, design and human rights violations. PM directed Armed Forces to continue vigilance.

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  • Past revenue-centric policies hurt exports: Prime Minister

    Past revenue-centric policies hurt exports: Prime Minister

    ISLAMABAD: Prime Minister Imran Khan has said that the revenue-centric economic policies of past governments have badly damaged the competitiveness of Pakistan’s exports.

    The past the revenue-centric economic policies with overemphasis on collection of revenues made the industry uncompetitive, the prime minister said while chairing 80th Meeting of the Board of Administrators of Export Development Fund (EDF) at Prime Minister’s Office, according to a statement on Thursday.

    The prime minister said that economic future of the country was linked with enhancement of exports which so far have remained far below the actual potential.

    The present government has made a paradigm shift in prioritizing the competitiveness of industry vis-à-vis revenue collection.

    The prime minister while expressing serious concern over the mismatch in collection and releases of the EDF during past years, directed that timely release of EDF, which was indeed the exporters’ money, be ensured during the current year while a comprehensive system be devised for the future to ensure unhindered releases and optimum utilization of EDF for its mandated purpose.

    The Board of Administrators of EDF, reconstituted the Finance Committee of the EDF Board which will be chaired by the Advisor to the Prime Minister on Commerce.

    The meeting approved budget and the schedule of activities to be held during TEXPO Exhibition 2019 at Lahore Expo Centre on 11th -14th April 2019.

    It was also decided during the meeting that the EDF Board would also include Secretary Textile Division, as its member, to ensure representation of the textile sector, being the major contributor towards exports of the country.

    Talking to the leading businessmen, the Prime Minister stated that the Government would continue taking the business community on-board in policy formulation process and their feedback would help the government further improve policy framework and to extend maximum facilitation to the exporters and the businessmen of the country.

  • Cement exports increase by 52 percent in eight months

    Cement exports increase by 52 percent in eight months

    KARACHI: Pakistan’s cement exports registered unprecedented growth of 52 percent during first eight months (July – February) of fiscal year 2018/2019 mainly on the back of rupee depreciation and focus on low margin exports.

    The export of cement rose to 4.65 million tons during first eight months of current fiscal year as compared with 3.05 tons in the corresponding months of the last fiscal year, analysts said on Tuesday.

    However, provisional cement data for the month of February 2019 displays a 9 percent MoM decline to 3.33 million tons (January 2019: 3.65 million tons) given surprise rainfalls across the country as well as extension in the winter season, according to analysts at Arif Habib Limited.

    On a YoY basis, the slowdown in dispatches appeared more visible at 12 percent led particularly by weakness in domestic dispatches of 19 percent YoY to 2.82 million tons in February 2019.

    Albeit, exports remained robust at 0.51 million tons (up by 69 percent YoY) in lieu of Pak Rupee depreciation against US Dollar, domestic over capacity allowing companies to focus on low margin exports, US sanctions on Iran opening up other exports markets for Pakistan as well as wasteful capacity cuts globally.

    The analysts said that drop in local offtake was triggered by lackluster demand in North (down by 24 percent YoY to 2.31 million tons) for aforementioned reasons where local offtake underwent a dip of 25 percent YoY to 2.15 million tons.

    This took the 8MFY19 total dispatches to 30.09 million tons, stable over SPLY, owed to a stunning 52 percent jump YoY in exports at 4.65 million tons which cushioned the 6 percent dip in local sales at 25.44 million tons.

    Further dissection unveiled that South continues to show resilience with growth in total dispatches at 8.25 million tons, up by 49 percent YoY amid a sharp 3x escalation in sea-based exports to 2.79 million tons, whereas local offtake also remained healthy at 16 percent YoY to 5.46 million tons.

    On the flipside, the North region sustained continuous pressure with dispatches pulling down by 11 percent YoY; local offtake depicted an identical decline to 19.98 million tons while exports dipped by 16 percent to 1.86 million tons.