Pakistan Daily Economy Update - 17 November

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1. Nov . 17, 2016 KCCI - eBulletin No further extension in date for filing tax returns: FBR FBR has said that there would be no further extension in filing of income tax returns beyond due date of Nov. 30, 2016. The Finance Minister Ishaq Dar on Nov. 15, 2016, extended the due date for filing of income tax returns/statements by salaried persons, individual, AOP, and companies till Nov. 30, 2016; in view of the spirit of taxpayers' facilitation. By Nov. 15, 2016 more than 467,778 returns had been filed electronically whereas, the number of returns filed electronically by Nov. 15, 2015, were 341,810. The Nation. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank 16-Nov PKR 104.81 0.03% USD-Open MKT 16-Nov PKR 106.60 0.19% KSE-100 index FIPI 16-Nov 16-Nov Pts. $ Mn 42,404 -8.11 0.26% NM** Crude (DE'16) 16-Nov $/bbl 46.00 -1.14% Gold (DE'16) 16-Nov $/oz 1,228 0.15% Gold (10g) Local 16-Nov PKR 43,714 0.00% Silver (DE'16) 16-Nov $/oz 16.94 -0.76% Fiscal indiscipline resurfaces post-IMF programme Pakistan’s fiscal deficit has started to increase soon after the conclusion of the IMF programme. It clocked up at 1.3% (PKR 738Bn) of GDP in 1QFY17, which may be due to ease in fiscal discipline. Furthermore, Tax revenues in the first quarter of the current year were also disappointing. They remained at 2.2% of GDP as opposed to 2.4% of the same period last year. The increase in the overall deficit was despite the fact that the provinces offered a healthy cash surplus of PKR 80Bn: PKR 49Bn came from Punjab, 31Bn from Sindh and PKR 24Bn from Balochistan while KPK exceeded its expenditure limit by PKR 25Bn in the 1QFY17. Dawn. Cotton(KHI)-40 kg 16-Nov PKR 6,575 0.00% Kibor-6M 16-Nov % 6.10% 0.02% 4-Nov $ Bn 24.15 -0.15% Remittances Jul-Oct 16 $ Bn 6.26 -3.82% Taxpayers: parametric audit selection to be done under new policy The FBR has decided that the parametric audit selection of taxpayers would be done under new Audit Policy 2016 for picking cases for audit with ample legal backing to avoid litigation in courts. In this regard, FBR members have been informed that in the one of previous years i.e. tax year 2011, parametric audit selection was carried out by the FBR. However, for tax years 201 - 2014, random audit selection was made. BR. Exports* Jul-Oct 16 $ Bn 6.43 -6.60% Imports* Jul-Oct 16 $ Bn 15.75 8.01% Trade Balance* Jul-Oct 16 $ Bn -9.32 -21.07% Current Account Avg. CPI-FY17* Jul-Sep 16 Jul-Oct 16 $ Mn % -1,368 3.95 -136.27% Pak-Thai FTA: fifth round of talks begin Pakistan and Thailand have entered into fifth round of negotiations on FTA which, according to the private sector, would be disastrous for a couple of domestic industries, especially the auto sector. According to the tariff reduction modalities, Pakistan has expressed its intention to liberalize overall trade by 80-85% by 10 years. Pakistan has divided the tariff reduction plan in five categories: (i) fast track- 40% of tariff lines to be reduced to 0 at the entry into force of the agreement; (ii) normal track-B category of tariff lines to be reduced to “0” within five years of entry into force of the agreement; (iii) sensitive track- C category of tariff lines to be reduced to “0” within 10 years of entry into force of the agreement; (iv) highly sensitive track- 10-15% of tariff lines to be reduced within 10 years of entry into force of the agreement; and (v) 10% no concession. BR. Oct-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year France sees a huge market in Pakistan Embassy of France’s Regional Economic Department for India and South Asia Head Jean Marc Fenet has said that France considers Pakistan as a huge market for business and is keen to further promote bilateral trade and economic relations. Fenet said due to the CPEC, France was taking more interest in Pakistan as the project was poised to create many new opportunities for business and investment. He said business was the best way to promote relations between the two countries and France has the latest technology and expertise which could help Pakistan boost its economy. Tribune. Govt. seeks private investment to double fuel reserves The govt. has decided to lure private investments to double the country’s oil storage capacity from the existing 20 days in a bid to avert any possible domestic shortfall. According to the Petroleum Minister, the govt. has planned to push for expansion in fuel storage capacity by private oil marketing companies as well as invite investors to set up storage houses. The govt. is also planning to create an