June 28 - July 04, 2004  
ISSUE # 26  

Pakistan after enjoying the status of best performing market for couple of years has slipped down to second position. The positive points of Federal Budget for 2004-05 were overshadowed by the imposition of CVT. It has become evident that now the investors will have to pay a tax, though, may be marginal. The resistance against imposition of CVT was mainly due to fear of documentation. Baring the adverse impact of CVT the equities market is expected to remain vibrant due to improved corporate earnings.




BUDGET 2004-05
The fiscal measures initiated in the federal budget 2004-05, especially introduction of flat rate of GST, abolishing or reduction withholding tax and central excise duty, have started showing positive results as the prices of various essential items are coming down gradually.

This sounds amazing that an announcement in the federal budget regarding reduction in electricity tarriffs would be applied only on WAPDA while it will not be applicable on KESC regime. Although, only 58 paisas per unit was reduced for industrial consumers, 25 paisas were reduced for commercial consumers and only 10 paisa relief for the domestic consumers yet that is too high for WAPDA consumers while the KESC keeps a mum in this respect.