ECONOMIC TIMES OF PAKISTAN
High tax burden leads to closure of industry
Textile exporters have lamented that they have been burdened with several taxes including 17percent general sales tax (GST) due to which the textile industry of Faisalabad has mostly been shut down. During a meeting of the Senate Standing Committee on Textile, the exporters criticised business policies of the government and maintained that it had made the refund claim form extremely difficult so that no one could fill it properly. The committee met on Thursday with Senator Mirza Muhammad Afridi in the chair. During the meeting, Senator Shibli Faraz revealed that imports of information technology (IT) products were being subjected to under-invoicing, which was paving the way for money laundering. He suggested that it should be made mandatory for the importers of IT accessories to furnish original documents of their shipments. “About $400-500 million is being laundered under the garb of IT imports through under-invoicing while the FBR is facing an annual loss of Rs8-9 billion,” he said.
Govt projected to add PKR 19.3tr to public debt in 5-year
The Pakistan Tehreek-e-Insaf (PTI) government is projected to add Rs19.3 trillion to the public debt in its five-year term – which will be equal to 80percent of the debt piled up in the past 71 years, and the debt will remain at unsustainable levels, showed figures of the Ministry of Finance. The public debt, which was at Rs24.2 trillion or 72.1percent of gross domestic product (GDP) at the end of Pakistan Muslim League-Nawaz (PML-N) government’s term, would surge to Rs43.5 trillion or 70.1percent of GDP by 2022-23, showed the figures that the Ministry of Finance shared with the National Assembly Standing Committee on Finance. There will be an increase of Rs19.3 trillion or 80percent in the public debt during the five-year term as compared to the debt level left behind by the PML-N. Although the public debt appears high at Rs43.5 trillion or 70.1percent of GDP, the actual debt may even cross the projected threshold because the Ministry of Finance has used very conservative estimates of budget deficit and debt servicing cost. There could be at least 80percent increase in public debt from fiscal year 2018-19 to 2022-23 despite the Ministry of Finance showing, on an average, only 2.7percent increase in interest payments during the remaining four years of the government.
Egyptian companies keen to invest $1 bn in Pakistan
Prime Minister Imran Khan has welcomed the interest shown by Egyptian companies in investing $1 billion in Pakistan, saying the government will fully facilitate Egyptian investors and entrepreneurs so that they could carry out profitable trade activities in the country. Talking to a delegation of Egyptian traders, the prime minister said there was a huge potential for translating the existing Pakistan-Egypt brotherly relations into stronger economic ties. He called for promoting bilateral cooperation between Pakistan and Egypt at all levels in order to tackle the common challenges faced at the international level. Appreciating the services of Egypt’s Jamia Al-Azhar, PM Imran said in order to tackle the challenges faced by Islam, there was a need to further promote cooperation among Muslim countries in the area of education. Highlighting Pakistan’s new energy policy, he said the government had strived to promote renewable energy, adding that the interest shown by Egyptian companies in that respect was encouraging. The prime minister also stressed the need for enhancing cooperation between Pakistan and Egypt in the area of healthcare. Members of the Egyptian delegation, while expressing their confidence in the government’s business-friendly policies, said Egyptian companies were keen to invest in Pakistan’s housing, energy, health care and other sectors.
Punjab to launch ePay mobile app
The Punjab government is set to launch ePay, a mobile application, on Friday for all business-to-government (B2G) and public-to-government (P2G) payments in order to facilitate the public and improve country’s revenue collection through easy payment solution. The application has been jointly developed by the Punjab Finance Department and the Punjab Information Technology Board (PITB), said Provincial Finance Minister Makhdoom Hashim Jawan Bakht while chairing a meeting on Thursday. The application would allow citizens of Punjab to pay taxes using three different electronic payment channels namely internet/mobile banking, ATM and through over the counter (OTC) banking transaction. The application will also allow citizens of Punjab to generate a 17 digit unique PSID number that can be used to pay the necessary taxes.
