The Karachi Chamber of Commerce and Industry (KCCI) has expressed strong discontent over the recent decision by Federal Board of Revenue (FBR) to monitor production activities through cameras directly connected to the main tax database.
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Karachi Chamber disagrees with FBR tax collection analysis
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has expressed disagreement with the analysis released by the Federal Board of Revenue (FBR) regarding tax collection by cities and markets.
Agha Shahab Ahmed Khan President KCCI in a statement on Tuesday expressed total mistrust over the statistical figures recently disclosed by the FBR in its Tax Directory Analysis 2018.
He said that FBR recently released an analysis of Tax Directory 2018 based on income tax, in which it made some claims which were based on partial information creating a wrong perception about the income tax collection from different cities while some important information was skipped by which a reader could have verified the data.
President KCCI noted that under this report, Karachi’s income tax collection was reported to be Rs209 billion while district-wise it revealed that Karachi contributed Rs186.3 billion (Karachi Central added Rs9.06 billion; Karachi East: Rs34.09 billion; Karachi South: Rs114.23 billion, and Karachi West contributed Rs28.89 billion) which clearly indicates a discrepancy of Rs23 billion. It was unclear whether Karachi’s share was Rs209 billion in total or the district wise collection was to be added to it.
“This mismatch in income tax collection figures has raised serious doubts amongst business circles who are terming it as yet another conspiracy against Karachi.”
Likewise, he pointed out that the province-wise share was only revealed in percentage terms and the total value was not disclosed anywhere in the document to authenticate the claims.
Even while disclosing the income tax collection from major markets, many important markets including the DHA’s Gold Mark & Khadda Market and other important markets of Malir, Korangi, Banaras and Bahria Town etc. were not included in the data which gave a wrong impression that the tax collection from Karachi is low in comparison of other cities.
President KCCI further stated that the selected market data of the cities constituted just 25.7 percent (413,859 filers out of 1,606,424 non-salaried individuals and AOP filers), making it an incorrect estimate of the size and share of any city. President KCCI added that the data analysis given by FBR is just a number game and it is an attempt to undermine the share of Karachi.
According to the said document, the income tax collection of Rs209 billion from Karachi is very close to Rs204 billion collection from Islamabad which is impossible keeping in view the size, population and the immense industrial & economic activities in Karachi.
“We totally disagree to FBR’s analysis as Karachi is a port city where most of the Head Offices of multinational companies, banks, DFIs and insurance companies etc. are based while the highest number of institutions, hundreds of commercial markets, shopping malls and plazas etc. are also present in this city, making it the country’s leading industrial and commercial hub.
How could Islamabad with a population of just 1 million and negligible industrial activity compete with Karachi which holds a whopping population of around 20 million that makes it one of the largest cities of the world with seven industrial zones hosting thousands of industrial units?
He said: “Such pitiful attempts had been made in the past as well which were widely protested and completely rejected by KCCI and it has been proven from time to time that Karachi contributes the highest revenue of around 65 percent revenue to the national exchequer which has also admitted by the decision makers like Federal Minister Asad Umer and many others.
Karachi has always been the leading contributor of revenue to the national exchequer, hence we fear that FBR’s figures have been finalized cunningly through statistical juggling and it is a conspiracy to tone down the significance of Karachi which will not be accepted and widely protested at all available platforms”, Agha Shahab warned.
He requested Prime Minister Imran Khan and his entire team of economic experts to look into this serious matter and grill the FBR for releasing such an irresponsible analysis, besides directing the revenue collection authority to immediately withdraw the fabricated analysis and issue a revised version which must carry comprehensive and accurate fact and figures about Karachi.
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KCCI rejects electricity tariff hike, demands immediate withdrawal
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has rejected the recent hike in electricity tariff and termed it disaster for the industry.
The chamber also demanded the government to immediate withdraw the increase in electricity tariff.
KCCI President Agha Shahab Ahmed Khan in a statement on Thursday said that the announcement of increase in rates of electricity ranging from Rs.1.09 to Rs.2.89 has come as a shock to the industries based in Karachi.
“This is yet another blow to the trade and industry which is already suffering from losses as a result of lockdowns during Covid-19 pandemic and again due to devastating rainfalls in the city which has caused losses in billions of rupees,” he added.
He urged Advisor to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh to immediately withdraw this unjust and ill-timed hike in electricity tariff which would further aggravate the hardships for Karachiites who are struggling really hard to recover from devastating impact of coronavirus pandemic and subsequently the massive damage to their assets including buildings, warehouses, machinery and materials.
The damage is yet to be assessed when the water is cleared and some normalcy is restored.
