Business leaders have raised serious concerns over the continuous intervention of the International Monetary Fund (IMF), warning that its influence is exacerbating Pakistan’s economic struggles.
(more…)Tag: Federation of Pakistan Chambers of Commerce and Industry
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Envoy for removal of Saudi-Pak trade barriers
ISLAMABAD: Nawaf bin Said Al-Malki, Ambassador of Saudi Arabia in Pakistan, has stressed the need to remove barriers in trade between Saudi Arabia and Pakistan.
While welcoming a delegation from Federation of Pakistan Chambers of Commerce and Industry (FPCCI) led by its president Mian Nasser Hyatt Maggo at Saudi Embassy Islamabad, Al-Malki underscored the need of the removal of trade barriers and the promotion of trade through the direct route.
He stated that Pakistan and Saudi Arabia both possess huge natural resources which can be utilized for enhancement of bilateral trade relations.
The envoy also informed that there is huge potential in rice, textile, sea food, sports goods, agro-based products and there is a need of direct interaction between the traders of both countries in these commodities.
He said that Saudi Arabia wanted to see Pakistan as a growing economy as it is a very important country for the whole Muslim Ummah.
The ambassador said that Pakistan has lots of potential for speedy economic growth that should be highlighted more effectively to attract foreign investors.
Al-Malki urged that the media should focus on projecting the positive things of Pakistan to change wrong perception about it.
He said that wrong perceptions about Pakistan in foreign world needed to be changed to unlock its real economic potential.
President FPCCI Mian Nasser Hyatt Maggo said that Pakistan desired to further strengthen its trade ties with Saudi Arabia as both countries have great scope to promote trade in many areas.
Read More: Pakistan, Saudi Arabia agree to strengthen bilateral economic ties
Pakistan has strong strategic, diplomatic and economic relations with Saudi Arabia and cannot forget the financial assistance of Saudi Arabia in the form of oil on credit, construction of educational institutions and on Kashmir cause.
Maggo while quoting the statistics, he informed that the share of Pakistan in Saudi Arabia’s trade is just one per cent; while in Pakistan’s trade is approximately 7 per cent stated that Saudi Arabia is an important trading partner of Pakistan and the joint business council between the national chambers of both countries can play a vital role in enhancing the trade and business activities.
He urged on accelerated efforts for activation of trade and economic promotional activities through this platform. Maggo also underlined the need of exchange of trade delegations, holding of B2B meetings, trade exhibitions and business forums etc.
Read more: Pakistan, Saudi Arabia agree to enhance duty, tax cooperation
The President FPCCI further highlighted various potential areas for investment in special economic zones of Pakistan under CPEC project. He invited the investors of Saudi Arabia to explore Joint venturesin these special zones. Pakistan will facilitate Saudi investors by providing them one window operation.
Qurban Ali, Chairman Capital Office & Mirza Abdul Rehman Chief Coordinator FPCCI also emphasized on the enhancement of bilateral trades and investment and suggested opening of Saudi Arabia EXIM bank branch in Pakistan for trade facilitation. Mirza Abdul Rehman &Qurban Ali highlighted the potentials of bilateral trade in different sectors and also requested multiple entry visa to the genuine businessmen on the recommendation of FPCCI within shortest possible time.
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FPCCI urges measures to overcome gas crisis
KARACHI – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called upon the government to implement effective measures to alleviate the ongoing gas crisis, emphasizing the need for uninterrupted gas supply to industries and a reduction in electricity tariffs.
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FPCCI demands consultations on planned mini-budget
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday demanded the government of consultations with stakeholders on the planned mini-budget.
FPCCI President Mian Nasser Hyatt Maggo in a statement expressed his deep concerns over the approach of the government for not taking the apex business, industry, and trade body of Pakistan into the consultative process over mini-budget; and, what will it entail!
This effectively keeps all the stakeholders out of the loop, he added.
FPCCI President said that there are strong rumors that the government will also facilitate only the selected vested interests in the planned mini-budget next week. If all measures demanded by IMF are implemented, the people of Pakistan and the SMEs will have to endure an enormous burden of Rs. 800 billion, he added.
The FPCCI chief, referring to the announcement made by Finance Minister Shaukat Tarin, said that there is no way the current state of the economy can withstand an additional burden of Rs. 350 billion in taxes and the economy will collapse; and, the government would have to take the stakeholders into the consultative process to rekindle the process of economic growth after much damage.
Maggo said that the Finance Minister should immediately start the consultative process with FPCCI over the planned mini-budget. FPCCI has always kept the doors of the apex representative trade body of Pakistan open; but, the government has never paid any heed to the mutually-beneficial proposals we have put forward, he added.
