Pakistan Daily Economy Update - 23 January

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1. Jan . 22-23, 2017 KCCI - eBulletin FBR amends law to bring foreigners into tax net FBR has brought foreign individuals or entities engaged in taxable business transactions in Pakistan into the tax net by removing a lacuna in a tax law. The amendment was made into the Income Tax Rules, 2002 this week to bring foreign nationals or companies into the tax net. The FBR, under the amendment, removed the condition of computerized national identity card (CNIC) for issuing notices by a Commissioner Inland Revenue to get a foreign person or company, having taxable income, registered. The News. Saudi finance ministry says no fees on remittances The Saudi finance ministry has said that there would be no fees applied on remittances out of the country, days after the kingdom’s advisory Shura Council said it was considering a proposal to impose a 6% levy on expatriate remittances. In its 2017 budget released in the last week of Dec’16, the kingdom added a provision to levy fees on each dependent of an expat worker. It was decided that an expatriate worker will have to pay SAR100 for each of his dependents every month. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank 20-Jan PKR 104.60 -0.24% USD-Open MKT 20-Jan PKR 107.85 -0.05% KSE-100 index FIPI 20-Jan Pts. $ Mn 49,365 -7.66 0.72% NM** 1.90% Crude (MA'17) 20-Jan 20-Jan $/bbl 53.15 Gold (FE'17) 20-Jan $/oz 1,208 0.17% Gold (10g) Local 20-Jan PKR 43,628 -0.49% Silver (FE'17) 20-Jan $/oz 17.05 0.22% Special Security Division for CPEC notified A special division for the security of the CPEC has been established and notified by the Interior Ministry. The security division, assigned with the duty of protecting projects under the CPEC and the Chinese workers, will comprise of nine army battalions and six civil wings having 13,700 personnel. BR - Mon. Cotton(KHI)-40 kg 20-Jan PKR 7,057 0.00% Kibor-6M 20-Jan % 6.11% 0.00% Forex Reserves 13-Jan $ Bn 23.19 WoW -0.04% Pakistan, Thailand fail to reach deal on TRMs Pakistan and Thailand have failed to reach agreement on Tariff Reduction Modalities (TRMs) for the proposed FTA as technical teams of both countries held two days negotiation (Jan. 17-18, 2016) in Islamabad on each other's offer of tariff lines requests. Thailand has comparative advantage in 1,000 commodities and Pakistan has relative advantages in 684 commodities. Pakistan has proposed new article in the proposed FTA draft aimed at seeking compensation and maintains that Thailand has not presented offer for further deliberations which implies that its offer list has been rejected outright. Likewise, Thailand delegation has also declined to accept Pakistan's offer list due to tariff liberalization issues. The agreement is likely to be signed in the mid of 2017 after both sides finalize recommendations that may be accommodated in the agreement. BR Mon. Remittances Jul-Dec 16 $ Bn 9.46 -2.27% Exports* Jul-Dec 16 $ Bn 9.91 -3.82% Imports* Jul-Dec 16 $ Bn 24.40 10.10% Trade Balance* Jul-Dec 16 $ Bn -14.49 -22.20% Current Account Avg. CPI-FY17* Jul-Dec 16 $ Mn % -3,585 3.88 -92.23% Initiative: Pakistan to build country’s first Naphtha Cracker Complex Pakistan is set to build the country’s first ever Naphtha Cracker Complex (NCC), a state-of-the-art “grand infrastructure” to change petrochemical raw substances into value-added products ranging from construction, home décor, appliances, furniture, medical care, paints, cleaning stuff and top of the line military gadgets. Tribune. Apparel sector: Govt. urged to withdraw duty on cotton yarn import The Pakistan apparel sector has urged the govt. to withdraw customs duty, sales tax and regulatory duty on the import of cotton yarn up to 32 single coarse counts, a major raw material of value-added apparel sector. They said that govt. has withdrawn custom duty and sales tax on import of cotton due to decline in cotton production. Since there is also shortage of yarn in the country, they request the govt. to do the same in the case of cotton yarn. Tribune. Import of LNG: rate of advance tax quite different for filers, non-filers The advance tax rate for LNG import has been made different for filers and non-filers where