He pointed out that ECC and higher authorities have shown utter disregard for the miseries and losses suffered by people of Karachi, by approving yet another electricity tariff hike because ECC had already imposed a tariff increase in July this year by Rs2.89 per with immediate effect.
Before the industrial, commercial and residential consumers could absorb the tariff hike in July’ 2020, yet another increase was approved to further squeeze the consumers in a calamity hit city.
“Indeed it is a huge disappointment that the Federal Government, instead of providing relief to the already burdened citizens of Karachi during the ongoing difficult times, continues to take anti-business and anti-Karachi actions.
“It is well known fact that the economic hub of Pakistan today is passing through worst possible crisis and suffering due to a crumbling infrastructure, lockdowns and urban flooding due to the heaviest rainfall in 90 year history”, he added.
On the one hand, the Prime Minister and Army Chief have shown their resolve to rescue the city of Karachi from complete destruction and economic fallout of natural as well as man-made disasters, while the ECC and honorable Advisors are taking decisions which are contrary to the commitments made by the Prime Minister and COAS, he opined.
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Industry rejects cut in gas supply; terms anti-business move
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Friday strongly rejected the cut in gas supply for industrial consumers and CNG stations.
Chairman Businessmen Group (BMG) and Former President KCCI Siraj Kassam Teli and President (KCCI) Agha Shahab Ahmed Khan, while totally rejecting SSGC’s load shedding schedule for Industrial Consumers and CNG Stations, stated that this unjust and anti-business move would completely destroy the industries who are already going through the toughest time and questing really hard for survival particularly in an extraordinary situation caused by coronavirus pandemic.
In order to overcome the ongoing electricity load shedding, SSGC has announced to carry out gas load shedding for three days to be suffered by industrial consumers, captive power plants and CNG stations which would prove detrimental for the industries who are already in deep crises and at the verge of complete collapse due to negative impact of lockdown imposed since March 2020, Siraj Teli and Agha Shahab said while terming SSGC’s load shedding as ‘sheer injustice’ and ‘conspiracy’ against the city of lights which is deliberately being plunged into darkness.
They pointed out that the government has always reiterated its resolve to provide uninterrupted electricity and gas supply to five export-oriented zero-rated sectors which hardly cover up around 1300 to 1500 industries but what about the rest of 14,500 industries, out of a total number of 16,000 industries in Karachi which continue to remain deprived as no relief has ever been given and they, despite being taxpayers, have to bear all the anguish and go through gas and electricity load shedding, exorbitant tariffs, infrastructure and other civic issues.
Instead of providing relief to all the industries in the ongoing extraordinary situation, the ECC recently approved Rs2.89 per unit tariff hike in KE Bills and now the hardships would aggravate further as the business community is being compelled to face gas load shedding for three days a week which is unacceptable, they added.
They criticized that if the government has to create so much trouble through such anti-business policies then they should formally make an announcement once and for all that all the industrialists should immediately shut down their factories forever and go somewhere else.
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KCCI rejects extension in lockdown
KARACHI: Business community on Wednesday rejected the extension in lockdown till July 15, 2020 by the Sindh government and said that procedures should be laid down to allow business activities.
Karachi Chamber of Commerce and Industry (KCCI) said urged the provincial government to withdraw the notification immediately.
In a statement Siraj Kassem Teli, chairman Businessmen Group and former president KCCI and Agha Shahab president KCCI rejected the extension in lockdown.
Sinch March 23, 2020 the Sindh government imposed partial lockdown to prevent spread of coronavirus. At least 213,467 confirmed cases of coronavirus have been reported up to July 01, 2020 in the country. Besides, the pandemic claimed 4,395 lives to date.
The KCCI said that restaurants, marriage halls, beauty parlors, cinemas etc. were shut for the last four months and their business were almost on verge of collapse.
They said that due to the continuous lockdown these businesses would close down and it would result in mass unemployment.
They urged the provincial government to allow opening of all businesses with strict Standard Operating Procedures (SOPs). They said that if through administrative measure an effective lockdown had been imposed then why not in case of implementing the SOPs.
The provincial government should realize problems of business community and resolve those on priority basis.
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KCCI declares policy rate cut insufficient
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) is not satisfied with one percent interest rate cut by the State Bank of Pakistan (SBP) and said it is very little reduction.
Chairman Businessmen Group (BMG) and Former President Karachi Chamber of Commerce & Industry (KCCI) Siraj Kassam Teli and President KCCI Agha Shahab Ahmed Khan, have expressed disappointment over a meager reduction of just one percent in Policy Rate by the State Bank of Pakistan, terming it “too little, too late”.
