ECONOMIC TIMES OF PAKISTAN
Over 3 mn consumers receive inflated bills
Public gas utilities have charged inflated bills from 3.2 million consumers because of a change in consumer slabs introduced by the government of Pakistan Tehreek-e-Insaf (PTI) and manipulation of gas pressure factor in the case of domestic consumers. The application of high gas pressure factor has forced many honest consumers, who pay their bills regularly, to bear an additional cost of gas consumption. According to sources, 50percent of domestic consumers have been overcharged by applying the high pressure factor illegally. Normally, the high gas pressure factor is imposed on bulk consumers like industrial units and independent power producers (IPPs), but recently the gas utilities included it in the bills of domestic consumers, which caused a substantial increase in the cost of gas consumption for these consumers.
Earlier, an inquiry committee on inflated gas bills told Prime Minister Imran Khan, in its report submitted last month, that 30percent of gas consumers had been overcharged. The committee came to the conclusion after analysing data of 10,000 consumers where it found that 30percent of consumers had been overcharged by applying the high gas pressure factor during winter.
Prime Minister-adviser to attend investment forum in Qatar
Adviser to Prime Minister on Commerce, Industry and Investment Abdul Razak Dawood and Board of Investment Chairman Haroon Sharif are heading to Qatar to attend the Pakistan-Qatar Investment Forum, which will be held on March 10. The event is being organised by the Board of Investment in collaboration with Qatar Finance Centre and the Embassy of Pakistan in Doha. It is a follow-up to PM Imran Khan’s visit to Qatar in January 2019. The event will be attended by prominent businessmen and investors from Qatar, who are interested in investing in multiple sectors.
During the visit in January 2019, PM Khan, along with his delegation, met his counterpart and Qatari businessmen and also addressed Pakistani community in the Gulf Arab nation.
Border tensions remain, cost of air travel surges
The partial closure of airspace for commercial flights in Pakistan and India due to tense situation on the border has jacked up the cost and duration of flights massively.
Airspace on the eastern side of Pakistan has remained closed for commercial flights, forcing airlines to fly through the western airspace. Alternative routes are quite longer than the original ones. Consequently, the duration and cost of flights have surged significantly. To cope with the situation, some airlines have partially passed the high cost of air travel on to passengers while others are considering doing so. The duration of domestic flights has increased by 30 to 60 minutes each,” Pakistan International Airlines (PIA) spokesman Mashood Tajwar told on Friday. “This is causing delay in the arrival and departure of other flights on domestic routes and for connected international flights as well,” he said. “The operation cost of a flight from Karachi to Islamabad has surged by over 30percent…due to the closure of airspace on eastern routes and airlines are using western routes,” Airblue Deputy Managing Director Commercial Raheel Ahmed said. The usual duration of air travel from Karachi to Islamabad is around two hours. These days, according to him, it takes an additional 50 minutes to reach Islamabad.
“We have increased airfare slightly to cope with the situation,” he said. “We are still bearing a large portion of the increased cost through revenue management. However, we have to (completely) pass on the increased cost as loss-bearing is not a sustainable solution.”
PKR strengthens against $
The rupee strengthened against the dollar at Rs138.5/Rs139 in the inter-bank market on Friday compared with Thursday’s close of Rs138.6/Rs139.1, according to forex.pk. Last year in November, the rupee fell to an all-time low at Rs144 against the dollar in intra-day trading before recovering to Rs139.05 in the sixth round of devaluation since December 2017. Cumulatively, the rupee has lost 31.8percent of its value in the last 13 months. In October 2018, a slump in the value of the rupee came after the government decided to knock at the International Monetary Fund’s (IMF) door to avoid default on import payments and debt repayments. The central bank said economic data showed that the positive impact of recent stabilisation measures had started to emerge gradually.
SPI increases 1.16pc
The Sensitive Price Indicator (SPI) for the week ended March 7, 2019 registered a rise of 1.16percent for the combined income group, going up from 245.45 points in the prior week to 248.29 in the week under review. However, the SPI for the combined income group surged 11.72percent compared to the corresponding week of previous year. The SPI for the lowest income group also increased 1.08percent compared to the previous week. The index for the group stood at 227.67 points against 225.23 in the previous week, according to provisional figures released by the Pakistan Bureau of Statistics (PBS). During the week, average prices of 24 items rose in a selected basket of goods, prices of five items fell and rates of remaining 24 goods recorded no change.