The FPCCI chief said that the apex body had sent proposals on taxation reforms and broadening of the tax base, way back in February 2021; instead, the government has incompetently and insensitively has embarked on the path of tax pyramiding.
He reiterated that no more taxes can be extracted from the existing taxpayers. We should reach out to alternative multilateral financing sources and friendly countries for bilateral financing, he added.
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FPCCI recommends interprovincial trade of sugar
KARACHI: Mian Nasser Hyatt Maggo, President, Federation of Pakistan Chambers of Commerce and Industry (FPCC), has recommended trade and transportation of sugar and sugarcane at interprovincial level.
In a statement on Wednesday, Maggo observed that market forces allowed under fair and transparent conditions do have the potential to stabilize the sugar market and ensure availability across Pakistan on competitive prices.
FPCCI Chief has maintained that no government can continue to regulate and subsidize any major commodity for an indefinite time period and for an indefinite expenditure cap. He added that around 60 per cent of sugar is consumed in the country by commercial consumers; and, these consumers can create a healthy competitive environment.
Healthy competition and free market access is the only real-world, efficient, consumer-friendly and sustainable solution to Pakistan’s chronic food inflation; which has doubled the food prices in the past few years alone, he added.
Adeel Siddqui, VP FPCCI, said that the price of sugar will continue to be unstable and will continue to add inflationary pressures if the sugar cane crops of different provinces remain confined to their provincial boundaries. Free market is the answer to price instability in the wheat flour as well, he added.
He stated that the currently ongoing crushing season will see a bumper sugar crop and, in any case, opening up of provincial borders for sugar cane transportation will help bring the sugar prices down substantially and relieve the masses at large.
Maggo added that Pakistan Sugar Mills Association (PSMA) and the government are face-to-face on the issue of restricted movement of sugar within provinces; and, as President FPCCI, he is ready to mediate between the government and PSMA to reach a win-win resolution.
He emphasized that the Ministry of Finance & Revenue and Food Security & Research should establish a better and functional liaison with the stakeholders of sugar industry at every stage to avert any future sugar crises in the country; and, also, save precious foreign exchange reserves through creating an enabling environment for the domestic sugar industry.
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Apex trade body resents gas supply suspension
KARACHI: The apex trade body of the country has resented the suspension of gas supply to non-export-oriented industries.
Mian Nasser Hyatt Maggo, the president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in a statement on Monday expressed his profound concern and disappointment on the government’s decision to suspend gas supply to non-export oriented industries; which will result in losses of billions of rupees, to say the least.
He questioned the government that why no preemptive arrangements were made; while everyone in the government knew full well that there will be a huge gas shortage in the winter months? He regretted that only 10 cargoes of LNG are coming in December 2021 as compared to 12 in December 2020.
Maggo said that the delayed tendering has proven to be extremely expensive and resulted in less than required offers; and, that too, on a very high rate. He added that only 886 MMCFD of LNG will be imported in December 2021and only 950 MMCFD in January 2022, which is 27% less than the LNG imports in December 2020 and January 2021, respectively.
FPCCI President has observed that the responsibility and liability lie with the government for the criminal negligence for practicing delay and procrastination in issuing LNG Cargoes once again. Had the tenders been issued in a planned, coordinated, and timely manner, there would have been no shortage by now, he added.
Maggo added that FPCCI has time and again raised this issue; and, still, industries have to endure gas suspension several times every single year. Had the government come to FPCCI for a consultative process on the issue, we would have provided the guidelines to successfully forfend the gas crisis in a win-win mechanism.
FPCCI Chief has raised the question that why the government does not issue enough LNG import licenses to commercial importers to bridge the gap? Instead, it keeps mismanaging the gas supplies to the industries.
Maggo has called for an immediate and direct intervention of Prime Minister Imran Khan to save the industrial backbone of Pakistan. He proposed that, though difficult, the PM should consider the option of spot tendering with the help of friendly countries. FPCCI extends its full support to PM for the resolution of the issue, once and for all, he added.
FPCCI strongly demands immediate steps to restore gas supply to industries; and, take other remedial & compensatory measures to avoid closure of industrial units and loss of millions of jobs in the non-export oriented industries for the working class of Pakistan, which lives paycheck to paycheck every month.
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Digital mode to disrupt business transactions: FPCCI
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said that the digital mode of payment for corporate expenses would disrupt business transactions; because almost all sales in the country are made on credit and this credit is secured through ‘post-dated’ cheques issued by buyers in favor of the sellers.
