Pakistan Daily Economy Update - 31 May

Transcription

1. May 31 , 2016 KCCI - eBulletin PKR 1.67Tn development budget approved The National Economic Council (NEC), under the chairmanship of Prime Minister Nawaz Sharif, has approved a budget of PKR 1.67Tn for public-sector investment in FY17, while setting the economic growth target at 5.7%. For FY17, PKR 800Bn were set List of Indicators for the federal PSDP and another PKR 875Bn for the provincial development programmes. Whereas, the investment to GDP USD-Interbank target was set at 17.7% while national savings were targeted to be increased to 16.2% of the total size of the economy and USD-Open MKT the inflation target was set at 6% for new fiscal year. Tribune. PKR 1.67Tn development outlay, 5.7% growth target approved by Prime Minister Prime Minister Nawaz Sharif has chaired back-to-back National Economic Council (NEC) and federal Cabinet to approve the proposed expenditure ceiling of PKR 860Bn for defense expenditure, PKR 1.35Tn for mark-up as well as PKR 245Bn for pension and PKR 348Bn for federal govt. services. The govt. is said to have allocated PKR 169Bn for subsidies, PKR 40Bn grants to provinces, PKR 542Bn grants other than to the provinces as well as PKR 60Bn for net lending. The forthcoming budget sets around PKR 3.6Tn tax collection target for FBR while non-tax collection target is fixed at PKR 950Bn. The withholding tax rate has been doubled for sellers to 1% for the filers of income tax returns and to 2% for non-filers. BR/The Nation. Cabinet green-lights PKR 4.42Tn deficit budget The federal cabinet has approved a deficit budget of PKR 4.42Tn, the proposals appear to strike a balance between fiscal consolidations and to boost earnings for next year. Budget proposes PKR 170Bn in new taxes which will largely overburden existing taxpayers. Further, the govt. is proposing to increase defence spending by over one-tenth to PKR 860Bn, up by PKR 79Bn from last year. The federal cabinet has also approved measures to further limit tax-free cash withdrawals from banks by linking the PKR 50,000 limit to one identity card against the current practice of unlimited banks accounts. Tribune. Govt to increase WHT rates for non-filers of tax The government is set to increase the rate of around 30 withholding taxes (WHT) for those who do not file their income tax returns, in the budget announcement later this week. Two major decisions have reportedly been taken in this regard — first, the existing WHT rates will be further increased and, second, the concept of higher rates will be extended to a maximum number of sectors. Currently, higher withholding tax rates apply for non-filers in 18 sectors including tax on dividend and banking transactions other than through cash. No change would be made in the law in the upcoming budget on bank transaction tax and the 0.6% tax on banking transactions exceeding PKR 50,000 a day would remain the same in the budget. The lower rate of 0.4% is applicable in the light of decisions of the ECC. Dawn. Circular debt surges 23% to PKR 633Bn in FY15 The unpaid electricity consumption bills by the private sector and the higher transmission and distribution (T&D) losses were the two leading factors that contributed to the circular debt, which rose 23% to PKR 633Bn in the year ended June 30, 2015. According to the Nepra Report 2015, the circular debt is still a major issue confronting the power sector and the receivables of the distribution sector increased by more than PKR 120Bn during 2014-15, of which increase of PKR 75Bn was due to the private sector. Nepra said that the increased circular debt included dues of PKR 43.97Bn that were to be paid by K-Electric. Tribune. Govt. mulling investing PKR 410Bn in power sector The govt. plans a PKR 410Bn investment in power sector with PKR 157Bn from the budget while NTDC, GENCOs and WAPDA would invest PKR 253Bn from their own resources in power generation and distribution projects. The National Economic Council (NEC) meeting presided over by Prime Minister Nawaz Sharif; was submitted a summary by Planning, Development and Reforms Ministry, stating that due to special security arrangements of the CPEC, 1% cost of 13 projects for development of Gwadar has been earmarked for security arrangements. BR. FED, ST