Day: December 17, 2021

The Federal Tax Ombudsman has proposed disciplinary proceedings against 17 officers of the Federal Board of Revenue (FBR) involved in malpractices.

According to a handout, FTO Dr Asif Mahmood Jah chaired a meeting of the Advisory Committee to discuss measures to improve taxpayers’ facilitation through early redressal of issues raised by traders, the public at large, international investors and corporations.

While speaking in the meeting, the FTO explained the mandate and functions of the Advisory Committee. He informed that in a number of complaints, the issues raised by the complainants were resolved on telephonic discussion or by forwarding SMS to the relevant tax functionaries under the FBR, by exercising the powers under Section 33 of the FTO Ordinance, 2000.

Dr Jah informed that the recommendations have been issued to the FBR for resolution of refund-related issues raised by the members of Rawalpindi Chamber of Commerce & Industry.

He said that interns will be appointed for a door-to-door campaign for taxpayers’ awareness of the FTO office and facilitation at their doorstep. Dr Jah added that since he joined as FTO, the number of complaints registered on average has gradually increased as compared to previous months which shows that confidence of the taxpayers has increased in the FTO office.

He said that the suggestions and recommendations to improve the tax system and resolution of taxpayers’ grievances, provided by the members of the committee, will be warmly welcomed. He added that the FTO Office is the only institution, which provides cost-free and transparent justice within days.

Dr Jah said that the FTO office will try to conduct meetings of the Advisory Committee on a quarterly basis.

The advisory committee members lauded the performance of FTO and stressed the need to share FTO’s publications in Urdu language to promote tax awareness.

The participants, that included heads of various trade bodies, discussed a number of issues and appreciated the FTO for providing a listening ear to the complainants.

Source: Pro Pakistani

The Economic Coordination Committee (ECC) of the cabinet on Friday approved the Rs. 106.1 billion Ehsaas Targeted Commodity Subsidy Program (ETCSP).

The ECC meeting presided over by Minister for Economic Affairs Omar Ayub Khan discussed the summary titled “Launch of the Ehsaas Targeted Commodity Subsidy Program (ETCSP)” presented by the Poverty Alleviation & Social Safety (PASS) Division and approved it after due deliberations.

The total amount of this program is Rs. 106.102 billion for the period of 1st January to 30th June 2022, which includes a subsidy for beneficiaries, incentives for kiryana stores, SMS charges for telecom operators, mobilization charges, National Bank of Pakistan (NBP) costs, and other operational expenditures.

It was highlighted that in pursuance of the cabinet decisions, extensive efforts were undertaken including field visits, market surveys, and meetings with local shop owners/Tajir associations in dozens of cities across the country.

In addition, wide-ranging consultations were held with relevant provincial and federal stakeholders. Resultantly, the program design document has been amended to ensure compliance with the cabinet decisions and address the concerns of stakeholders. Further, the PASS Division and National Bank of Pakistan have also started mobilization efforts for beneficiaries and merchants’ registration.

In order to implement this program, PASS Division will enter into a memorandum of understanding (MoU) with NBP for this purpose and will reimburse all relevant costs incurred by NBP on a monthly basis subject to an independent audit and authorization by the program steering committee.

PASS Division will hire one of the top accounting firms as an external auditor to review all transactions (subsidy and vendor payments) processed on monthly basis; The three items covered under the program are essential commodities with inelastic demand, therefore, adoption of local prices will be allowed for the disbursement of the fixed per unit subsidy.

According to the Kiryana Incentive Scheme, target kiryana stores are located in communities with an average monthly income of less than Rs. 30,000 per family. Hence, 8 percent of subsidy value as an incentive for kiryana stores (Rs. 12 per transaction, assuming an average transaction value of Rs. 500) will be allowed.

Source: Pro Pakistani

The Advisor to the Prime Minister on Finance and Revenue, Shaukat Tarin, met with the Chairman of the All Pakistan Car Dealers and Importers Association (APDA), Mian Shoaib Ahmed, at the Finance Division.

Chairman Ahmed apprised the Advisor that car dealers and importers in Pakistan are facing various problems, especially related to the imports of cars, and sought the support of the government for the addressing of these issues.