Mian Nasser Hayat Maggo, President FPCCI, in a statement on Thursday expressed dismay that the Federal Board of Revenue (FBR) continues to persist with the provisions of the ITO Third Amendment 2021; which seeks to compel companies to make payments for their expenses through digital mode instead of cross cheques; which is the prevalent mode for settling sale and purchase transactions in the country.
He also stated that he was shocked by news reports revealing serious ‘Conflict of Interest’ underpinning this provision of coercing companies to make payments digitally. It has been learnt that this proposal was initiated by a committee of the FBR; and, not by the FBR itself and that committee includes an owner of a B2B FinTech company; which provides software services for digital payments.
FPCCI Chief added that it was that owner of the FinTech Company and a member of that FBR committee as well; who proposed this idea and pushed it to be made part of the law, according to some other committee members.
Mian Nasser Hyatt Maggo added that FPCCI has taken note of FBR’s contention that “3rd party payments are highly prevalent in organized and informal sector whereby businesses do not use their own bank accounts when making payment for supplies and tell their own customers/transaction based informal investors to make direct payments to the principal supplier.
This is highly prevalent in supply chains and has become an accepted norm” FPCCI considers this as a fallacious argument, as such practice cannot be employed by a company as it has to deduct withholding tax on all payments that it makes and submit returns of tax withheld to the FBR, he added.
Mian Nasser Hyatt Maggo explained that a company can only indulge in such practice if it has an ‘Undeclared Business Account’ in a bank. In that case, any such delinquent company can continue to make payments digitally; despite the change in the law; as the bank account used is ‘undeclared’ anyway.
Mian Nasser Hyatt Maggo pointed out that, nowhere else in the world, bank cheques have been discontinued or businesses coerced to use digital mode of payment instead of bank cheques. FBR’s desire to outlaw use of bank cheques by companies is indeed a unique regulation. Digital payments are evolving in Pakistan and developed countries are way ahead in employing digital mode of payments, but they too, have not coerced companies or anyone else to limit or discontinue use of cheques, he added.
FPCCI President emphasized that it is abundantly clear that what the FBR enunciates as problems, that lead to leakage of revenue, pertain more to the non-corporate sector than the corporate sector. The question, therefore, is why companies are being subjected to this third degree? The obvious answer lies in vested interests influencing the FBR to promote a particular mode of business by one stroke of a pen, he added.
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FPCCI suggests FTO should deal with adjudication cases
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has suggested that the cases of tax adjudication should be handled by the Federal Tax Ombudsman (FTO).
The suggestion has been made to make adjudication more fair, neutral, transparent, and competent resolution.
According to a statement issued on Wednesday, the FPCCI President Mian Nasser Hyatt Maggo presented the suggestion while speaking on the occasion of Dr. Asif Mahmood Jah, FTO Pakistan, visit to FPCCI Head Office in Karachi.
He said that FPCCI appreciates FTO’s recent notice and report on the misuse of powers by the officials of the Federal Board of Revenue (FBR) in issuing fake notices and accessing the bank accounts of the taxpayers unnecessarily.
Maggo apprised the audience that it has been FPCCI’s longstanding demand to have a well-reputed, fearless, competent, and senior officer appointed as FTO Pakistan.
Highlighting the major issues with income tax cases, FPCCI President said that discrimination, delay, injustice, non-transparency and non-payment of refunds are plaguing the taxation system of the country and that is the reason FPCCI recommends sweeping reforms in the system.
Hanif Lakhany, Vice President FPCCI, said that the business community is, for the first time, feeling secure and protected against the tax and customs officials’ harassment and highhandedness; due to the fair redressal by the office of FTO. He also thanked the government for having the right man for the right job.
Nasir Khan, Vice President FPCCI, expressed his satisfaction over the performance of the office of FTO; but, maintained that the tax and customs authorities use time-delay and procrastinating tactics to avoid swift redressal of the issues of business, industry and trade community. In order to resolve these grievances, FTO should be given the authority to reprimand and punish corrupt officers.
FTO Dr. Asif Mahmood Jah apprised the audiences on the mandate and the performance of the Federal Tax Ombudsman.
He said that 90% of the complaints by the business community go in their favor on average. The complainants have the option of appealing to FTO or of even filing a representation with the constitutional office of the President of the Islamic Republic of Pakistan.
Dr. Asif Mahmood Jah added that FTO can not directly reprimand the tax and customs officials; but, he can make his observations on misuse of powers, maladministration, anomalies, harassment and corruption; and, those are taken seriously.
