Pakistan-Belgium trade boosts to €900mn Euros
Bilateral trade between Pakistan and Belgium has increased to 900 million euros as Pakistan is a key beneficiary of the Generalised System of Preferences (GSP) Plus status that provides its businessmen trade opportunities in Belgium, said Belgian Ambassador Philippe Bronchain.
Meeting a business delegation, led by Rawalpindi Chamber of Commerce and Industry (RCCI) President Saboor Malik, the envoy said Pakistan should take full advantage of Belgium’s unique geographical position in the European Union.
He appreciated RCCI’s role in promoting trade ties and close cooperation through exhibitions and business conferences.
Bronchain emphasised that there should be further interaction between business communities, private sectors and chambers of commerce of the two sides to enhance trade and economic cooperation.
He assured his full cooperation and support for RCCI’s EU Summit and Business Conference in Brussels this year.
He pointed out that Belgium was cooperating with Pakistan in the fields of energy, infrastructure, textile, dairy, poultry and education, adding that a lot of Pakistani products had the potential to find good markets in Belgium.
Apart from that, the envoy said, academic cooperation was expanding with growing number of Pakistani students studying or doing research in Belgian universities as well as increasing number of partnerships between universities in Belgium and the Higher Education Commission of Pakistan.
Speaking on the occasion, the RCCI president said there was a need to increase cooperation and contact between chambers of commerce of the two sides to promote bilateral trade. He invited the ambassador to organise a Business Catalogue exhibition at the International Rawal Expo 2020.
Government may revisit decision to fill 129,000 posts
Days after the federal cabinet decided to fill over 129,000 vacant posts in the public sector, the government is giving a second thought to the decision due to its huge financial implication, source told.
Both, the Prime Minister’s Office and the Ministry of Finance are considering not implementing the decision, a source privy to these discussions revealed on Saturday.
The main reason for reviewing the decision is its financial implications on the budget and the already bloated size of the federal government.
Special Assistant to Prime Minister on Information Dr Firdous Ashiq Awan did not answer when asked if the government was giving a second thought to ten-day-old decision of the federal cabinet.
This month the PM’s Delivery Unit had given a presentation to the federal cabinet on status of recruitment rules, pending cases of seniorities, 129,301 vacant positions in the federal ministries and divisions and 1,623 pending disciplinary proceedings against bureaucracy.
About 3,459 vacant positions have to be filled through the Federal Public Service Commission.
Briefing media persons after the federal cabinet meeting, Dr Firdous had said no public sector employee would be removed as the government was committed to provide employment to the jobless, not to make them jobless. She said 2020 would be the year of jobs creation.
Punjab revenue authority to organize stakeholders’ body
The Punjab Revenue Authority (PRA) wants to form a committee having representatives from the Lahore Chamber of Commerce and Industry (LCCI) and other sectors to bridge the community gap, said PRA Chairman Zainul Abideen.
During a meeting between PRA and LCCI officials, Abideen said the proposed committee would hold regular meetings so that policy decisions could be made after due consultation with the stakeholders.
An application has already been launched to have direct liaison with the taxpayers.
He pointed out that there were a lot of developments for tax harmonisation between provinces, adding monthly meetings were being held among representatives of the provinces and they had agreed on some matters.
“A system is being designed under which a taxpayer will file a single return whether he is working in one or more provinces. An automatic system will decide tax segregation,” he said.
However, the PRA chairman added that the provinces were apprehensive that the system may affect ease of doing business reforms in the country, therefore, the system would be implemented sector-wise.
The telecom sector had been chosen for the first phase and the system was expected to start working in the current calendar year, he said.
Responding to a question, the PRA chairman said provincial tax was already being collected through online banking channels while credit and debit cards would also be available soon.
Abideen, however, was of the view that uniformity in sales tax in all provinces was difficult.
He insisted that the Punjab Infrastructure Development Cess could not be abolished but a middle ground could be reached after consultation with the stakeholders.
“Despite the economic slowdown, the PRA has performed well and has achieved 23percent revenue growth in first six months of the ongoing fiscal year,” he said.
Punjab tax authorities reject property survey statistics
Punjab’s tax authorities are unhappy with the outcome of a property valuation exercise five years in the making, source said. According to senior Punjab Excise and Taxation officials, the department’s field staff carrying out a survey of residential and commercial buildings in the province has been unable to collect adequate information to prepare a valuation table for new property tax rates. Subsequently, a departmental committee overseeing the exercise rejected the sample survey data as insufficient, they said.
The department has been surveying residential and commercial buildings across Punjab to track how rent amounts have changed from five years ago in order to update property tax rates. The exercise, under way since the beginning of January, also seeks to identify which property units should fall under the tax net.
On Thursday, the various focal officials appointed for carrying out the task submitted sample survey results for their respective divisions to a director-level committee constituted by Director General Excise Sohail Shehzad. Upon reviewing the sample data, the committee found it to be ‘inadequate and non-standard’.
“The samples presented to us in the meeting were not in line with the criteria prescribed for the survey,” said committee head Additional DG Excise Rao Shakeelur Rehman. “According to the sample, rents had risen in some areas and gone down in some – overall, it depicted a between 30percent and 35percent increase in rent – but no evidence to back up the data was presented with any sample,” he said.