Advisor Tarin commended car dealers’ contribution to Pakistan’s economic progress of the country and said that the government is very supportive of adopting all the measures that can boost economic activity, generate employment, and facilitate the expansion of business activities in the country.

He took a keen interest in the APDA’s issues and assured the delegation of the provision of maximum support, and the resolution of their concerns. Besides this, Advisor Tarin urged the delegation to contribute the maximum for Pakistan’s economic stability and growth.

Towards the end of the meeting, the Chairman of the APDA thanked Advisor Tarin for providing support and addressing the APDA’s grievances.

The federal Minister for Industries and Production, Makhdoom Khusro Bakhtiar; the Adviser to the Prime Minister on Commerce and Investment, Abdul Razak Dawood; the Secretary of Commerce; a member of the Federal Board of Revenue (FBR); and senior officers attended the meeting.

Source: Pro Pakistani

To curtail the gas crisis, Pakistan must prioritize the expansion of existing terminals under the approved Third-Party Access (TPA) rules on an immediate basis while eventually transitioning towards onshore terminals for greater energy security.

Highlighting the achievements of Engro Elengy Terminal (EETL), Yusuf Siddiqui, CEO of EETL, shared that EETL has set new industry benchmarks in over five years of its safe and essentially non-stop operations, with an availability factor of around 98 percent. EETL now contributes around 15 percent of gas supplies to Pakistan and can be considered the country’s largest “gas field” (630-690 mmscfd).

As the most utilized regasification terminal in the world, it has enabled Pakistan to save more than $3 billion through import substitution of furnace oil. Since its inception, EETL has achieved send-out of more than 1200 billion cubic feet (BCF) of RLNG/natural gas. Further, its partnership with world-class organizations like Royal Vopak of the Netherlands has brought global expertise and foreign investment to Pakistan for the development of the LNG sector.

He stated that LNG imports, which now constitute around 30 percent of the total gas supply mix, have been instrumental in bridging the energy shortages as the production of indigenous gas continues to decline drastically.

To mitigate the gas shortfall in the future, the government has adopted a favorable policy of encouraging private sector involvement in the LNG sector, but there is a need to remove any roadblocks that impede operationalization of additional capacity of existing LNG terminals under TPA rules, as allowed under the LNG Policy 2011 and LNG Supply Agreement (LSA) with SSGC. The TPA will allow private players to have access to the terminal capacity and bring LNG into the country, with no guarantee or liability required by the government or state-owned entities. This step will facilitate LNG market development as a whole and mitigate circular debt in the gas sector.

While the expansion of existing terminals offers a short-term and quickest possible solution to bridge the supply-demand gap, Pakistan must eventually shift its focus from FSRU-based terminals to onshore LNG terminals. Based on global experience, Yusuf stated that the deployment of the first or second FSRU is followed by an onshore terminal to ensure energy security, the longevity of the gas market, and the creation of a strategic national asset for the country.

With an expected capital outlay of $500-600 million, Engro Corporation and Royal Vopak are evaluating the development of Pakistan’s first multi-functional onshore LNG terminal that will offer regasification, bunkering, and LNG trucking services. If approved, the project will be built in a phased approach on the open-access terminal concept. The onshore terminal would result in reduced foreign exchange outflow compared to FSRUs, create greater market competition, and help optimize the LNG supply chain.

Source: Pro Pakistani

The government has set an ambitious target to take Pakistan’s exports of textiles and apparel industry to a whopping $40 billion by FY25.

ProPakistani has gained exclusive access to the Draft Textiles and Apparel Policy, 2020-25, approved by the Economic Coordination Committee (ECC) of the Cabinet on Thursday.

Value addition for each segment of the supply chain is a central goal of the policy, the result of which will be export projections of $20 billion for FY22, $25 billion for FY23, $31 billion for FY24, and $40 billion for FY25.

The policy outlines a 24-point incentives agenda for the textiles and apparel industry. Some of the key incentives proposed under the policy include the uninterrupted supply of electricity and gas/RLNG to the export-oriented units at regionally competitive rates throughout the policy years without any disparity among the provinces. For FY22, electricity will be provided at nine cents per kwh all-inclusive, and RLNG at $6.5/MMbtu all-inclusive.