tax rate for 'filer' is 1% of the import value as increased by customs duty, sales tax and federal excise duty. For non-filer, tax rate is 1.5% of the import value. In case where a private company imports LNG, advance tax rate would be 5.5% for filers and 8% for non-filers. The advance tax rate on the LNG import by a private company is 5.5% and by govt. designated buyer like PSO is 1% of the import value. BR - Sun. Licences to 21 OMCs: Ogra expects PKR 10.5Bn investment OGRA has granted licence for establishment of Oil Marketing Company (OMC) to 21 companies during 6MFY17. The authority is expecting that establishment of these companies will bring a minimum investment of PKR 10.5Bn in the next three years. In CNG sector, OGRA has extended three CNG licences to operate gas stations during the period of Jul. to Dec.16 which contributed an investment of PKR 45Mn approximately. In addition, 70 existing CNG marketing licences of operational CNG stations were renewed for a period of another five years. BR - Sun. Pakistan imports generators worth PKR 283Bn in 2016 The government could not fulfill its promise of resolving the power crisis in 2016 as the country imported PKR 282.5Bn worth of power generating machinery in the said year. Power generating machinery's demand soared as Pakistan spent PKR 172.9Bn on the import of power generating machinery during Jul-Dec‘16 of FY17, showing 110% growth over same period of last fiscal. Dawn. Pakistan becomes third-largest importer of cooking oil According to the Pakistan Edible Oil Conference (PEOC), Pakistan has become the 3rd largest importer of cooking oil after China and India. The import of crude and refined cooking oil has increased to 2.6Mn tons per annum in Pakistan and also imports 2.2Mn tons oil seeds every year. Imports help the country meet around 75% of its domestic needs. Tribune. Livestock, dairy, poultry fair: Sindh govt. working on achieving food security Sindh Minister of Livestock and Fisheries has said that the provincial govt. is committed to promoting and supporting agriculture, livestock, dairy and other sectors and will provide incentives and facilities to investors. The Sindh Enterprise Development Fund (SEDF), in collaboration with the livestock, fisheries and agriculture departments have organized the 6th edition of the LDFA in a bid to strengthen rural economy of the province. The fair will end on 22nd Jan’17. Tribune. Cement Manufacturers for anti-dumping duty on Iranian cement Pakistani cement manufacturers have urged the govt. to place anti-dumping duty on the Iranian cement and reducing taxes to make cement more affordable for consumers, which will increase its demand and result in capacity enhancement of the industry. In the last fiscal budget, govt. had increased taxes on cement from PKR 600 to PKR 1,000 along with 17% sales tax, while industry previously paid PKR 2,492/ton. The difference in tax increase will augment govt. revenue from PKR 2,492/ton to around PKR 3,250/ton. The Nation - Mon. Exhibitors seal $ 18Mn deals at textile machinery expo The three-day GTex International B2B Textile Machinery Brand Expo concluded at Expo Centre, Karachi with $ 18Mn matured deals and provided great business opportunity to Pakistani importers and exporters. The leading international brands from textiles, garments, leather, digital printing, embroidery machinery, accessories, chemicals, dyes and energy sectors participated. The Nation - Mon. YoY Jul-Dec 16 Nov-16 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 GBP, 22-Jan-17, 129.9 135 125 115 EUR, 22-Jan-17, 112.2 USD, 22-Jan-17, 104.2 105 95 85 75 Jan-16 Apr-16 USD GBP Jul-16 Oct-16 Jan-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Vitality shows in not only the ability to persist but the ability to start over." F. Scott Fitzgerald Chart of the Day Sector Wise Receipts of Net FDI (1HFY17) Power Oil & Gas Explorations Financial Business Communications Transport Beverages Chemicals Construction Electronics Others Personal Services Transport Tobacco Textiles Cement 74.75 45.61 32.71 32.05 31.53 29.60 27.44 24.64 23.20 19.59 18.21 16.57 0 100 480.96 150.59 140.05 200 Value in (Mn US $) 300 400 500 600 Source: KCCI Research, SBP 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