Pakistan Daily Economy Update - 1 June

Transcription

1. June . 1, 2017 KCCI - eBulletin Zero-rated supplies Senate panel concerned at levy of further ST Senate’s Finance Standing Committee has expressed concern over 2% further sales tax on zero-rated supplies to unregistered persons through Finance Bill 2017 and deferred amendment made in section 4 of the Sales Tax Act, 1990. During the committee proceedings to review Finance Bill 2017, committee members objected that there is no justification of 'further sales tax' within the zero-rated regime when supplies can only be consumed by zero-rated sectors. The Finance Bill 2017 has imposed 2% 'further sales tax' on zero-rated supplies to unregistered persons. BR. Senators reject government’s proposal to grant validation to SROs Senators have unanimously rejected govt.'s proposal to grant validations to hundreds of SROs and notifications issued by the FBR in last few years through Finance Bill 2017-18 opposing the govt's move for seeking validation of all SROs in one go. In this regard, members of Senate’s finance standing committee have also recommended for tabling all such SROs before the federal cabinet for approval in the light of judgement given by Supreme Court of Pakistan. BR. Govt revises down FY17 direct tax collection target by PKR 180Bn Government has brought the direct tax revenue collection target down by around PKR 180Bn (from PKR 1,378.84Bn from actual target of PKR 1,558Bn) for the outgoing FY17 as the FBR has to make refunds on advance taxes taken during the previous fiscal year. According to the budget document for FY18, the target of income tax collection – the major component of direct taxes – has been reduced to PKR 1,363.84Bn from the actual target of PKR 1,538.75Bn. The finance ministry has already revised downward the revenue collection target for the current fiscal year by PKR 100Bn to PKR 3,521Bn from the actual target of PKR 3,621Bn. The News. Provisional figures: PKR 346Bn revenue collected in May.’17 The revenue collection of the FBR has shown a growth of 15% during May’17 when compared with the same period last fiscal year. The FBR has provisionally collected PKR 346Bn during May 2017 against PKR 298Bn in May’16, reflecting an increase of 15%. The revenue collection would further increase on compilation of final figures in coming days. BR. Govt. reduces oil prices for Jun.’17 The govt. has reduced prices of the High Speed Diesel (HSD) and MS (petrol) by PKR 1.60/liter and PKR 1.20/liter respectively for Jun.’17. After the govt.’s decision, diesel prices will be reduced to PKR 81.4 from earlier PKR 83/liter. Petrol price will go down to PKR 72.8 from PKR 74/liter. Kerosene oil and LDO prices will remain unchanged at PKR 44/liter each. The Nation. Textile, clothing exports rise by 6.2% Ministry of Textile Industry has claimed that decline in textile exports would be arrested with release of PKR 15Bn under the Prime Minister incentives' package for textile exporters. According to the Ministry data, textile and clothing exports rose by 6.2% to $ 1.06Bn in Mar.’17 compared to $ 995.33Mn in Feb.’17. However textile exports during 10MFY17 stood at $ 10.30Bn against $ 10.39Bn in 10MFY16, registering negative growth of 1%. The Ministry is projecting positive growth in textile exports by the end of FY17. BR. KCCI demands strict action against K-Electric Karachi Chamber of Commerce and Industry (KCCI) President Shamim Ahmed Firpo has expressed deep concern over prolong load shedding being suffered by the Karachiites adding that power supply to industrial areas also remains suspended for around 10 to 12 hours, causing severe financial and production losses. The President KCCI further said that K-Electric is earning profits of up to billions of rupees each year but has not invested substantial funds on improving its infrastructure. In this regard, he has urged the authorities at federal and provincial levels to take strictest action against K-Electric. The Nation. NEPRA says will take action on Karachi’s load-shedding Nepra has decided to take action on the frequent tripping of network and extended load-shedding in Karachi. The authority has decided to nominate a team of professionals who will monitor and verify load-shedding in different areas of Karachi, especially during Sehr and Iftar times, along with current generation capacity of the company, its utilisation and the frequency of tripping of generating plants and transmission/distribution networks. The team shall collect data and submit its report to Nepra to proceed further in accordance with the law. Tribune. Cotton traders hail hedge trading resumption after four decades Cotton traders are eager to participate in hedge trading to avert risk of price fluctuation in local and international markets after the government announced its resumption after four decades. Officials of Karachi Cotton Association (KCA), Pakistan Mercantile Exchange (PMEX) and other stakeholders will meet on Thursday (today) to identify ways to restart the trading. Barring Pakistan, all major cotton growing countries, including China, US, India and Brazil are using hedge trade to control price fluctuation and such trading in Pakistan would ultimately benefit growers. The News. CSF inflows help reduce services trade deficit to $ 2.3Bn The country's services trade posted a $ 2.3Bn deficit, up 3% compared to $ 2.24Bn in 10MFY16. In this regard, latest statistics released by State Bank of Pakistan (SBP) revealed that Pakistan's services trade is performing well supported by release of Coalition Support Fund (CSF) by US. The service imports mounted up by $ 103Mn to reach $ 7.02Bn during period under review from $ 6.92Bn a year earlier. Similarly, services exports stood at $ 4.71Bn as against $ 4.68Bn in same period of FY16, depicting an increase of $ 30Mn. BR. Syngenta to invest $ 1.4Bn in Pakistan Syngenta Pakistan, a Switzerland-based company dealing in premier crop protection has announced to support small and medium growers to take up modern ways of farming, with the primary objective to ensure food security in the country. Syngenta’s head of AsiaPacific Region said that after Syngenta’s transition of new ownership to ChemChina, it will continue to focus on long-term investment through over $ 1.4Bn annual investment in research and development in Pakistan. The News. 800cc or 1,000cc - Nishat to decide which car to produce first Nishat Group, which recently signed an agreement with South Korean carmaker Hyundai Motor Company, intends to introduce hybrid electric cars in Pakistan; but as infrastructure for the new technology is too costly, both partners are conducting a feasibility study to assess the scope of hybrid electric cars in Pakistan. Pouring an investment of around $ 120Mn into setting up an assembly plant near Faisalabad, the group is conducting consumer surveys to decide whether to start with 800cc or 1,000cc engine category. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (JY'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 31-May 31-May 31-May 31-May 31-May 31-May 31-May 31-May 31-May 31-May PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.86 106.00 50,592 -81.73 48.75 1,270.0 42,814 17.32 7,288 6.14% Forex Reserves 19-May $ Bn 21.01 0.05% -0.19% -1.67% NM** -1.67% 0.46% 0.00% -0.44% -0.36% -0.01% WoW 1.59% YoY -2.79% -2.29% 19.88% -40.12% -204.75% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Apr 17 Remittances $ Bn 15.60 Jul-Apr 17 Exports* $ Bn 16.92 Jul-Apr 17 Imports* $ Bn 43.47 Jul-Apr 17 Trade Balance* $ Bn -26.56 Jul-Apr 17 Current Account $ Mn -7,247 % 4.09 Avg. CPI-FY17* Jul-Apr 17 May-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 May-16 GBP, 30-May-17, 134.9 EUR, 30-May-17, 117.2 USD, 30-May-17, 105.1 Aug-16 USD GBP Nov-16 Quote of the Day "Long is the way and hard, that out of hell leads up to light." John Milton Chart of the Day BREAK UP OF CURRENT EXPENDITURE (FY18) Running of Civil Govt. 11% Subsidies 4% Grants & Transfers 12% Mark-up Payment Defence Affairs and Services 27% Sales of refrigerators, split ACs surge Hot weather in Ramadan coupled with prolonged load shedding has pushed up sales of spilt air conditioners and refrigerators all over the country. In this regard, increasing turnover of buyers in Ramadan has lifted the sales of split ACs by 30-40% followed by a 15-20% rise in sales of refrigerators. Dawn. Sindh growers demand ban on Indian vegetables The growers’ representatives have urged the Sindh govt. to ban the imports of Indian vegetables, ensure transparency in the distribution of subsidized agricultural implements and link the province’s fruit and vegetable sector with the CPEC. The representatives’ also draw the Sindh govt.’s attention towards increasing fruit and vegetable exports to Central Asian, Russian and Eastern European markets. The representatives also blamed the Board of Revenue’s tedious documentation process for discouraging farmers from applying for agriculture credit. Dawn. Feb-17 Source: KCCI Research ; Oanda.com EUR Pension 7% 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 be reliable and in good faith. Such information has not been independently verified. 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 accuracy. Contact: res@kcci.com.pk