The Long Term Financing Facility (LTFF) and Export Financing Scheme (EFS) rates will be continued at five percent and three percent respectively during FY22. Furthermore, a review of the LTFF and refinancing scheme for small and medium enterprises (SMEs), indirect exporters, and building costs will be included.

A brand development and acquisition fund will be launched and the Karachi Garment City Company (KGCC) will be revitalized under the policy. Additionally, a mass-level training program, especially for industrial stitching, will be launched for women in particular.

The e-commerce policy that is being implemented is also expected to provide open access to textiles and apparel manufacturers and exporters to tap the available business opportunities across the globe.

The State Bank of Pakistan will allocate sufficient funds for the LTFF and the EFS. Moreover, textiles and apparel machinery, spare parts, accessories, and dyes and chemicals will also be included in its schemes.

The government will establish state-of-the-art infrastructure having an electricity and steam generation system backed by the combined effluent treatment and water recycling plants to reduce the cost of manufacturing.

It will develop new garment cities for SMEs to have plug-and-play buildings in a number of cities including Sialkot, Sahiwal, Multan, and Hyderabad. More state-of-the-art buildings will be added, and buildings and procedures for rent will be designed in accordance with the SMEs in the existing garment cities. Additionally, expo centers will be developed in Sialkot and Multan under the policy,

The government will also allow back-to-back letters of credit (LCs) to boost value-added exports, and expects them to become the basis for development and provide a launchpad to SMEs.

It will also provide tax exemptions, free spaces, and other incentives for international buying houses to open offices in Pakistan, and will hold annual textiles and apparel exhibitions in Pakistan and other countries.

The duty drawback scheme (DLTL/DDT) will be continued for technical textiles, apparel, and made-ups. Moreover, diversification within products and markets will be offered an additional duty drawback.

The textiles and apparel machinery which has been customs duty-free since the first Textiles Policy will be continued, and the customs duty on spare parts that are not manufactured locally will be made zero.

The Ministry of Commerce will consult with the SMEs and large-scale industries to review federal, provincial, and other organization-based taxes/cess, and will provide recommendations to the government to rationalize them to reduce the cost of manufacturing. Similarly, federal taxes will be reviewed jointly with the Federal Board of Revenue.

Tax credit for investment under 65B of the Income Tax Ordinance, 2001, will be restored, and the import tariffs of accessories, dyes, and chemicals utilized by the textiles and apparel value chain will also be rationalized.

Challenges

The policy underlines the restoration of the profitability of cotton farmers as a major challenge. Product diversification is another serious challenge that can hinder achieving the targets set under the policy.

The lack of foreign direct investment in textiles and apparel is another major challenge. The government expects the favorable China-Pakistan Free Trade Agreement-II and the development of Gwadar Port and projects under the China-Pakistan Economic Corridor (CPEC) to help attract investment in the sector.

The policy document highlights the looming challenge of the textiles and apparel sectors’ demand for the restoration of the zero-rating regime, and the release of delayed refund payments by the government. It details that these measures are crucial for the enhancement of the capacities and production of exporters.

The document also mentions that the targets will only be realized with long-term commitments from the federal government and the full fiscal support of the Finance Division.

Source: Pro Pakistani

Petroleum group imports witnessed an increase of 112.33 percent as they reached $8.379 billion in July-November 2021 compared to $3.946 billion during the same period of the last fiscal year, says the Pakistan Bureau of Statistics (PBS).

The exports and imports data released by the PBS revealed that petroleum group imports registered 36.04 percent growth in November 2021 and remained $2.182 billion, compared to $1.604 billion in October 2021. On a year-on-year basis, petroleum group imports registered 180.55 percent growth compared to the same month of 2020.

Construction and mining machinery imports witnessed a growth of 42.32 percent during the July-November period and remained at $67.43 million, compared to $47.37 million during July-November 2020.

The construction and mining machinery imports registered 99.10 percent growth on a year-on-year basis and remained $16.963 million in November 2021, compared to $8.520 million in November 2020. The imports in this group registered 43.24 percent increase on a month-on-month basis when compared to $11.842 million in October 2021.

The country’s textile group exports witnessed 28.41 percent growth during the first five months (July-November) of the current fiscal year and remained $7.758 billion, compared to $6.041 billion during the same period of the last fiscal year.

The textile group exports on a month-on-month basis witnessed 8.45 percent growth and remained $1.736 billion in November 2021 compared to $1.6 billion in October 2021.

