Pakistan Daily Economy Update - 30 April

Transcription

1. Apr . 29-30, 2018 KCCI - eBulletin Budget to fuel growth: Miftah Federal Finance Minister Miftah Ismail has said that the relief announced in budget FY19 will help increase the tax base, facilitate taxpayers and give an impetus to national growth. Speaking at a budget seminar, he said that the budget will expand the economy by more than 6%, facilitate taxpayers, and encourage growth of businesses, besides financially helping vulnerable sections of society. He said taxes in the real estate sector have also been rationalized in order to shun the undocumented economy and encourage people to declare the real worth of their properties. Miftah said taxes have been lowered but it has been made mandatory for people to become tax filers if they want to buy expensive property and cars. Regarding increasing the petroleum levy, the Minister said the govt. will pass on the benefit of reduction in international oil prices as it did in previous years. The Finance Minister also emphasized the importance of enhancing manufacturing in the country in order to reduce import bill. BR-Sun. Miftah rules out IMF bailout Finance Minister Dr. Miftah Ismail has said that the govt. has no intention to approach the IMF for another programme loan as economic measures including rupee depreciation, taken since Dec’17, have started delivering. Addressing a post-budget news conference, he reiterated his firm belief that foreign exchange reserves will increase by 30th Jun’18. Govt. measures taken include announcement of export package, imposition of Regulatory Duty on luxury items and depreciating the rupee twice have delivered and if these measures continue to deliver, there would be no need for another IMF program. On a question regarding increase in minimum wage, he said that it is a provincial subject. BR-Sun. Another $ 1Bn loan makes its way from China Desperate to boost foreign exchange reserves over the $ 11Bn mark, Pakistan has received another loan of $ 1Bn from China Development Bank out of an estimated $1.5Bn. In its revised estimates, Pakistan has budgeted about $ 2Bn injection from Chinese financial institutions alone. This includes $ 1.5Bn from the China Development Bank and $ 500Mn from the Industrial and Commercial Bank of China (ICBC). With the fresh injection, Chinese financial institutions have so far given $2.2Bn to Pakistan to help the country steer through difficult times. Earlier, the ICBC gave $ 1Bn at 3-month floating interest rate of Libor plus 3.02% while Bank of China has also given $ 200Mn. Tribune-Sun. Next govt. can amend budget: PM PM Shahid Khaqan Abbasi has said that the next govt. can amend budget FY19 presented by his govt. He said that his govt. had presented a people-friendly budget. Besides giving relief to different segments of the society, tax burden had been halved by bringing the maximum tax from 35% to just 15%. BR-Sun. Active taxpayers: late filers of returns will not be allowed to avail benefits Late filers of income tax returns would not be allowed to avail benefits of active taxpayers, as they would not be added in Active Taxpayers List of FBR even after filing of the returns. A new section 182A has been added in the Income Tax Ordinance 2001 through the Finance Bill 2018, which proposes that in case of late filing of return, the person would not be added in the Active Tax Players' list even after filing of the return. Moreover, losses for that year would also not be allowed to be carried forward. The bill also proposes to delete section 214D, whereby, cases of late filers are automatically selected for audit, owing to audit incapacity of FBR. However, a clarification would be required with respect to pending cases under section 214D. BR-Sun. Cash withdrawals from banks to trigger tax scrutiny The Finance Bill 2018 has amended the Income Tax Ordinance (ITO), binding banks to provide details of account holders and their day-to-day transactions to the FBR on a monthly basis. Earlier, a Section 165A was inserted in the ITO to empower banking companies to provide online access to their central database that contains details of account holders. However, banks denied access for reasons of secrecy and confidentiality of banking data. For resolving the issue, the Bill now binds banks to provide details of tax collected on cash withdrawals exceeding PKR 50,000 from filers and non-filers in respect of such accounts, where cash withdrawals exceed PKR 1Mn during each month. Moreover, the threshold for providing details of deposit in any