Another limitation of the FTO is that we can not take up cases that have been already taken up by any court of law and are subjudice. Explaining the other functions of the institution of FTO, Dr. Jah said that inspections, own-motion actions and research are also mandated.
Dr. Asif Mahmood Jah also stated that he wants to expedite the turnaround time for the resolution of complaints from 60 days to 60 hours. He also agreed to FPCCI’s demand of setting up help desks at FPCCI offices in Karachi, Lahore and Islamabad.
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Direct tea import from Tanzania to reduce prices: FPCCI
KARACHI: The president of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Mian Nasser Hyatt Maggohas emphasized that tea prices can be quickly curtailed if imports are facilitated directly from Tanzania, which is a major producer of tea in the world.
Pakistan should explore every possible avenue to control food inflation and tea is one of the major food items fueling inflation; as it is dependent on imports heavily, he added.
Maggo said that it is perturbing to note that currently only 2 per cent of tea is being imported from Tanzania directly and pricing pressures in Kenyan tea markets are causing an added strain to foreign exchange reserves of Pakistan and exchange range volatility; and, exchange rate volatility is adding up to the miseries of importers and general public alike.
Hanif Lakhany, VP FPCCI, apprised the Pakistani exporters of the potential to export a number of products to Tanzania in large quantities, e.g. value added textiles, pharmaceuticals, surgical goods, sports goods, fruits & vegetables, plastic ware, etc.
Zeeshan Maqsood, Convener FPCCI’s Standing Committee on Tea Trade, said that Pakistan imports a huge amount of around 240 million kilograms of tea annually and Tanzanian share is only 3.5 million kilograms. Pakistan is a $600 million tea market and Tanzania stands to benefit a lot from getting a share out of it.
Dr. Jacqueline Mkindi, CEO of Tanzania Horticulture Association, led the counterpart delegation and invited the Pakistani traders to explore the opportunities in textiles, pharmaceuticals, gemstones, minerals and fruits & vegetables.
FPCCI considers the current trade volume of approximately $220 with Tanzania too short of the real potential and considers the psychological mark of $1 billion achievable within a short span of two to three years.
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FPCCI proposes enhancing SME turnover to Rs1.5 billion
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed to increase the turnover of Small and Medium Enterprises (SMEs) to Rs1.5 billion from existing Rs250 million for treatment of income tax.
FPCCI President Mian Nasser Hyatt Maggo, while praising the government for launching the SME Policy, said the defined annual sales turnover of a meager Rs250 million does not reflect the current ground realities of Pakistan; as when that threshold was set, the exchange rate was around Rs60 for a dollar, which has now climbed to over Rs170.
Therefore, he has suggested, the new limit should be set at Rs1.5 billion for SMEs.
FPCCI Chief has reiterated his proposal for a simplified and streamlined taxation regime; including, easy-to-fill tax return forms; end to corruption; phased lowering of sales tax rates, etc. through alignment it to FPCCI’s proposal called Simplification of Taxation System in Pakistan sent to the Prime Minister of Pakistan back in February 2021.
The FPCCI chief hailed the concerted efforts of Makhdoom Khusro Bakhtiar, Federal Minister for Industries & Production, for launching long-overdue SME Policy of Pakistan.
The SME Policy has been in the making for many years now and the process unfortunately got deferred many times over, he added.
Maggo said that financing is the lifeline for SMEs and the SBP’s current SAAF Scheme has allowed a banking spread of 8 per cent to commercial banks; on top of 1 per cent refinancing rate of SBP; which makes it 9 per cent for the SMEs. That much cost of capital is unaffordable, unproductive and unfeasible. FPCCI has proposed an interest rate of 3 per cent for SMEs to make it viable for small businesses & entrepreneurs.
Mian Nasser Hyatt Maggo has demanded that the government should update the definitions of Micro, Small and Medium-sized organizations and make it MSMEs on the lines of current best practices internationally; for devising preferential treatment protocols based on peculiar ground realities of Pakistan. MSMEs are the engines of growth & employment generation, he added.
Addressing the glaring issues in labour-related provincial & federal levies on SMEs in Pakistan, Mian Nasser Hyatt Maggo has proposed that all the provincial and federal levies to be clubbed together to make a single levy to be charged either as a percentage of turnovers or on some other pertinent criteria for the sake of simplification; but, protecting the present collections for the purposes these departments have been created as well.
In order to keep demand-side variables in SMEs favour, President FPCCI has suggested that the government should keep their procurement from SMEs strong & steady; incorporating procurement for CPEC-related projects.