On a year-on-year basis, textile group exports witnessed 35.33 percent growth in November 2021, when compared to $1.282 billion in November 2020.

Cotton yarn exports registered a growth of 65.45 percent during July-November 2021 and remained at $503.897 million compared to $304.553 million during the same period of last year. The exports in this group increased by 47.03 percent in November 2021 and remained $109.133 million when compared to $74.224 million during the same month of last year. Raw cotton exports witnessed a 100 percent decline on a month-on-month basis as well as on a year-on-year basis.

The country’s exports during July-November 2021 stood at $12.364 billion (provisional) against $9.744 billion during the corresponding period of last year, showing an increase of 26.89 percent.

The country’s exports in November 2021 stood at $2.903 billion (provisional) as compared to $2.464 billion (provisional) in October 2021 showing an increase of 17.82 percent and a 33.72 percent increase as compared to $2.171 billion in November 2020.

The country’s imports during July-November 2021 stood at $33.012 billion (provisional) as against $19.468 billion during the corresponding period of last year showing an increase of 69.57 percent.

The imports in November 2021 stood at $7.928 billion (provisional) as compared to $6.369 billion (provisional) in October 2021 showing an increase of 24.48 percent and an 84.72 percent increase as compared to $4.292 billion in November 2020.

The country’s trade deficit widened by 112.34 percent from $9.724 billion in July-November 2020 to $20.648 billion in July-November 2021. The trade deficit widened by 136.92 percent in November 2021, and remained $5.025 billion compared to $2.12 billion in November 2020.

Main commodities of exports during exports during November 2021 were knitwear (Rs. 79,221 million), readymade garments (Rs. 56,877 million), bed wear (Rs. 54,516 million), cotton cloth (Rs. 35,444 million), rice others (Rs. 29,203 million), cotton yarn (Rs.18,883 million), towels (Rs.18,217 million), madeup articles (excl. towels & bedwear) (Rs.14,560 million), rice basmati (Rs.10,872 million) and fish & fish preparations (Rs.9,364 million).

Main commodities of imports during November 2021 were petroleum products (Rs. 218,224 million), medicinal products (Rs.119,194 million), petroleum crude (Rs.75,456 million), natural gas liquified (Rs. 72,372 million), palm oil (Rs. 67,478 million), plastic materials (Rs. 51,515 million), iron & steel (Rs.48,005 million), iron & steel scrap (Rs.47,603 million), mobile phone (Rs.36,691 million) and electrical machinery & apparatus (Rs. 32,400 million).

Source: Pro Pakistani

Eyeing its expansion in the region, Global Message Services (GMS), an international messaging service provider, has officially registered a legal entity in Pakistan, GMS Pakistan, to improve its operations and service quality and bolster technological advancements.

The new entity, GMS (Pakistan) (Private) Limited, is not only an important step toward strengthening links with clients and partners across the country, but also developing new partnerships in the local market. It will allow GMS to improve its operations, service quality, and bolster technological advancements.

The company’s Director Enterprise Business Middle East & Asia Region, Junaid Ahmed, said, “Registering a legal entity and expanding our staff presence in Pakistan supports our global expansion plans to meet growing demand from both Enterprise and MNO customers for cutting-edge messaging solutions. Being closer to our clients allows us to provide superior service in real-time. We also look forward to building on our presence and further expansion in the Middle East, as well as Asia”.

Under its latest spread of investments tailored in accordance with the blooming trends of the local market, GMS Pakistan will now aim to offer safe and transparent traffic routing for mobile operators and a broad audience reach for enterprise clients.

Headquartered in Baar, Switzerland, GMS has four regional offices across the world. It is an enterprise solutions operator providing international messaging services for mobile carriers and companies worldwide for A2P [application-to-person], P2P [person-to-person], P2A [person-to-application], and RCS [Rich Communication Services] traffic exchanges.

The company’s CPaaS solutions empower businesses all over the world to engage their customers with personalized and interactive content provided over SMS, Push, Viber, WhatsApp, and RCS. It assists business partners and clients who aspire to grow. It offers comprehensive knowledge of local and worldwide markets, as well as high-quality and prepackaged solutions that are tailored to each client’s demands.

Source: Pro Pakistani