account during a month has been enhanced from PKR 1Mn to PKR 10Mn. The threshold of credit card is also being increase from PKR 100,000 to PKR 200,000 per month. Dawn-Sun. \ Doing Business Reforms Agenda: World Bank team arrives for data collection A two-member delegation of the World Bank has arrived in Lahore for a four-day visit to collect data regarding various reforms completed by the provincial govt. under the Doing Business reforms agenda. During briefings by various provincial depts., the World Bank team appreciated the efforts of the govt. on the implementation of the reform agenda. The team also held extensive meetings with the private sector belonging to various fields of life in order to validate the reforms completed by the govt. BRSun. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 27-Apr 115.62 118.38 0.00% -0.06% Crude (JU'18) 27-Apr 27-Apr 27-Apr 27-Apr PKR PKR Pts. $ Mn $/bbl 45,543 -1.61 68.02 0.18% NM** -0.29% Gold (MY'18) Gold (10g) Local 27-Apr 27-Apr $/oz PKR 1,324.4 50,657 0.47% -0.08% Silver (MY'18) Cotton(KHI)-40 kg 27-Apr 27-Apr $/oz PKR 16.52 8,145 -0.47% 1.33% Kibor-6M 27-Apr % 6.52 $ Bn 17.13 0.01% WoW -2.37% Remittances 20-Apr FY18 Jul-Mar 18 $ Bn 14.61 YoY 3.55% Exports* Imports* Jul-Mar 18 Jul-Mar 18 $ Bn $ Bn 17.08 44.38 13.08% 15.57% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Mar 18 Trade Balance* $ Bn -27.30 Jul-Mar 18 Current Account $ Mn -12,029 Foreign Direct Inv. $ Bn 2.09 Jul-Mar 18 Jul-Feb 18 LSM Growth* % 6.24 % 3.20 Jul-Mar 18 Avg. CPI Discount Rate % 6.00 Mar-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -17.18% -50.55% 4.44% Major Currencies 175 GBP, 29-Apr-18, 159.3 165 155 145 EUR, 29-Apr-18, 140.2 135 125 115 USD, 29-Apr-18, 115.6 105 95 Apr-17 USD Jul-17 GBP EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day “Don't tell me what you value, show me your budget, and I'll tell you what you value.” Joe Biden Chart of the Day 2,000 Pakistan's Budget Deficit as % of GDP 9.0% KCCI suggests single digit SST The Karachi Chamber of Commerce and Industry (KCCI) has recommended that the rate of Sindh Sales Tax on Services (SST) should be in single digit with input tax credit facility made available, while export oriented and struggling industries should be exempted from SST. In its proposal for Sindh Budget 2018-19, the Chamber noted that the cost of doing business has surged exorbitantly with ever rising cost of utilities and inputs, which have eroded much of the profits of many business sectors, leaving negligible for business expansions. In contrast, several new taxes at different rates had been imposed in the name of broadening of tax base on many new services in the previous Sindh budgets, without recognizing the ground realities which created a host of difficulties in conducting business. BR-Sun. 1,800 8.0% 1,600 7.0% Ghee/cooking oil: Budgetary measures to increase prices by PKR 5 per kg The simultaneous increase of additional customs duty from 1 to 2% on import of soybean and palm oil and raise in customs duty from PKR 9,050 to PKR 12,000 per ton on import of soybean oil would have an overall incremental impact of PKR 1,100 per ton, resulting in minimum increase of PKR 5 per kg in prices of ghee/cooking oil. BR-Sun. 600 Diesel, petrol prices expected to go up by Rs5, Rs3 The govt. is expected to increase the prices of high speed diesel (HSD) and petrol by more than PKR 5 and PKR 3 per litre, respectively, for May’18 in order to protect its revenue and pass on the impact of higher international market rates to consumers. Ogra has also recommended a PKR 6.97/liter and PKR 6.95/ litre increase in the prices of kerosene and LDO, respectively. Dawn-Mon. - 1,400 6.0% 1,200 5.0% 1,000 4.0% 800 3.0% 400 2.0% 200 1.0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18B FY19B Budget Deficit (PKR Bn) % of GDP (RHS) 0.0% Source: KCCI Research, MoF Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon information obtained from sources believed to Privatisation list: ECC refuses to de-list PMTF be reliable and in good faith. Such information has not been independently verified. The ECC of the Cabinet has refused to de-list Pakistan Machine Tool Factory (PMTF) from the privatisation list while it has also approved PKR 300Mn for the organisation to settle payment of dues of its retired employees. PMTF is a strategic engineering icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The R&D Dept. bears no responsibility for its correctness or unit operating under the State Engineering Corporation (SEC). BR-Sun. accuracy. Contact: res@kcci.com.pk