After rejecting the samples, the committee members prepared a pro forma to be used by all officers carrying out the survey. Staff tasked with conducting the survey was also directed to collect rent data from at least 10 buildings in each locality area, along with copies of receipts or documents validating the rent amount being charged.
“We set a January 27 deadline for all directors to submit the final data. Once we have that information, recommendations for the valuation table will be proposed to the DG Excise,” Rehman said.
Exporters demand removal of surcharges on energy supply
The Pakistan Textile Exporters Association (PTEA) has expressed grave concern over the imposition of surcharges, taxes and fuel adjustment charges on power supply to the export-oriented sectors by the Power Division.
Terming it an anti-export move, PTEA Chairman Sohail Pasha said if the levies were not take back immediately, they would threaten Pakistan’s exports and discourage investment in capacity and capability.
“This unwarranted action will spark a crisis in the textile industry, which is delivering on its commitment to enhance exports,” he warned in a statement on Friday.
In January 2019, the government announced an all-inclusive tariff of 7.5 cents per kilowatt-hour (kWh) for the zero-rated export-focused sectors to reduce the production cost of export goods in a bid to secure competitive edge in the international market.
Quoting Economic Coordination Committee’s (ECC) decision, Pasha said it was agreed that the financial cost surcharge, Neelum-Jhelum surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment would not be collected from the zero-rated sectors.
“This resulted in a substantial increase in export volumes, however, barely a year later, the Ministry of Energy instructed the power distribution companies to charge add-ons and surcharges, raising the aggregate electricity cost to 13 cents per unit,” he regretted.
“How does the government expect exports, subjected to the tariff of 13 cents, to compete with those from India and Bangladesh, where the tariff is 7-9 cents per kWh, as well as China with tariff of 7.5-10 cents.”
He asked how the exporters would pay the difference in tariffs, which were imposed retrospectively, when it was not factored in the cost of export goods already sent abroad.
Foreign firms’ profit repatriation rises 18pc to $743.2mn in Pak
Foreign firms operating in the manufacturing and services sectors of Pakistan have managed to repatriate 18percent higher profits, which stood at $743.2 million, to their home countries in the first half (July-December) of ongoing fiscal year 2019-20.
The growth in repatriation of profits is, however, overwhelmingly dominated by a few sectors which include financial, transportation and oil and gas exploration. Majority of the other sectors sent comparatively lower profits like car manufacturing, beverages and petroleum refineries.
The repatriation of profits does not fully and truly reflect actual earnings of the companies in Pakistan.
Many of these firms may have held part of their actual profits in the country while others may have dispatched the previously held profits in the latest repatriation.
However, the sector-wise breakdown of repatriation of profit points to business growth and health under the ongoing economic reforms in the country. Foreign banks and insurance firms repatriated $124.2 million in the first half (Jul-Dec), which was more than double than the $60.8 million sent overseas in the same period of previous fiscal year, the State Bank of Pakistan reported on Thursday.
“The prevailing high interest rate (which is at an eight-year high of 13.25percent since July) has helped the financial business sector earn higher profit and dispatch enhanced amounts to the headquarters,” BMA Research Executive Director Saad Hashmi said.
Sindh seeks forbid on sale of substandard seeds
The Sindh government has demanded a halt to the sale of cotton and other commodities’ seeds coming from Punjab in the province.
Sindh Agriculture Minister Muhammad Ismail Rahu chaired a meeting between representatives of the All Pakistan Textile Mills Association (Aptma) and agricultural officials and called for slapping a ban on the sale of substandard seeds.
The minister pointed out that the federal government was required to examine and verify the seeds being imported but the provincial government would be forced to take action through a legal process if the Centre failed to restrict the use of adulterated agricultural seeds.
Rahu hinted that the seeds coming from Punjab to Sindh would first be checked at laboratories before being sold in the market.
“The federal government must initiate a crackdown on the dealers engaged in the trade as the provincial government cannot take action against agricultural companies registered with the Centre,” he stressed. “Had timely action been taken, there would have been no crisis of tomato, wheat, cotton and onion in the country.”
Questioning the seriousness of the federal government, Rahu asked how the government could run its affairs if it had not been able to formulate a mechanism for agriculture in one year and a half.
SBP reserves jump $146mn to $11.7bn
The foreign exchange reserves held by the central bank increased 1.26percent on a weekly basis, 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 January 17, the foreign currency reserves held by the SBP were recorded at $11,731.5 million, up $146 million compared with $11,586 million in the previous week.
The central bank cited no reason for the increase in reserves.
Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $18,271 million. Net reserves held by banks amounted to $6,539.5 million.
Pakistan received the first loan tranche of $991.4 million from the IMF on July 9 last year, which helped bolster the reserves. In late December, the IMF released the second loan tranche of around $454 million.
Previously, the reserves had jumped on account of $2.5 billion in inflows from China.
Over time, the declining reserves forced the central bank to let the rupee depreciate massively, sparking concern about the country’s ability to finance a hefty import bill as well as meet debt obligations in coming months.
A few weeks ago, the SBP successfully made a foreign debt repayment of over $1 billion on the maturity of Sukuk.
In December 2019, the foreign exchange reserves surpassed the $10-billion mark owing to inflows from multilateral lenders including $1.3 billion from the Asian Development Bank (ADB).