energy fund to increase storage for strategic fuel reserves to at least 45 days. Tribune. New Khanki Barrage to go functional by FY17-end The new Khanki Barrage project would be completed by the end of the current FY17, which would ensure the safe passage of floods ranging from 800,000 cusecs to 1,100,000 cusecs through the barrage after enhancement of its design capacity. The project is part of the second tranche of the Asian Development Bank (ADB’s) $ 700Mn multi-tranche financing facility (MFF) for the Punjab Irrigated Agriculture Investment Program. The ADB is providing 83% of the funding ($ 247Mn) for the upgradation of the Khanki Barrage, while the Punjab government is providing the remaining 17%.The Nation. Basima-Surab Road widened at PKR 5.5Bn cost: NHA chief tells Senate body Chairman National Highway Authority (NHA) has said that section of Basima-Surab Road (459km) of the western route of CPEC has been widened and improved at a cost of PKR 5.5Bn and Prime Minister Nawaz Sharif would inaugurate it next month. The Chairman further briefed the Planning, Development and Reforms Committee on the road projects under CPEC that the project Gwadar-Turbat-Hoshab Road (200km) and Khuzdar-Shahdadkot-Ratodero (143km) and two sections of Gwadar-Ratodero Road (892km), have also been completed. BR. 175 165 155 145 GBP, 16-Nov-16, 130.6 135 125 115 EUR, 16-Nov-16, 112.3 USD, 16-Nov-16, 104.9 105 95 85 75 Nov-15 Feb-16 USD GBP May-16 Aug-16 Nov-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “A positive attitude causes a chain reaction of positive thoughts, events and outcomes. It is a catalyst and it sparks extraordinary results.” Wade Boggs Chart of the Day 300 Top Ten Net Foreign Direct Investment from Countries 250 146.1 Latest bike model: ECC refuses to grant ‘new entrant’ status with incentives ECC has turned down a proposal of the Ministry of Industries and Production that recommended giving the status of “new entrant” to a new motorcycle model of Atlas Honda. The Ministry said that a committee, constituted by the ECC, reviewed the technological difference between the new model of Atlas Honda and the models already being assembled in the country. It recommended that the model be treated as a “new entrant” and be provided all incentives under the new entrant policy for the motorcycle manufacturing industry. However, ECC Chairman Ishaq Dar did not agree with the policy proposal for a specific company, saying the Ministry of Industries should prepare policies that should be applicable to all concerned and were not focused on a single beneficiary. The News. Major Currencies 200 150 100 50 6.3 6.9 7.0 7.7 11.3 19.9 30.8 51.9 63.8 Thar coal-fired power project to be ready ahead of schedule The 1st phase of 660MW Thar coal-fired power projects would start its commercial operation by 3rd Jun’19 which is 4 months ahead of the scheduled date of Oct’19. While, the 2nd phase, two more power plants of 330MW will be completed by Dec’19. The main sponsors of the project are Sindh govt. with 54.7% share, Engro and Thal Limited with 12%, each and HBL with 10% share. The total cost of two 330MW mine-mouth power plants is around $ 1.1Bn with 75:25 debt to equity ratio and it would consist of 75% foreign and 25% local debts. The News. YoY 276.3 High taxes, new valuation hinder real estate sector Representatives of the estate sector have feared that the government’s tax collection is likely to come down in the coming months as activities in the sector have virtually come to a standstill due to higher tax rates and new valuation tables. They demanded that for past transactions, a fixed tax may be introduced for existing property owners to declare the property at the FBR value, and pay taxes at 1% on the amount of difference between DC value and FBR value, this difference amount could then be added to the declared assets after availing such scheme and payment of taxes. Dawn. WoW Forex Reserves 12.2 19.1 23.5 29.8 35.1 40.2 46.9 53.2 62.9 Bank accounts, properties, transactions: FBR chief explains the enormity of 'Benami' challenge Chairman FBR has said that millions of accounts, properties and transactions are "Benami" in the country and a law has been proposed to deal with them. A meeting of the Finance Standing Committee met to discuss clause-by-clause Benami Law and forwarded to the Senate for its approval. However, the members did not agree to a clause that Benami properties would be liable to confiscation, and suggested to change it with a heavy penalty. BR. List of Indicators 0 Source: KCCI Research, SBP Value in Mn $ 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