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Pakistan Daily Economy Update - 10 April

IM Insights
By IM Insights
4 years ago
Pakistan Daily Economy Update - 10 April

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  1. Apr . 10, 2018 KCCI - eBulletin Pakistanis with $10,000 plus annual foreign income required to file returns The govt. has warned individuals with foreign income of over $10,000 or assets worth $100,000, of penalties, if they fail to annually file their returns under the new law. The presidential ordinance amending Section 114 and Section 116 of the Income Tax Ordinance 2001, has made filing of income tax returns and wealth statement mandatory for resident taxpayers fulfilling above criteria. Where any person fails to furnish foreign assets and income statements within the due date then such person is required to pay a penalty of 2% of the foreign income or value of the foreign assets for each year of default. The News. Those on FBR notice can benefit from Amnesty Scheme All those who are in litigation with the FBR cannot avail themselves of the Tax Amnesty Scheme; however, those who have received notices from the revenue board can benefit from this scheme. The govt. is also trying to find a way for those whose cases are in the court so that they could benefit from the scheme, said Miftah Ismail, Adviser to PM on Finance. He said the govt. could get direction from the courts regarding the pending cases so that the litigants could also avail themselves of the tax amnesty scheme. The News. Income Tax Ordinance: amendments must be part of Finance Act The implementation of reduced rates of income tax announced in the amnesty scheme and promulgated through an Ordinance are contingent to their being incorporated in Finance Act from Jul. 1, 2018. The amendments proposed in the Income Tax Ordinance 2001 must be a part of the Finance Act 2018. The effectiveness of an Ordinance is 120 days which implies that the income tax amendment laws would lapse on Aug. 10, 2018; however, unless the Finance Bill 2018 contains the income tax amendment and is approved by parliament; the effectiveness of the ordinance from Jul. 1, 2018 to Aug. 10, 2018 may be challenged. BR. Individuals’ income tax burden to come down by 70% The income tax burden on individuals will reduce by 60% - 70% besides outright exclusion of more than 500,000 persons from any tax liability with effect from Jul. 1, 2018. Under the newly promulgated financial ordinance, threshold for income tax exemption is increased to annual income of PKR 1.2Mn (PKR 100,000 per month) from existing threshold of PKR 0.4Mn, effectively pulling out about 500,000 people from any income tax liability. Dawn. Mar.’18: exports increase by 24%, highest in four years The country's export has increased by 24%, the highest year-on-year growth in 4 years reaching $ 2.23Bn in Mar.’18 compared with Mar.’17. Import stood at $ 5.28Bn in Mar.’18 compared with $ 4.80Bn in Mar.’17, indicating an increase of 10%. The overall exports in 9MFY19 posted a growth of 13% to $ 17.08Bn as compared to $ 15.10Bn during 9MFY18. Imports during this period stood at $ 44.38Bn as compared to 38.40Bn, indicating a growth of 16%. The trade deficit showed a growth of 17% to $ 29.39Bn during 9MFY18 from $ 23.30Bn during 9MFY17. BR. 6% growth target missed The govt. appears to miss 6% growth target for ongoing FY18 as it has revised the projection for the entire financial year to 5.79% on the basis of available data of six to eight months. The growth in industrial and services sectors is not encouraging and projection of both the sectors has also been revised downward by a meeting of National Accounts Committee, which reviewed the GDP growth target on the basis of available data. Growth of industrial sector has been revised downward to 5.80% against 7.3% targets set in budget for FY18 and commodity sector to 4.84% from 5.4%. BR. Growth to hit 11-year peak The govt. has announced that the economy is going to grow at 5.79%, slightly lower than the target of 6% for FY18, but highest in the last 11 years. In a meeting of National Accounts Committee (NAC), 15 out of 20 key growth indicators have been found to be on target. The growth rate, however, is provisional as final numbers for the full year will firm up later. The per capita income calculates to PKR 180,204 for 2017-18, higher than PKR 162,230 figure for FY17. The agriculture sector witnessed growth of 3.81%. The industrial sector posted a growth of 5.8% compared to the benchmark set at 7.3%. Manufacturing recorded growth of 6.13% against the target of 6.4%. Dawn. Cabinet asks Centre