Pakistan Daily Economy Update - 29 August

Transcription

1. Aug . 28 - 29, 2016 KCCI - eBulletin Dastgir, others to discuss export slide Commerce Minister Khurram Dastgir will preside over meeting of Federal Textile Board (FTB) on Aug. 29, 2016 (today) wherein issues faced by the textile sector and reasons for continuous decline in exports will be discussed threadbare. The Minister has been requested to constitute sub committees of FTB for finalizing the recommendations specially on Regulatory duty for cotton yarn, custom duty and sales tax on imported cotton, zero custom duty on manmade fibers not manufactured locally, justification for drawback on entire exports as compared to incremental only, refunds, simplification of temporary importation schemes and increase in wages on regular basis. BR - Mon. Minimum taxation issue: President Issue four orders Pakistan President as an appellate authority under Federal Tax Ombudsman Ordinance, 2000 has issued four different orders on the issue of Minimum Taxation under Section 153(1)(b) of the Income Tax Ordinance, 2001. In two cases, the President's orders have endorsed the viewpoint of FBR against the orders of the FTO. In other two cases, President, while working as an appeal authority, have rejected the representations against the order of the FTO. BR - Mon. Repatriation of profits rises almost threefold Repatriation of profits and dividends nearly trebled to $ 145.8Mn in July from $ 52.5Mn in the same month last year. During the preceding fiscal year, the amount of profits repatriated by foreign companies operating in Pakistan stood at $ 2Bn, which was the second biggest payment after debt servicing for the country. Dawn - Sun. Govt. still collecting 22% tax on import of textile waste In violation of an agreement with the textile sector to charge its supply chain at zero sales tax rates, the govt. is still collecting 22% taxes on import of textile waste used as raw material in manufacturing valueadded products. According to industry people, spinning mills importing fabric waste are forced to pay 17% sales tax and 5% withholding tax at the import stage, which they cannot recover due to overall zero-rating status of the textile sector. Tribune- Sun. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 26-Aug PKR 104.82 0.02% USD-Open MKT 26-Aug PKR 106.10 0.00% KSE-100 index FIPI 26-Aug 26-Aug Pts. $ Mn 39,927 4.82 0.34% NM** Crude (JU'16) 26-Aug $/bbl 47.37 0.02% Gold (MY'16) 26-Aug $/oz 1,321.6 0.09% Gold (10g) Local 26-Aug PKR 44,657 -0.38% Silver (MY'16) 26-Aug $/oz 18.71 1.19% Cotton(KHI)-40 kg 26-Aug PKR 7,272 0.00% Kibor-6M 26-Aug % 6.04% 0.01% Forex Reserves 19-Aug $ Bn 23.08 2.02% Remittances Jul-16 $ Bn 13.28 -20.14% Exports* Jul-16 $ Bn 1.48 -7.45% Imports* Jul-16 $ Bn 3.56 5.52% Trade Balance* Jul-16 $ Bn -2.08 -17.20% Current Account Avg. CPI-FY17* Jul-16 Jul-16 $ Mn % -591 4.12 -152.56% WoW YoY Jul-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 GBP, 26-Aug-16, 138.9 EUR, 26-Aug-16, 118.4 145 To help payments mechanism: National Advisory Council looks to draft law on e-commerce The National Advisory Council (NAC) on e-commerce has decided to forward recommendations on the draft legislation to promote and protect consumer rights and data. In this regard, a meeting of NAC was held in the Ministry of Commerce with various stakeholders. The Council was tasked to put forward recommendations towards formalizing and legalizing e-commerce including legislation for protection of consumers rights and data. The meeting was attended by representatives from ministry of information technology, SBP and private sector, and discussed the potential scope of e-commerce, which can enhance country’s foreign reserves and exports to a great extent. Tribune – Sun. Dar seeks to quicken pace of PSX divestment Finance Minister Ishaq Dar wants divestment of shareholding of Pakistan Stock Exchange (PSX) to be completed speedily while ensuring transparency. The time for completion of the divestment of shareholding of PSX is end of Nov.’16 for which the process has already been initiated to be expedited for timely completion of the transaction. In this regard, all the received EoIs are being currently scrutinized which would be followed by due diligence and bidding process, etc. BR - Sun. Draft amendments to corporate sector rules issued Three years after its enactment, amendments are being made to the Public Sector Companies (Corporate Governance) Rules 2013 as the government functionaries have been facing issues in implementing existing rules. SECP issued the draft of amendments in the Rules and floated the document on its website to obtain feedback from all stakeholders including the public. The need for amendments in the Public Sector Companies (Corporate Governance) Rules, 2013, has mainly been pushed by the Economic Reforms Units of the Ministry of Finance. Dawn - Sun. IMF for better taxation of agriculture sector According to the IMF’s paper, titled 'Unlocking Pakistan's Revenue Potential'; it has been recommended that tax policy reforms in Pakistan must introduce presumptive taxes on agricultural turnover and landbased tax rates for better taxation of agricultural sector, common rate schedule of Capital Gains Tax regime (CGT) for all financial assets and integration of GST regime with a single statutory rate under one collection agent to increase revenue collection. The empirical findings indicate that a tax system with low elasticity cannot take full advantage of economic growth. BR - Sun. Exemption under Clause 126-F: LHC interprets applicability to KPK-Pata/Fata areas Lahore High Court (LHC) has ruled that three-years income tax exemption to profits and gains derived by taxpayers in the most affected and moderately affected areas of KPK-Fata/Pata areas under Clause 126-F of Second Schedule of the Income Tax Ordinance 2001, is not applicable in cases which are subjected to presumptive/final tax regime. The order will help in recovering billions of rupees of illegal refunds already picked by the taxpayers under the garb of Clause 126F that otherwise falls under Final Tax regime because of the reason large number of companies claimed illegal refunds after the introduction of Clause 126 F which was basically meant for businessmen of strife ridden areas of KPK and Fata. BR - Sun. 135 125 115 105 USD, 26-Aug-16, 105.7 95 85 75 Aug-15 Nov-15 USD Feb-16 GBP May-16 Aug-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Live daringly, boldly, fearlessly. Taste the relish to be found in competition – in having put forth the best within you." Henry J. Kaiser Chart of the Day Sector-Wise Repatriation of Profits from Pakistan on FPI (FY16) Financial Business Transport Equipment Chemicals Oil & Gas Explorations Cement Power Others Petroleum Refining Fertilizers Electronics Textiles Food Machinery Other than Electrical Trade Communications Tobacco & Cigarettes Transport 167.5 47.4 42.6 32.1 29.7 15.3 14.6 11.5 11.5 6.9 4.8 3.7 2.6 2.2 1.7 1.6 1.4 0 50 Value in Mn U.S $ 100 150 200 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