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Sep 12, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Tax relief for small traders, GST stays

The government has rejected the traders' demand to withdraw general sales tax or at least cut in the GST rate from 15 to 5pc but agreed to reduce the turnover tax from 3pc to 0.75pc for small retailers.

"The GST regime is very much in place and there is no question of withdrawing it", Finance Minister Ishaq Dar categorically stated.

He said that the 3pc turnover tax would be replaced by 0.75pc development tax.

"There are three parties involved in the new agreement—the government, the traders and Allah— and the retailers have assured us that they will pay this new tax in the spirit of Jihad."

Speaking at a news conference on Thursday at the end of the two-day talks with the traders, Mr Dar said that the levy of GST on importers, manufacturers and retailers with a turnover of over Rs5 million would remain intact and it would have to be paid at all costs.

Extensive talks were held between the traders representatives and the government team which included the finance minister, the chief ministers of Punjab and Balochistan, the Sindh governor, the prime minister's advisor on Sindh affairs and a representative of the NWFP's chief minister.

The focus of the talks, according to insiders, was to stop the traders from going on a three-day strike called for September 17-19.

"We are not violating any of the structural reform measures agreed with the IMF, therefore, there should be no any objection by the Fund over this relief to the small traders in the shape of new development tax", Mr Dar told.

The minister surprised everyone when he announced that the traders had been exempted from all kinds of checks by the CBR and other tax departments. He said the government had decided to constitute a committee which would supervise the collection of the new tax.

Rice exporters eying fresh arrivals

Pakistan rice prices were under pressure this week due to a lack of buying, and rising arrivals could further depress prices, dealers said.

They said exporters stayed out of the market as the early newcrop supplies were not suitable for export because of high moisture content, while they were also waiting for prices to fall to about 950 rupees per 100 kg from the current 1,400 rupees.

ECC cuts onion MEP

The Economic Coordination of the Cabinet (ECC) decided to reduce the minimum export price of onion from Rs 10 per kg to Rs 7 per kg.

The ECC, which was presided over by Minister for Finance Ishaq Dar took this decision on a report that indicated a bumper onion crop and consequendy a surplus of more than 300,000 metric tons of onion over the local consumption.

IDB offers direct access to Pakistanis

The Islamic Development Bank (IDB) has extended direct access facility to Pakistani exporters to avail its Export Financing Scheme.

According to a communique to all banks circulated by IDB through the State Bank of Pakistan (SBP) here Tuesday, the users of the scheme may submit their financing application to IDB Trade Finance & Promotion Department, Jeddah, Saudi Arabia.

The board of directors of IDB had recently approved modifications in the Export Financing Scheme making it easier and faster for the exporters and importers of member countries to avail the scheme.

The criteria for eligible goods has been enlarged by reducing the local content requirement from 40% to 30%. However, this relaxation on local content requirement is a temporary measures, subject to a review every three years.

KPT cargo handling up by 6.3pc

The handling of cargo by Karachi Port Trust (KPT) has increased by 6.3% to 24.052 million tons during '98-99, showing an increase of 6.3% over the last fiscal.

A press release said the Port handled 3,242 ships and the container traffic had gone upto 527,473 TEUs, showing an increase of 6.3% and 4.3% respectively over last year.

The KPT board of trustees was informed that the liquidity ratio had gone up from 6.83% in '97-98 to 8.15% in '98-99 and expenditure heads were reduced by 50%.

$200m cotton import: exercise in futility

The spending of about 200 million dollars on the import of cotton has turned into an exercise in futility as the prices of local cotton in the meantime have fallen by 30 percent.

While the government is eager to get 280 million dollar tranche from the IMF at all costs, the spinning sector has spent over 200 million dollars on the import of nearly one million bales of cotton without the hope of fetching a single dollar through export of its products.

ECC okays import of 0.5m tons wheat

The Economic Coordination Committee of the Cabinet (ECC) here on Saturday approved the import of 0.5 million tons of wheat in order to have sufficient wheat reserves level for local consumption.

The ECC, which was presided over by Minister for Finance and Commerce Ishaq Dar, while reviewing the wheat situation expressed its satisfaction at the stock position with more than 4.3 million tons of stock in the country as reported by ministry of food and agriculture.

Pakistani yarn prices fall in HK market

Pakistani cotton yarn prices on the Hong Kong market are steadily declining over the last about two weeks owing to dumping of the commodity by the major producers after steep decline in world cotton rates.

After ruling around 206 cents per kilo cotton yarn prices for 20-single f.o.b. Karachi, rose to 217.35 cents per kilo to fall again to 212.19 cents per kilo during the last week, showing a decline of over five cents per kilo, official figures released by the monitoring agencies reveal.

But prices of carded 20-single and 40-single to Japan, another major importer of Pakistani cotton yarn remained firm around 135.55 and 172.50 yen per lb c.i.f, industry sources said.