to have mercy on Sindh, end power outages The Sindh Cabinet has expressed serious concerns over prolonged electricity outages in the province, urging the federal govt. to have mercy on the people and stop power cuts in the sweltering weather. Separately, CM Murad Ali Shah has written another letter to the \ PM, asking him to direct the SSGC and KE to immediately resolve their issues in public interest and provide immediate relief the residents and industry of Karachi, where power outages have turned into a grave crisis. The CM wrote that the SSGC, in public interest, has offered to increase the gas supply through a gas management plan, provided that KE pays a security deposit, resolve outstanding payment issues and sign a Gas Sale Agreement. The KE, on the other hand, has committed to provide security deposit and has showed readiness to sign the GSA on mutually agreed terms. The News. With CPEC, demand for petroleum products set to grow Consumption of petroleum products increased by 9.64% in FY17 leading to a higher import bill and pressure on the country’s two ports, the KPT Oil Piers at Keamari and the FOTCO at Port Qasim. The demand is set to increase following the increase in activities due to the CPEC in 2018, according to the ‘Pakistan Oil Report 2016-17’ released by the Oil Companies’ Advisory Council’s (OCAC). Based on a GDP growth of 7%, OCAC said that the forecasted annual demand of petroleum products will reach around 55Mn tons in 2030, from 2018’s estimated demand of 29.6Mn tons. Tribune. Oil industry declines to pay Ogra fee The oil industry has declined to pay annual fees to Ogra unless formal notification of an agreement on fee structure reached, is issued, in Jun.’17. The oil industry and Ogra had reached an out-of-court settlement on a two-year old dispute over structure of fee payable by all oil marketing, refining, storage, and pipeline companies. The two sides also signed a formal agreement to double the term of license for the oil related companies from 15 to 30 years with a fee of PKR 2.5Mn per license while annual fee structure was based on the market size and throughput sales. Dawn. SECP's compliance with IOSCO standards rises to 83% International Organization of Securities Commissions has enhanced Pakistan's compliance level with the IOSCO principles to 83%, which represents 21% improvement since 2015. Assessment Committee's report on follow-up review of the Pakistan's implementation of IOSCO objectives and principles suggests that SECP is now fully implementing 14 principles where 16 principles are implemented broadly, out of total 37 principles. The SECP remains committed to developing and implementing reform initiatives consistent with IOSCO principles and agrees to give due consideration to the follow-up report's findings regarding effective implementation. The Nation. Workers seek reforms in budget to raise wages National Conference has demanded federal and provincial govt. to introduce reforms in the national and provincial budgets to raise wages and pension allowance of the workers by 50%. They also demanded to impose taxes upon the feudal lords, monopolistic capitalists and big traders which will tackle rising price hike and abject poverty, aggravating unemployment, irrational gap between the rich and poor in the society. The Nation. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 9-Apr 115.61 115.30 0.02% -1.07% Crude (MY'18) 9-Apr 9-Apr 9-Apr 9-Apr PKR PKR Pts. $ Mn $/bbl 46,581 3.21 63.29 -0.12% NM** 1.92% Gold (MY'18) Gold (10g) Local 9-Apr 9-Apr $/oz PKR 1,336.7 50,442 0.25% 0.00% Silver (MY'18) Cotton(KHI)-40 kg 9-Apr 9-Apr $/oz PKR 16.48 8,038 0.76% 2.75% Kibor-6M 9-Apr % 6.49 $ Bn 17.80 -0.01% WoW -0.85% Remittances 30-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% 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-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 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% -50.03% 15.64% Major Currencies 175 GBP, 9-Apr-18, 163.2 165 155 145 EUR, 9-Apr-18, 142.1 135 125 115 USD, 9-Apr-18, 115.6 105 95 Apr-17 Jul-17 GBP USD EUR Oct-17 Jan-18 Source: KCCI Research ; Quote of the Day Good or great leadership is rooted in a deep sense of personal accountability. Vince Molinaro Chart of the Day Trade Snapshot of Pakistan (9MFY12 - 9MFY18) 44.38 50.00 38.40 40.00 33.285 33.41 33.04 34.00 32.49 30.00 20.00 17.19 18.02 19.08 17.93 15.61 15.10 17.08 10.00 0.00 -10.00 -20.00 -30.00 9MFY12 9MFY13 9MFY14 Trade Deficit ($ Bn) 9MFY15 9MFY16 Imports ($ Bn) 9MFY17 9MFY18 Exports ($ Bn) Source: KCCI Research, PBS 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: