Pakistan Daily Economy Update - 27 May

Transcription

1. May 26-27 , 2019 KCCI - eBulletin Govt’s economic team reviews budget proposals PM’s Adviser on Finance Dr Hafeez Shaikh discussed various proposals that could create a revenue cushion of about PKR 1.45Tn, taking the revenue target to PKR 5.55Tn. There was a general agreement that over PKR 700Bn in additional revenue has to come from two areas — sales tax and income tax. The meeting also discussed some proposals for increasing general sales tax by 1% or 1.5% to yield over PKR 350Bn. FBR chief said that PKR 220Bn could be generated through better enforcement measures and another PKR 200Bn through withdrawal of tax exemptions. However, a majority of the functionaries did not agree to the proposal for total reversal of the existing regime and said the income tax burden should be kept low for those earning less than PKR 10Mn. Dawn-Mon. Hafeez aims for record high revenue target The govt. announced that it would increase revenue target to PKR 5.55Tn — almost 35.4% or PKR 1.450Tn higher than current year’s revised estimate of PKR 4.10Tn — and all civil and military institutions would contribute to the austerity-oriented federal budget FY20. Budget FY20 would have three key combinations: fiscal consolidation, austerity and additional revenue mobilization, said PM’s Adviser on Finance Dr Hafeez Shaikh. The four major components would form the basis of PKR 1.45Tn additional revenue. These would include about 14% normal growth through inflation and economic growth besides withdrawal of tax exemptions, recovery of arrears and additional revenue measures. Dawn-Sun. Govt likely to reverse tax concessions for salaried class The govt. looks set to reverse tax concessions extended by the previous govt. to benefit high-earning salaried and non-salaried individuals substantially more than the middle-class workforce. It is estimated that the reversal of tax rates for salaried individuals will help to pocket extra amount of PKR 14Bn. Last year, the govt. had given sweeping tax cuts to low salary earners, raising the exemption threshold almost 3 times to PKR 1.2Mn from PKR 400,000. Dawn-Sun. Cut in corporate tax may be reversed Tax authorities have proposed reversing the decision of reducing corporate income tax rates to 25% as the govt. faces stiff resistance from industrialists over its plans to withdraw tax exemptions in the new budget. The tax authorities have also proposed to abolish concessionary tax rates charged on the sales of sugar, steel, edible oil, imported raw material and semi-finished goods aimed at generating maximum possible revenues to meet the condition of the IMF. The tax authorities have recommended increasing the number of income tax slabs for individuals, suggesting a 35% highest income tax rate for business income of the individuals. The current rate is 29%. Tribune-Sun. Assets Declaration Ordinance, 2019: Name, identification of legal owner shall be declared: FBR The FBR has clarified that the name and identification of the legal owner or Benamidar should be declared under Assets Declaration Ordinance, 2019 where an asset declared is only beneficially owned by the declarant or is owned by a Benamidar of the declarant. The FBR has issued SRO 578(1)/2019 to notify the Assets Declaration (Procedure and Conditions) Rules, 2019. BR-Mon. Deposit of tax against foreign assets: SBP notifies procedure The SBP has notified the procedure for deposit of tax against foreign assets under Assets Declaration Ordinance 2019. The SBP has also announced the procedure for conversion of foreign assets held outside Pakistan and the foreign currency held in Pakistan into PKR, payment of taxes against foreign assets held outside Pakistan and the foreign currency held in Pakistan, and repatriation of foreign assets into Pakistan. BR-Sun. ST taxpayers: FBR introducing ”single portal” online facility: Hammad Minister of State on Revenue, Hammad Azhar, has said that the FBR is introducing a single portal online facility for taxpayers for filing of sales tax returns with provinces. He announced that the following revenue initiatives will be implemented within 2 months: First, promissory notes for immediate clearance of pending refunds. Second, flat taxes for small traders of Islamabad as a pilot project. Third, single portal online filing of sales tax with provinces. BR-Mon. Imran's govt. promises incentives to textile exporters The govt. has decided to continue providing incentives to the country’s leading textile sector in a bid to boost value-added textile exports to $ 30Bn over the next 5 years. A road map in this respect will be rolled out in the next eight weeks. The previous five-year Textile Policy 201419 is going to expire by end Jun’19. The special energy package will continue for the five zero-rated sectors; electricity at 7.5 cents/KW hour and gas at $ 6.50/MMBtu. Tribune-Sun. Hafeez Shaikh assures IMF loan at a lower interest rate than other programs Adviser to PM on Finance Abdul Hafeez Shaikh has said that IMF’s loan programme for Pakistan has a lower interest rate in comparison to other programs. The interest rate is 3.2%. The News-Sun. \ Ramadan inflows arrest rupee’s fall The rupee’s fall seems to have dissipated due to excess supply of dollars in the open market amid seasonal effect of Ramadan followed by disappearing interest from buyers. Buyers have also lost interest in dollar after rupee gained PKR 4 against the greenback, being sold for PKR 150.50. Dawn-Sun. Pak exports could be doubled to $ 50Bn: Razak Adviser to PM on Commerce Abdul Razak Dawood has said that Pakistan’s exports could be doubled from $ 24Bn plus to $ 50Bn over medium term but first stumbling block of bringing change in mentality needs to be addressed. He said the Ministry of Commerce would oppose any move to abolish zero-rating of five export-oriented sectors in the coming budget. PM’s adviser said that direction of reducing duty on raw material and inter mediatory goods would continue while duty on finished goods would be increased in budget FY20. The NewsMon. CPEC expanding to new sectors, says Chinese VP Chinese VP Wang Qishan opened his three-day visit by inaugurating different projects along with PM Imran Khan, including 660KV transmission line project from Matiari to Lahore, Rashakai SEZ Project, Huawei Technical Support Centre and Confucius Institute at University of Punjab . Sharing his assessment of the progress on the CPEC and the recently launched 2nd phase, the Chinese leader observed that CPEC has come a long way over the past five years and is rapidly extending to new priority areas including industrial parks and livelihoods. Dawn-Mon. Auto industry perturbed over move to revive used cars’ import The country's local auto industry has expressed grave concerns over govt.'s alleged intention to revive used car imports in the upcoming budget citing it as a revenue measure. The surprising move came after used car importers lobby approached govt. with an easy solution to plug revenue shortfall through import duty on used cars which went down after govt. issued SRO 52(I)2019. BR-Mon. Dispensation to provinces: govt. decides to release over PKR 23Bn The federal govt. has decided to release over PKR 23Bn as one time dispensation to the provinces and federal territory in the name of development schemes weeks before the budget FY20. For this purpose, an amendment has been made in the Sustainable Development Goals Achievement Program (SAP). BR-Mon. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 24-May PKR PKR 150.92 151.45 -0.55% -0.46% KSE-100 index FIPI Pts. $ Mn 35,704 3.46 0.34% NM** Crude (AP'19) 24-May 24-May 24-May $/bbl 59.04 1.48% Gold (MA'19) 24-May $/oz 1,284.2 0.08% Gold (10g) Local 24-May PKR 60,357 -0.70% Silver (MA'19) 24-May $/oz 14.50 -0.14% Cotton(KHI)-40 kg 24-May PKR 9,324 -0.57% Kibor-6M 24-May % 12.95 0.00% Forex Reserves 17-May FY19 $ Bn 15.13 WoW -4.83% Remittances Jul-Apr 19 $ Bn 17.88 8.46% Exports* Jul-Mar 19 $ Bn 17.08 0.11% Imports* Jul-Mar 19 $ Bn 40.76 -7.96% Trade Balance* Jul-Mar 19 $ Bn -23.67 13.03% -11.59 1.38 26.97% -51.70% 24-May YoY Jul-Apr 19 $ Bn $ Bn Jul-Apr 19 Jul-Feb 19 LSM Growth* % % Jul-Apr 19 Avg. CPI Discount Rate % May-19 WoW= week, NCCPL, KSE, Sources: KCCI Research, PMEX ** Not Meaningful on week; Current Account Foreign Direct Inv. -1.72 7.00 12.25 SBP, PBS* Major Currencies 205 195 185 175 165 155 145 135 125 115 105 95 May-18 USD GBP, 26-May-19, 192.9 EUR, 26-May-19, 170.0 USD, 26-May-19, 151.7 Aug-18 GBP Nov-18 EUR Feb-19 May-19 Source: KCCI Research ; Oanda.com Quote of the Day "Woe to every fault-finding backbiter; who amasses wealth and counts it over and again. He thinks that his wealth will immortalise him forever". Qur’an 104:1-3 Chart of the Day Receipt Of Foreign Economic Aid By Pakistan By Type (9MFY19 - $ Mn) Safe Deposit, 2,000.00, 24% Bilateral (Grant),… Commercial Banks, 3,107.92, 37% Total $ 8,470Mn Bilateral (Loan), 2,003.74, 24% Multilateral (Grant), 42.44, 0% Multilateral (Loan), 1,150.22, 13% Source: KCCI Research, EAD Disclaimer This report has been prepared by KCCI Research & Development Cell. The Mayor says PM’s special package for Karachi only verbal promise so far information contained herein have been compiled or arrived at based upon Mayor Karachi Waseem Akhtar has said that two bridges and three major roads of Karachi have been renovated and fire brigade of KMC information obtained from sources believed to be reliable and in good faith. upgraded with the help of PKR 25Bn funds announced by former PM Nawaz Sharif. Akhtar said PM Imran’s package had so far only been a Such information has not been independently verified. verbal promise as no funds under it were received by Governor House or KMC. The News-Mon. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The