SBP reserves dip $ 724 mn to $ 7.7bn
The foreign exchange reserves held by the central bank plunged 8.54percent on a weekly basis, slipping below the $8-billion mark, according to data released by the State Bank of Pakistan (SBP) on Thursday. Earlier, the reserves had spiralled downwards, falling below the $7-billion mark, which raised concern over Pakistan’s ability to meet its financing requirements. However, financial assistance from the United Arab Emirates (UAE), Saudi Arabia and other friendly nations helped shore up the foreign exchange reserves. On September 27, the foreign currency reserves held by the SBP were recorded at $7,741.6 million, down $723.7 million compared with $8,465.3 million in the previous week. The decline in reserves was on account of debt repayments by the government, the SBP added. Overall, liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $15,003.7 million. Net reserves held by banks amounted to $7,262.1 million.
Sales of oil products drop to six-and-a-half-year low in Pakistan
Sales of petroleum products dropped to a six-and-a-half-year low at 4.42 million tons in the quarter ended September 30, 2019, as a contraction in industrial output, mainly in the auto industry, and shift to re-gasified liquefied natural gas (RLNG) from furnace oil in power generation dented demand. “Quarterly sales in absolute terms came in at 4.42 million tons in the first quarter (July-September) of the current fiscal year 2019-20, which was the lowest in the past 26 quarters,” Topline Securities’ analyst Shankar Talreja said on Wednesday. Moreover, this is the eighth successive quarter in which oil sales have continued to fall in the country. Oil sales recorded a fall of 13percent compared to the same quarter of last year. A major decline was witnessed in sales of furnace oil and high-speed diesel to the extent of 29percent and 16percent respectively.
Pakistan’s it sector to quote prices in dollars for foreign clients
Major players in the information technology (IT) sector of Pakistan have decided to quote prices in US dollars for foreign clients considering the hefty rupee depreciation in the past one year. A letter has been circulated by top players of the IT industry including JBS, Premier Systems, Silicon Technologies, IBL Unisys, Infotech and Abacus Consulting and they have sent it to their customers as well, informing them about the change. “IT industry has borne a massive loss while quoting prices in rupees,” said JBS CEO.
IT hardware and software in Pakistan are completely made up of imported goods, therefore, the industry faces problems when the rupee value fluctuates. When the rupee was stable, price quotations in rupees were affordable but last year, the currency dropped 35percent, which caused problems for the entire industry.
Turkish businessmen keen to form Pak-Turk joint ventures
Trade and economic relations between Turkey and Pakistan should be stronger and private sectors of the two countries could play a vital role in that regard, said Turkish Konya city, Governor Cuneyt Orhan. Speaking at the Lahore Chamber of Commerce and Industry (LCCI), the Konya governor said mutual trade volume could touch new highs with little effort. He pointed out that Turkish businessmen were keen to enter into joint ventures with their Pakistani counterparts in various fields. “Both countries should enhance cooperation in trade, industry, and tourism,” he suggested.
In Pakistan, cement sales rise 11.5pc in Sept
The cement sector posted growth for the first time in the current fiscal year in the month of September as total sales increased 11.51percent compared to the corresponding period of the previous year. According to data released by the All Pakistan Cement Manufacturers Association (Apcma), the cement industry sold 4.27 million tons of cement in September 2019 compared to 3.83 million tons in September 2018. Both domestic consumption and exports registered double-digit increases during the month. Domestic consumption rose 11.5percent to 3.47 million tons compared to 3.11 million tons in September 2018. On the other hand, exports went up to 0.798 million tons last month compared to 0.715 million tons in September 2018, an increase of 11.66percent. A major change noted so far during the current fiscal year was that consumption in the northern region of the country had started rising, which rose 22.4percent year-on-year to 3 million tons in September 2019. Consumption in the southern region remained dismal in the month under review, falling 30.48percent to 0.45 million tons compared to 0.64 million tons in September 2018. Cumulatively, in the first quarter of the current fiscal year, total cement sales amounted to 11.13 million tons, up 2.56percent compared to 10.86 million tons in the corresponding period of the previous year.