FBR reforms to bring additional people in tax net
Welcoming Prime Minister Imran Khan’s remarks about reforming the Federal Board of Revenue (FBR), Karachi Chamber of Commerce and Industry (KCCI) President Junaid Esmail Makda has said that businessmen as well as the overall industrialist community are fully backing the premier’s moves. A day ago, PM Khan had warned the FBR that he would establish a new tax collection authority if the existing revenue board failed to improve its affairs and eliminate corruption. Improvement must continue to be made in the FBR without any pause in order to transform it into a friendly organisation for taxpayers, Makda suggested in a statement issued on Friday. “Either in the existing or the new revenue authority, there is a dire need to create trust,” he stressed. “Corruption has to be eradicated completely by immediately expelling corrupt officers.”
Pak may benefit as us scraps duty-free status for India
Pakistan is ready to capitalise on the opportunity that emerged following US withdrawal of special duty benefits for around $5.6 billion of Indian goods imports under the Generalised System of Preferences (GSP), a senior official of the Ministry of Commerce and Textile said. On March 5, the United States decided to withdraw the import duty benefits for India, which ranged from 1percent to 6percent under its GSP programme. Talking to APP on Thursday, the senior ministry official said, “the US provides GSP status to 121 developing countries including India, Afghanistan and Botswana for non-reciprocal and duty-free imports of certain products. “Around 2,000 Indian products were enjoying duty-free status prior to the US announcement.” The senior official revealed that the US and Pakistan would discuss the matter in the upcoming meeting on the Trade and Investment Framework Agreement in the current month, during which different trade-related issues would be taken up. Responding to a question, he disclosed that both sides would negotiate on possibilities of a free trade agreement (FTA) for enhancing bilateral trade. Replying to another question, he pointed out that Pakistan was already enjoying GSP Plus facility from the European Union. “The EU is a large trading partner of Pakistan which has provided the GSP Plus facility worth $700 million annually,” said the official.
Media persons, sportsmen, real estate tycoons in FBR’S hunt list
The government has included media persons, sportsmen and real estate tycoons in its hunt list of top tax evaders amid increasing pressure on the Federal Board of Revenue (FBR) to give quick results to address one of the biggest issues of Pakistan’s economy – the yawning budget deficit.
The Chief Commissioners of Inland Revenue Service (CCIR) Conference, a gathering of heads of all field formations of the FBR, on Thursday deliberated over the cases of high-profile tax evaders. The meeting had been convened three weeks after Prime Minister Imran Khan directed tax officers to go after big tax dodgers.
It has been decided to pick top 100 cases from every Regional Tax Office (RTO) and Large Taxpayers Unit (LTU), which will expand the final list to 2,400, according to FBR officials. These 2,400 people are politicians, celebrities, sportsmen, media persons and real estate tycoons, according to the FBR. The chief commissioners’ conference was held on a day when the prime minister once again warned that he may dissolve the FBR due to its extremely poor performance. Addressing a gathering of chambers, PM Khan said he may set up a new organisation if the FBR did not improve its affairs.
The FBR has been constantly under pressure after the PTI came to power last year. The premier, behind closed doors, has grilled the top FBR management for its poor performance.
Govt plans to sell state lands to pay off debt
The federal cabinet has allowed selling of state land to pay off the government’s ballooning debt that has already crossed over Rs27 trillion. However, capacity constraints of the Ministry of Privatisation and rigorous regulations may slow down the sell-off process. While chairing the federal cabinet meeting, Prime Minister Imran Khan directed to set up an Asset Management Cell at the Privatisation Commission aimed at fast-tracking the process to sell the real estate assets, according to the officials who attended the meeting.
It will be for the first time since its creation about 30 years ago that the Privatisation Commission will sell real estate that is owned by the federal government ministries and departments at a large scale.
It may be a risky venture, as valuation and assessment of government land and buildings would not be an easy task at a time when bureaucracy remains cautious due to the National Accountability Bureau (NAB).
Senate panel suggests abolition of third tax tier for cigarettes
A parliamentary panel has recommended the withdrawal of third tier of the taxation system for the tobacco industry, which has resulted in an annual loss of Rs33 billion to the national exchequer. The Public Accounts Committee (PAC), on May 23, 2018, had recommended a special audit by the Auditor General of Pakistan (AGP) of a significant drop in tax collection from the cigarette manufacturing industry.
The AGP, in its report, found that the cigarette manufacturing industry was involved in tax evasion of Rs33 billion. It revealed that a multinational company included its popular brands in the lowest tax tier, which led to increase in its sales and 50percent reduction in tax payments.
With the approval of the house, the Senate chairman formed a special committee of the upper house, headed by Senator Kalsoom Parveen and tasked with examining the decline in tax collection from the cigarette industry and making recommendations to the Senate.
The previous Pakistan Muslim League-Nawaz (PML-N) government introduced the third tax tier in 2017. It suggested that a systematic increase in federal excise duty (FED) should be made on an annual basis to comply with the World Health Organisation (WHO) rules. It will result in higher revenues for the government as well.