Pakistan Daily Economy Update - 6 April

Transcription

1. Apr . 06, 2018 KCCI - eBulletin PM announces simplified income tax package, amnesty scheme for foreign assets PM Abbasi, after a meeting of the Economic Advisory Council, has announced tax reforms aimed at clamping down on tax evaders. The maximum income tax percentage, currently standing at about 30%, has been brought down drastically. The govt. previously used 12 tax brackets for salaried individuals and eight for self-employed individuals to calculate their income tax liabilities. However, these tax brackets have now been simplified to four. The previous maximum income exempt from income tax was PKR 33,333 monthly. However, now people making less than PKR 100,000 monthly will be exempted from paying taxes. People who make between PKR 1.2Mn to PKR 2.4Mn will be liable to pay 5% in income tax. The income tax for the PKR 2.4-PKR 4.8Mn bracket will be 10%. Those earning over PKR 4.8Mn annually will be liable to pay 15% tax on their income. Dawn. Credibility of tax system hard to restore through new amnesty: economists PM Abbasi has unveiled economic reforms agenda primarily aiming to enhance the number of taxpayers. The PM’s new move authorizes 120Mn national identity cardholders holding foreign assets abroad to get their belongings documented with the tax authorities against up to 5% payment. Regarding the new tax reforms announced by PM, Zubair Motiwala, ex-president Karachi Chamber of Commerce and Industry (KCCI), has said that in the next six months, $ 2-3Bn can be expected from people who want to declare their anonymous foreign assets. Similarly, President (KCCI), Mufassar Malik, has said that the repatriated foreign money should be used in industrial development. The News. Amnesty scheme may retrieve $4b stashed abroad: experts The business community has welcomed the PM’s announcement of one-time tax amnesty scheme to bring back the offshore wealth and regularize foreign assets of Pakistanis living abroad with tax rate of just 2%, paving way for the country to receive around $ 3-4Bn. The business community has hailed the govt. decision of one-time tax amnesty scheme. They have said that only 20% of registered tax payers actually pay taxes and Pakistan's tax-to-GDP ratio of about 12% is the lowest regionally and among the lowest globally. One of the economist said that policymakers need to ensure that such schemes are not politically motivated, but part of a wider tax reforms. The Nation International Islamic Trade Finance Corp agrees to lend $ 3.29Bn Hani Salam Sonbol, Chief Executive of International Islamic Trade Finance Corp has agreed to lend Pakistan with $ 3.29Bn. Pakistan will be given $ 3Bn to finance trade activities while the remaining $ 285Mn would be given to finance gasoline purchases for a period of three years. Jeddah-based International Islamic Trade Finance Corp is the financing arm of the Islamic Development Bank for trade activities. BR. PKR 150-200Bn needed for smooth power supply in summer Federal Secretary of Power Division Yousaf Naseem Khokhar has informed that power sector needs PKR 150-200Bn to bring down the circular debt to PKR 325Bn to run itself smoothly in the next 4-5 months. However, in case, the finance ministry fails to provide the amount to the Power Division, then the load shedding will continue to haunt masses during the caretaker regime. The News. Neelum-Jhelum power project connected to national grid Neelum-Jhelum power project has been connected to the national grid with a successful connection of 500KV. This project has a 960MW electricity production capacity and the connection has been made from Nokhar to Rawat.500KV Rahim Yar Khan and 220KV Mansehra have also been connected with national grid station which will help improve power supply to South Punjab and Hazara division. The Nation. \ Economic Indicators List of Indicators Date / Period Unit Value Change Daily 5-Apr 115.61 116.55 0.00% 0.17% Crude (MY'18) 5-Apr 5-Apr 5-Apr 5-Apr PKR PKR Pts. $ Mn $/bbl 46,561 1.30 63.68 0.99% NM** 0.20% Gold (MY'18) Gold (10g) Local 5-Apr 5-Apr $/oz PKR 1,326.7 50,485 -0.54% -0.09% Silver (MY'18) Cotton(KHI)-40 kg 5-Apr 5-Apr $/oz PKR 16.36 7,823 0.43% 0.00% Kibor-6M 5-Apr % 6.50 $ Bn 17.80 0.00% WoW -0.85% Remittances 30-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.20 Jul-Mar 18 Avg. CPI Discount Rate % 6.00 Mar-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 175 GBP, 5-Apr-18, 162.4 165 155 145 EUR, 5-Apr-18, 141.8 135 125 115 USD, 5-Apr-18, 115.7 105 95 Apr-17 Ministries, divisions asked to submit revised PSDP estimates by 15th Planning Commission has directed the ministries and divisions to submit the revised PSDP 2017-18 estimates by Apr.15, 2018. The decision has been taken because ministries are able to utilize less than 50% during the first three quarters for the current fiscal. Against the total allocation of PKR 287.80Bn, the ministries have got only PKR 129.12Bn which is less than 50%.The Nation . Thar coal: $ 5Bn investment mobilized for exploration: Ahsan Planning Minister Ahsan Iqbal has said that $ 5Bn investment has been mobilized for exploration of Thar coal and it has capacity to generate 50,000MWs of electricity for four hundred years. While addressing at function regarding launch of 16 SDG innovation challenges, the Minister said that Thar coal is the first coal power project in the area which will become operational by the end of the following year. BR. Jul-17 GBP USD EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." Martin Luther King Jr. SBP asks exchange companies to strictly comply with AML/CFT regulations In a meeting convened to discuss issues regarding Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT), SBP has asked Exchange Companies (ECs) to strictly compliance with (AML/CFT) regulations to avoid any action by the Financial Action Task Force (FATF). During the meeting, exchange companies were also asked to upgrade their internal systems in the line with SBP guidelines to curb the money laundering and terrorist financing. BR. MPs ask SBP to report on waived off loans NA Standing Committee has recommended Finance Ministry to provide the details of written off loans of last 10 years, from the amount of PKR 100Mn and above. The committee also recommended SBP to inquire about the matter referred by the member regarding waive off loans by the govt. within 15 days. The committee recommended payment of 2% WHT adjustable for industrial importer at import stage for raw material. No Exemption Certificate would be issued to industries, commercial importers importing raw material under chapter 25 to 55 will pay @ 4% WHT as full and final. The committee also asked FBR to take measures towards documentations for bringing DC values and raised those by 15%.The Nation. -20.85% -50.03% 15.64% Chart of the Day BREAKUP OF CURRENT EXPENDITURE (1HFY18) Social Protection 0% Provincial 35% General Public 44% Education Affairs and services 2% Economic Affairs 1% Defence Affairs and Service 16% Public orders & safety affairs 2% 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