They stated that for a long time even before the pandemic, KCCI has consistently demanded to bring the policy rate to down to 4 percent in one go rather than in instalments.
Reduction in policy rate in bits and pieces did not provide the much needed thrust to economy whereas a one-time major reduction to 4 percent could have triggered growth and accelerated economic activities.
Reduction in policy rate in bits and pieces is not enough to provide stimulus to the economy hence, it is necessary to significantly reduce the interest rate in a single step, to rescue the trade and industry which is going through an unprecedented crisis.
Revision in policy rate to 7 percent will effectively mean the interest rate for large scale borrowers will be 8 percent to 9 percent after adding the bank’s spread while it will not be less than 10 percent to 12 percent for smaller entities.
In a statement, Siraj Teli and Agha Shahab pointed out that the business and industrial community is going through difficult times and many will not be able to survive through the economic crisis.
Nearly all major economies have supported businesses by reducing their policy rates to as low as zero percent realizing the gravity of a global economic meltdown and its impact on businesses.
It is surprising that the decision makers at the SBP and the governor do not have the perception of ground realities of Pakistan and the serious economic challenges the country will have to face in the near future if growth does not pick up soon.
They opined that there is now ample justification for meaningful reduction in policy rate because the inflation has declined sharply due to a steep fall in prices of crude oil, commodities and raw materials, while the demand has also been suppressed.
Therefore, it is imperative to support the business and industrial community at such a critical time through further reduction in policy rate.
Chairman BMG and President KCCI underlined the fact that KCCI had expressed reservations to the Prime Minister of Pakistan on various occasions and also to Governor State Bank of Pakistan during his last visit to KCCI before pandemic about astronomically high interest rates which stifled growth and increased cost of doing business.
They hoped that realizing the gravity of the situation, the State Bank would once again review its Monetary Policy at the earliest and revise the policy rate downward by another 300 basis points to provide much needed thrust to economy and trigger growth in the face of upcoming challenges created by Covid-19 pandemic that has affected the entire world.
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KCCI submits recommendations to rectify anomalies in Finance Bill 2020
KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has submitted its recommendations to rectify anomalies in the Finance Bill 2020, highlighting concerns over several taxation measures impacting trade and industry.
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SBP disburses Rs96 billion under refinance scheme to dilute COVID impact
KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) has said that so far around 1320 companies availed SBP’s refinance scheme and a sum of Rs96 billion has been disbursed to the applicants during last three months of current fiscal year to dilute adverse impact of COVID-19.
The SBP governor was exchanging views with Presidents of Karachi, Lahore, Islamabad, Quetta, Faisalabad, Sarhad, Sialkot, Gujranwala, Multan, Mirpurkhas Chambers and also the FPCCI at a meeting held a day earlier via video link, said a statement issued by Karachi Chamber of Commerce and Industry (KCCI).
The SBP governor said that the refinance scheme was launched as a risk sharing initiative to facilitate SMEs during the ongoing difficult times and minimize the negative impact on numerous businesses caused by the outbreak of coronavirus pandemic.
He was of the opinion that this meeting via video link with the business and industrial community of entire Pakistan should be held regularly on monthly basis so that the SBP could better understand business community’s requirements and accordingly devise strategies.
President KCCI Agha Shahab Ahmed Khan, in his remarks, urged the State Bank of Pakistan to publicize details of all the companies who have availed SBP’s refinance scheme with a view to make this scheme transparent otherwise, it is likely that the banks will be accused of giving loans to their favorites and undeserving in future.
He further stated that several public sector organizations including the State Bank of Pakistan have been following dissimilar definitions for SMEs that creates a lot of confusion and needs to be clarified.
In response, Governor State Bank assured that the issue has been rectified and all the institutions including SBP are following a uniform definition for SMEs which will be shared with KCCI so that they could understand the overall ambit of SME sector.
Agha Shahab said that some highly influential people having good contacts in the banking sector have easy access to financing facilities but a large segment of society remains deprived hence, there is a need to ease the overall criteria and paperwork for loan disbursement so that maximum people could benefit from these facilities and are able to survive in the extremely difficult and extraordinary situation being suffered by the business community of entire Pakistan.
“SBP’s refinance facility offers loans at an attractive interest rate of just 3 percent but many people simply don’t want to pay any interest as it is strictly prohibited in Islam. Hence, the State Bank must look into the possibility of launching another refinance facility with zero percent markup which would certainly provide huge support to the business community in distress”, he added.
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FBR urged to allow tax holiday on import of industrial raw material
KARACHI: Federal Board of Revenue (FBR) has been urged to allow tax holiday to import of industrial raw material in order to help the country to fetch much needed foreign exchange through enhanced exports.
Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, said that Pakistan’s exports are limited to very few sectors.
Payment of cash subsidies and multiple currency depreciation failed to improve exports. As per Fifth Schedule to the Customs Act, 1969 Imports of Textile Machinery and equipment for textile sector is exempted from custom duty and rate of withholding tax is one percent by the textile manufacturing units registered with Ministry of Textiles whereas for other industries Customs Duty is levied at 5.5 percent which is discriminatory and an anomaly.
The exports of non-traditional items have not been promoted due to such discriminatory treatment.
Pakistan could not achieve true export potential which exists in many sectors.
The KCCI proposed that there is a need to go beyond textile and agriculture products.
Export diversification is important. For this all industrial machineries and equipment not locally manufactured may be exempted from Customs Duty, Additional Customs Duty/Sales Taxand Additional Sales Tax.
Withholding Income Tax may be charged at 1 percent, which may be Adjustable/Refundable.
Machineries with latest technology will be imported production will increase for local consumption and for global exports.
Employment and government revenue will increase.
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KCCI urges government to shun pick, choose policy for business relief
KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has urged the government functionaries to avoid ‘pick and choose’ strategy for providing relief to businesses as it will never benefit the national economy.
Chairman Businessmen Group (BMG) & Former President KCCI Siraj Kassam Teli and President KCCI Agha Shahab Ahmed in a statement on Thursday appealed the Prime Minister Imran Khan, Advisor Finance Hafeez Shaikh, Advisor Commerce & Investment Abdul Razak Dawood and Federal Minister for Industries & Production Hammad Azhar to announce across the board relief to all sectors of the economy instead of pursuing a pick and choose strategy which would never benefit the domestic economy or the people in the middle and lower income categories.
Siraj Teli and Agha Shahab have emphasized that all the businesses and industries have been suffering losses and struggling to survive in business due to the outbreak of coronavirus pandemic.
No industry or business have been spared by the impact of pandemic on economy, hence it is necessary to announce an across the board relief package for all sectors of trade and industry irrespective of size and level of business, so that businesses could survive unprecedented crisis and economic shocks.
Recent relief packages announced by the SBP are limited mainly to export sectors or certain medium to large employers.
Major part of the SMEs and nearly all domestic industries and businesses have not been benefited by any such package.
Most of the businesses and industry are finding it hard to stay solvent in the present circumstances and may be forced to declare bankruptcies if timely relief is not provided to them.
Chairman BMG Siraj Teli said: “As survival is the name of the game so the government should immediately extend relief at any cost without wasting time otherwise the businesses are going to become bankrupt and the economy would consequently sink. Support businesses now for survival and you (the government) can earn later.”
President KCCI Agha Shahab said, “The pick and choose strategy being pursued by the government is discriminatory towards domestic industry and trade, which is neither in the interest of businesses nor the economy so it has to be stopped and immediate relief must reach out to all categories and sectors of trade and industry rather than one or two selected sectors.”
Appreciating the relief provided in electricity bills for consumers below 300 units and also the reduction in petroleum prices, Siraj Teli and Agha Shahab said that the business and industrial community welcomes these moves but these were not adequate and there is a need to do more.
In this regard, the government must announce further reduction in petroleum prices and also slash the electricity tariff, Sales Tax, Income Tax, Federal Excise Duty and Withholding Tax by 50 percent which would provide immediate relief to the entire nation.
They further advised the government to bring down the interest rate to four percent in line with strategies adopted by the economies around the world where the interest rates have been slashed down to zero and even negative in some cases.
They said that reduction in policy rate in bits and pieces is not enough to provide much needed stimulus to the economy hence, it is necessary to significantly reduce the interest rate in one go to 4 percent to help businesses sail through the unprecedented crisis.
“All these measures would provide some breathing space to industries by bringing down the cost of doing business which is the need of the hour as these will provide much needed cash flow and help to avoid layoffs which have already started taking place.”
While referring to relief measures given to some sectors and businesses, they opined that it is not certain that the government was going to get the expected returns from these sectors in the ongoing extremely critical situation in which every single business from a small trader to leading industrialist has his survival at stake so the government has to stop focusing on revenue generation and extend relief across the board which is desperately needed for the survival of the economy and businesses.
“This year, the government will have to forget revenue and reduce its expenditures which is the only way to save businesses from total collapse and also the masses from unemployment, poverty, hunger and starvation. Practical and out of box measures have to be taken to spend minimum amount of funds on running the affairs of the government while all the saved funds must be utilized to support businesses”, they added.