Pakistan Daily Economy Update - 30 May

Transcription

1. May . 30, 2017 KCCI - eBulletin Opposition describes finance bill as jugglery of words The debate on Finance Bill 2017 began in the Senate with opposition lawmakers terming it as a jugglery of words, saying it has no relief for the poor and, continued exposing the much talked about economic reforms of the incumbent regime in its last budget. In this regard, Senator Salim Mandviwalla claimed that budget has nothing for lifting education sector with over 20Mn kids out of school, while PKR 20Bn have been allocated for laptop scheme. BR. Technology-driven products/services: Residents, AOPs' profit to be exempted from taxes The businesses engaged in technology-driven products or services falling under the category of 'Startup Business' would be exempted from taxes including withholding tax. In its budget 2017-18, govt. has introduced concept of 'Startup Business' for persons (being a resident individual, Association of Persons or Company having annual turnover of less than PKR 100Mn in last five tax years) certified by Pakistan Software Export Board (PSEB)'. BR. ECC-approved SROs given one-year extension The govt. has given one-year legal backing (up to Jun. 30, 2018) to the SROs expiring on Jun. 30, 2017. These SROs were issued by the FBR after approval of the ECC of the Cabinet. In this regard, the Finance Bill 2017-18 has made amendments to Customs Act 1969, Income Tax Ordinance 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005. In this regard, the said amendments would be enforced immediately and not particularly from Jul. 1, 2017 when the President would give his assent to the Finance Bill 2017-18. BR. Budget failed to inspire investor confidence: PBC The Pakistan Business Council (PBC) has said that the federal budget should have included measures to generate more jobs, promote value-added exports, encourage import substitution and demonstrate stronger political will to broaden the tax base. Super tax, tax on bonus shares and retained reserves act as penalties for success rather than encouragement for investment. Super tax has now entered its third year, resulting in an aggregate tax rate of 40% twice the average tax rate in Asia. Retained reserves will continue to be taxed albeit on a different basis, impeding capital accumulation and thus investment. Dawn. LSM registers 5.06% growth Large Scale Manufacturing (LSM) has witnessed an impressive 5.06% growth during 9MFY17 as compared to 4.6% in the same period last year. Year on Year, LSM recorded significant growth of 10.5% in Mar.’17 as compared to 7.6% of Mar.’16. The Nation. Govt. approves PPIB-AEDB merger In a key policy decision, govt. has approved merger of Private Power and Infrastructure Board (PPIB) and Alternate Energy Development Board (AEDB) aimed at providing one window facility to the power sector investors. Both the organizations dealing with private power projects are under the administrative control of Water and Power Ministry. In its summary, Ministry had requested approval to a draft Bill whereby the AEDB Act, 2012 was repealed and the PPIB Act, 2012 was amended so as to empower PPIB to undertake functions of AEDB in addition to its existing functions. BR. Govt. decides to take LNG policy 2011 to CCI The govt. has decided to take LNG Policy 2011 to Council of Common Interests (CCI) to address reservations of the federating units. Petroleum Ministry has prepared a summary in this connection that will be taken up in the very next CCI meeting. In this regard, Sindh and KPK Chief Ministers expressed their reservations on water, power and gas projects during their separate meetings with Prime Minister Muhammad Nawaz Sharif. Sindh govt. has argued that as the LNG is a form of gas and being transported through Sindh so all issues related with the transportation, distribution and swapping must be discussed at the CCI meeting as per article 158 (i) of the Constitution. BR. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (JY'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 26-May 29-May 29-May 29-May 29-May 29-May 29-May 29-May 29-May 29-May PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.86 106.15 52,139 -6.95 50.13 1,267.6 42,814 17.41 7,272 6.14% Forex Reserves 19-May $ Bn 21.01 -0.01% -0.19% -0.95% NM** 0.52% -0.08% -0.10% 0.40% 0.00% -0.01% WoW 1.59% YoY -2.79% -2.29% 19.88% -40.12% -204.75% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Apr 17 Remittances $ Bn 15.60 Jul-Apr 17 Exports* $ Bn 16.92 Jul-Apr 17 Imports* $ Bn 43.47 Jul-Apr 17 Trade Balance* $ Bn -26.56 Jul-Apr 17 Current Account $ Mn -7,247 % 4.09 Avg. CPI-FY17* Jul-Apr 17 May-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 May-16 Aug-16 USD GBP Nov-16 Feb-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day Senate body approves ‘The Right of Access to Information Bill, 2017’ The Senate’s Information and Broadcasting Standing Committee has unanimously approved 'The Right of Access to Information Bill, 2017. BR. “Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing or learning to do.” Up to 300% increase in prices of fruit, vegetables Consumer items have become up to 3 times more expensive in Ramazan, as retailers are overcharging consumers in the absence of an effective price checking mechanism. According to a handout issued by the Karachi commissioner, action was taken against 333 retailers involved in overcharging consumers. Of them, 23 retailers were sent to jail and over PKR 700,000 fine was imposed on others. Dawn. Chart of the Day Pele Share of Direct & Indirect Taxes in FBR Revenues Census results expected in July’17 Governor of Sindh has said that the 2017 census is complete and the results will possibly be announced in July as the census will contribute to the just distribution of resources, better facilities, regional progress and improvement in the life of the common man. Dawn. 70.0% Brokerages brace for surge in foreign inflows With only two days left before Pakistan’s formal inclusion in the MSCI Emerging Market Index, PSX and major brokerages are bracing for what they see as a large inflow of foreign funds. The gross amount of inflows is likely to be five to six times the PSX daily turnover as per the estimates but the inflow will only be in a limited number of blue-chip stocks and is unlikely to impact the broader market. Only a handful of stocks are likely to be affected. Dawn. 40.0% SECP takes steps for seamless flow of capital SECP has approved certain measures to ensure transparency and smooth trade on the Pakistan Stock Exchange (PSX) following the country’s reclassification as emerging market by MSCI. The SECP said minimal changes have been made to the system while the trade cycle continues smoothly. The SECP has introduced a post-close trading session wherein trading will only be allowed at the closing price determined during the closing session of the market. This will allow investors to execute trades through market on close orders. For settlement of trades, the central bank has extended the timings for the real-time gross settlement system until 3:30pm during the first week of Ramazan. Dawn. Steel set to become expensive as budgetary measures kick in Construction costs are set to go higher as the steel industry announced its plan to increase prices by PKR 2,500-3,000/ton from 1st Jul‘17, citing increase in sales tax rates for the steel industry from the current PKR 9/unit to PKR 10.5/unit in Budget 2017-18. Dar said that the government took this decision after consulting the industry. However, the industry official said that it was like forcing someone to accept something at gun point. Tribune. 63.3% 63.2% 60.8% 57.4% 60.0% 50.0% 36.8% 36.7% 39.2% FY12 (R) FY13 (R) FY14 (R) 57.3% 42.6% 42.7% FY15 (R) FY16 (R) 60.8% 60.3% 39.2% 39.7% FY17 (R) FY18(B) 30.0% 20.0% 10.0% 0.0% Direct Taxes (%) Indirect Taxes (%) Source: KCCI Research, MoF 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