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Tag: KCCI

  • KCCI urges K-Electric to stop load shedding

    KCCI urges K-Electric to stop load shedding

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has expressed serious concerns of electricity shortfall which caused massive losses to trade and industry.

    Agha Shahab Ahmed Khan, President KCCI urged the K-Electric to immediately stop the ongoing load shedding spell and focus on improving the infrastructure, particularly power generation capacity and distribution network which is in a terrible state.

    In a statement issued, Agha Shahab pointed out that due to K-Electric’s poor performance, almost all the localities of Karachi and also the seven industrial zones have to suffer unannounced load shedding and power failures every day for many hours that results in substantial losses.

    “The industries have suffered badly due to the outbreak of coronavirus and the subsequent lockdown for more than two months and now, K-Electric has also resorted to massive load shedding, which poses threat to the already staked survival of industries,” he said and asked ‘What is the motive behind carrying out immense load shedding in an extraordinary situation?’

    “The unannounced and prolonged load shedding by K-Electric would prove to be the last nail in the coffin of industries and the economy”, he opined and added that People from different walks of life, who have been inhabiting in various localities, sought KCCI’s assistance to exert pressure on K-Electric’s management so that uninterrupted power supply in every area could be ensured.

    He stressed that K-Electric must adopt measures on war footing to minimize the hardships being suffered by the citizens and the business community of the largest city of Pakistan which contributes a lion’s share of more than 70 percent revenue to the national exchequer. Karachiites are already under tremendous mental pressure due to coronavirus pandemic and their sufferings multiply further when they have to go through prolonged load shedding every day and night.

    President KCCI said that K-Electric has been earning huge profits of billions of rupees every year but unfortunately, it has not been adequately investing on improving the dilapidated distribution network which was in a very bad shape as every year whenever the electricity demand shoots up in the city during summer season, K-Electric fails to deal with the situation and the public pays the price for this failure in shape of load shedding.

    Agha Shahab further advised that as Monsoon season is just ahead and heavy rainfalls have been forecasted by the Metrological Department, K-Electric must act sensibly and responsibly, avoid repeating mistakes and adopt stringent measures to ensure uninterrupted and safe power supply during the rainy season. “Dozens of people were electrocuted during last year’s Monsoon season and the same situation may happen this year as well because no safety measures have been adopted so far hence K-Electric’s management must take up this matter on priority and devise effectively strategies to save precious lives in case the city undergoes torrential rains”, he added.

    Agha Shahab requested Prime Minister Imran Khan, Governor Sindh Imran Ismail, Chief Minister Sindh Murad Ali Shah and other concerned ministers at the Federal and Provincial levels to review the situation and issue strict directives to K-Electric to improve its infrastructure and ensure uninterrupted power supply to public and also the business and industrial community who are already suffering terribly because of the outbreak of coronavirus pandemic.

  • KCCI declares policy rate cut insufficient

    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.

  • KCCI submits recommendations to rectify anomalies in Finance Bill 2020

    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

    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.

  • Hafeez Shaikh assures business community of presenting relief budget

    Hafeez Shaikh assures business community of presenting relief budget

    KARACHI: Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue, has said that the upcoming budget 2020/2021 will be a relief budget and most of the recommendations of business community will be adopted in the budgetary measures to be announced by the government on June 12, 2020.

    These assurance was given in a meeting held on Monday via video link between the KCCI’s team led by Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli with the advisor to deliberate on the proposals of KCCI for the Federal Budget 2020-21.

    On KCCI’s side, Siraj Teli was accompanied by President KCCI Agha Shahab Ahmed Khan and Former Senior Vice President Ibrahim Kasumbi.

    Officials of the Finance Ministry and Chairperson Federal Board of Revenue Ms. Nausheen Jawed were also present at the meeting which lasted for more than 40 minutes.

    In his opening remarks, President KCCI Agha Shahab Ahmed Khan stated that the budget for the year 2020-2021 is being prepared at a time when the country is facing an unprecedented crisis due to Covid-19 pandemic and every business and industry has been badly affected.

    In these extraordinary circumstances, people of Pakistan in general and the business community in particular are looking forward to a budget which provides substantial relief measures to rescue the economy from the brink of disaster.

    Chairman BMG Siraj Teli highlighted major macroeconomic issues during the meeting and elaborated on the measures which KCCI has recommended to rescue the trade and industry from devastating impact of a global economic meltdown caused by the spread of Covid-19 pandemic.

    He reiterated that today the Name of the Game is survival of trade and industry which should be on top priority in the budget rather than the revenues.

    Revenues can be recovered later only if the trade and industry survives hence the budget should focus on relief through these macroeconomic measures.

    He said that the domestic economy, which contributes 92 percent to the GDP and provides bulk of employment and revenues, has not received the much needed relief and financial assistance.

    He appreciated the reduction in prices of Petroleum products which was earlier proposed by KCCI and also the financial assistance given to the poor segment of population through Ehsaas program which provided much needed relief to the people.

    Siraj Teli proposed that an across the board reduction of 50 percent in the rates of all Taxes including Income Tax, Sales Tax, FED and Customs duties on capital goods and raw materials should be announced in the Budget for one year.

    Further, he suggested that rates of Electricity and Gas should also be reduced to half for at least one year to help revive the domestic economy. These measures may be reviewed when the economy shows improvement.