to be increased on cement, steel, sugar and poultry The govt. would announce 17% sales tax on mineral water, a new Federal Excise Duty (FED) regime on cigarettes, PKR 1/kg FED on cement, 8% sales tax on sugar, 10% sales tax on poultry ingredients, enhanced sales tax on steel sector, new sales tax regime on marble industry (electricity consumption basis), 11.5% FED on beverages and 23 years exemption from sales tax and FED to businesses for Gwadar Free Zone, 40 years sales tax/FED exemption on materials/equipment, ship bunker oils for ships in Gwadar Port and ' No Tax No Refund regime' for textile, leather, surgical, carpets and sports sectors in budget (201617). BR. ST paid against provincial services: Finance bill to disallow input tax adjustment The Finance Bill 2016 would disallow input tax adjustment on sales tax paid against provincial services from FY17. In this regard, FBR has proposed that provincial sales tax on services may be excluded from the definition of input tax. Therefore, taxpayers registered with FBR would not be able to reclaim input tax adjustment against the services received from their service provider’s operative within respective provincial sales tax authorities. BR. Up to 11.8% hike in prices of petroleum products planned The Oil and Gas Regulatory Authority (OGRA) has worked out up to 11.8% increase in the prices of major petroleum products for Jun’16 on the basis of existing tax rates. In a summary sent to the government, the authority reported an increase in the international oil prices in May’16 which is required to be passed on to consumers unless the government cuts tax rates. Ogra worked out the ex-depot price of petrol at PKR 65.12/ litre from the existing PKR 62.27.It has also estimated the price of HSD to go up to PKR 79.21/litre from PKR 72.52. Likewise, price of high octane blending component has been recommended to be increased to PKR 74.86/litre from PKR 72.68. Dawn. Govt. wants to see more power companies in Karachi The federal govt. has expressed its desire to see more power distribution companies in Karachi, in a bid to foster competition and end the monopoly enjoyed by K-Electric in the country’s largest city. Water and power Secretary had asked K-Electric for zero load-shedding in Ramazan. He also told that a new policy was in the offing that will allow the provinces to establish their own electricity regulatory bodies and abolish power generation licenses. Tribune. SECP amends rules to limit corporate disputes The Securities and Exchange Commission of Pakistan (SECP) has amended the companies (General Provisions and Forms) Rules, 1985, particularly regarding transfers and further allotments of shares in the companies. The amendments are aimed at minimising the growing corporate disputes between shareholders and the management or within the management of companies. The amendments prescribe the detailed procedure for transfer of shareholding in a private company. Dawn. Economic Indicators Date / Period Unit Value 30-May PKR 104.86 Change Daily 0.04% 30-May PKR 105.20 -0.31% KSE-100 index FIPI 30-May 30-May Pts. $ Mn 36,235 -4.94 -0.84% NM** Crude (JU'16) 30-May $/bbl 49.57 0.36% Gold (MY'16) 30-May $/oz 1,207.9 -1.38% Gold (10g) Local 30-May PKR 41,228 -1.03% Silver (MY'16) 30-May $/oz 16.01 -2.05% Cotton(KHI)-40 kg 30-May PKR 6,093 0.00% Kibor-6M 30-May % 6.15% 0.01% Forex Reserves 20-May $ Bn 21.61 1.37% Remittances Jul-Apr 16 $ Bn 16.03 5.18% Exports* Jul-Apr 16 $ Bn 17.32 -12.99% Imports* Jul-Apr 16 $ Bn 36.34 -3.70% Trade Balance* Jul-Apr 16 $ Bn -19.02 -6.68% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-Apr 16 $ Mn % -1,519 2.79 17.71% WoW YoY May-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 GBP, 30-May-16, 153.7 155 145 135 EUR, 30-May-16, 117.0 125 115 105 95 USD, 30-May-16, 105.2 85 75 May-15 Aug-15 USD Nov-15 GBP Feb-16 EUR Source: KCCI Research ; Oanda.com Quote of the Day "All human power is a compound of time and patience." Honoré de Balzac Chart of the Day External Debt Position of Pakistan 69.56 3QFY16 62.73 3QFY15 61.69 3QFY14 61.29 3QFY13 3QFY12 65.63 3QFY11 65.61 60.03 3QFY10 54.00 56.00 58.00 60.00 62.00 64.00 66.00 68.00 70.00 72.00 Source: KCCI Research, SBP Value in $ Bn 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