    Commenting on the incentive scheme announced by the government for Construction Industry, Siraj Teli urged the Advisor Finance that similar incentives should be announced across the board for all sectors.

    He stated that undocumented economy in Pakistan is twice the size of documented economy and a very large amount of capital is blocked in unproductive investments.

    He said that it would immensely benefit the economy to release the blocked capital and encourage investments into all sectors of industry and business.

    The unregistered persons in undocumented economy must be encouraged and allowed to get registered and become part of the documented economy.

    As an incentive, a policy be adopted that no questions will be asked for all such investments. In the present global crisis due to Covid-19 pandemic, no objections are likely to be raised by IMF, World Bank, G20 and FATF etc.

    It is therefore a good opportunity for Pakistan to unlock a huge untapped pool of capital.

    Siraj Teli further added that although the interest rates have been revised downward by the SBP from 13.25 percent to 8.0 percent, it is still not sufficient to stimulate the growth. Reduction in interest rates in piecemeal and installments does not provide the desired impetus to growth.

    To provide thrust the policy rate should be reduced to 4 percent in one go to stimulate growth and reduce cost of doing business.

    All major economies are taking extra-ordinary measures to reverse the decline due to Covid-19 pandemic through quantitative easing and interest rates are down to zero.

    In his presentation, Former Senior Vice President KCCI Ibrahim Kasumbi elaborated on various important proposals of the KCCI for the budget 2020-21.

    These proposals included rationalization of tariff and WHT on industrial raw materials and capital goods, expeditious disbursement on Income Tax Refunds and enhancement of the limit of Rs.5.0 million, prioritizing of refunds on the basis of aging of cases, removal of automobile and motorcycle spare parts from third schedule of Customs Act, reduction in rate of Sales Tax and removal of RD on smuggling prone items.

    In his response to the proposals and suggestions submitted by the KCCI item, Dr. Hafeez Shaikh said that despite the limitations of fiscal space, the Ministry of Finance has approved and adopted a significant number of KCCI’s proposals on the recommendation of the Federal Board of Revenue.

    He emphasized that the government is keen to stand by the business community in these difficult times and maximum relief will be provided in the budget of FY2020-21.  On the question of Income Tax refunds, Dr. Hafeez Shaikh stated that the Ministry of Finance is looking to enhance the amount of refund from Rs5.0 million up to Rs50.0 Million, depending on the available fiscal space.

    In her comments, Ms. Nausheen Jawed, Chairperson FBR informed the KCCI team that their proposals were duly considered and a number of important proposals have been accepted for inclusion in the budgetary measures for FY2020-21.

    Dr. Hafeez Shaikh thanked Siraj Kassam Teli and Agha Shahab Ahmed Khan for a productive meeting and participation of the KCCI team.

    He further assured that he will be available to discuss any issues and remaining anomalies after the budget has been presented in the parliament.

  • FBR urged to allow tax holiday on import of industrial raw material

    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.

  • KCCI urges government to shun pick, choose policy for business relief

    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.

  • FBR officials treat taxpayers as criminal using search powers

    FBR officials treat taxpayers as criminal using search powers

    KARACHI: Business community has resented the use of powers related to search by Inland Revenue officers and treating registered taxpayers as criminal.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 demanded amending such provisions to avoid such misuse of powers.

    The KCCI while highlighting provision Section 40 of Sales Tax Act, 1990, said that the officers of Inland Revenue at their discretion and opinion may obtain a warrant from the magistrate and conduct searches of the premises of registered persons at any time.

    The search made under sub-section (1) shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

    The chamber said that the officials are treating registered persons as criminals.

    Powers to enter and search any place gives immense powers to officers of Inland Revenue. Such powers can be misused for harassment and extortion of tax payers.

    The law also does not define the “place” which can be search, therefore it may include homes and personal residences of tax payers.

    The chamber proposed that the provisions should be amended to prevent misuse.

    “No searches should be made without prior notice in writing to the registered person. No searches may be conducted outside the working hours and holidays or immediately prior to holidays.”

    The proposed amendment shall alleviate fears of the business persons and it will also encourage new tax-payers and curtail discretionary powers.

  • Proposed powers for reopening past 10 years tax cases rejected

    Proposed powers for reopening past 10 years tax cases rejected

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday said it will oppose any move to grant powers to tax officials regarding opening cases of past 10 years.

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  • FBR recommended to reduce record retention period to three years

    FBR recommended to reduce record retention period to three years

    KARACHI: Federal Board of Revenue (FBR) has been recommended to reduce the time limit to past three years for retention of sales tax record.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, highlighted the issue of Section 24 of Sales Tax Act, 1990, which required retention of record and document for six years.

    The KCCI said that the long time period only allows the officers of Inland Revenue to blackmail and harass the tax payers by issuing demands from closed accounts as far back as 6 years.

    The negative impact of such provision is that the revenue officials spend more time in fishing for discrepancies in old records instead of focusing their efforts on broadening of tax base.

    The KCCI proposed that the period retention of record and documents be reduced to 3 years, which is an established practice worldwide for all financial transactions.

    Regional Tax Offices (RTOs) and officers will have to work more on identifying new tax-payers instead of fishing in old records and create demand.

    The period of 6 years is counter-productive for revenue generation and renders the RTOs inefficient.

    In this era of computerization where all the transactions of the registered persons are cross verified instantaneously by the FBR, and the audits are conducted without any delay, the period of maintenance of records and documents should be reduced from 6 to 3 years.