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Pakistan Daily Economy Update - 6 March

IM Insights
By IM Insights
3 years ago
Pakistan Daily Economy Update - 6 March


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  1. March 6 , 2021 KCCI - eBulletin Pakistan, IMF agree to lower FBR’s tax collection target Pakistan and IMF have agreed to revise downward the annual tax collection target of FBR by PKR 246Bn, from PKR 4.96Tn to PKR 4.72Tn for FY21 in order to revive the stalled extended fund facility (EFF) program. FBR has so far collected PKR 2.92Tn during 8MFY21 and would have to collect PKR 1.8Tn during the next four months (PKR 450Bn per month) to materialize its downward revised target. IMF and Pakistan have also agreed to fix next budget’s FBR target at PKR 6Tn, a gigantic task. The News. Vehicles’ import: FBR changes definition of ‘tourists’ FBR has changed the definition of 'tourists' for allowing temporary import of vehicles by tourists without payment of duties and taxes for a period of 6 months. The FBR has proposed amendments to the Customs Rules 2001 through a notification. According to the , the "tourist" means a person not normally resident in Pakistan, who enters Pakistan for a stay of not more than six months in the course of any 12 months period for legitimate non-immigrant purposes. BR. APTMA opposes import of yarn from India APTMA has urged the govt. not to allow import of yarn from India aimed to keep the prices stable in the domestic market. It said there is drastic decline in price of fine counts of yarn by PKR 10,000 per bag in the Faisalabad yarn market which is in expectation of massive tax evasion plan by individuals in anticipation of permission be allowed to import cotton yarn from India through Wagah Border. The industry has procured cotton at very high prices and they are not in a position to sustain these losses. About 90% of yarn produced in the country is available for the domestic market and there is no shortage of yarn in the country, it added. BR. Govt debt surges by 11% to PKR 36.53Tn The federal govt.’s total debt increased to PKR 36.54Tn by end-Jan’21 against PKR 32.99Tn in end-Jan’20, up by almost 11%, or PKR 3.54Tn. Govt.’s domestic debt increased 12.4% to PKR 24.5Tn as compared with PKR 21.79Tn. External debt at end-Jan’21 was reported at PKR 12.04Tn against PKR 11.20Tn, an increase of PKR 832Bn or 7.42%. Major increase was reported in the long-term domestic debt, up 15.63% to PKR 19.37Tn against PKR 16.75Tn in end-Jan’20. Dawn. Power sector: MoF required to provide PKR 194Bn additional subsidy Ministry of Finance (MoF) is required to provide additional a subsidy of PKR 194Bn to the power sector for FY21, otherwise the shortfall of subsidy would be added to the rapidly increasing circular debt despite adjustment in power tariff. In the budget FY21, ahead of Covid-19 pandemic, PKR 140Bn was earmarked for power sector, which has now been estimated at PKR 334Bn after taking into account the relief provided to consumers consequent to the breakout of coronavirus. The power division has estimated PKR 516Bn subsidy for power sector for FY22, which is based on the relief provided to the consumers following the coronavirus pandemic. BR. \ OGRA decreases prices of RLNG for consumers OGRA has announced slight decrease of up to $ 0.0425 per MMBTU in the prices of Re-gasified Liquefied Natural Gas (RLNG) for the consumers of Sui Southern Gas Company and Sui Northern Gas Pipeline Limited. The Nation. Value Change Daily USD-Interbank USD-Open MKT 5-Mar 5-Mar PKR PKR 158.10 157.38 0.00% 0.00% KSE-100 index FIPI 5-Mar 5-Mar Pts. $ Mn 45,837 -2.22 1.23% NM** Crude (AP'19) 5-Mar $/bbl 66.09 2.42% Gold (MA'19) 5-Mar $/oz 1,701.1 0.45% Gold (10g) Local 5-Mar PKR 87,591 0.00% Silver (MA'19) 5-Mar $/oz 25.24 0.04% Cotton(KHI)-40 kg 5-Mar PKR 13,075 0.00% Kibor-6M 5-Mar % 7.65 0.00% 26-Feb $ Bn 20.13 WoW 0.46% Remittances Jul-Jan 21 $ Bn 16.48 24.08% Exports* Jul-Feb 21 $ Bn 16.30 4.29% Imports* Jul-Feb 21 $ Bn 33.84 7.49% Trade Balance* Jul-Feb 21 $ Bn -17.54 -10.64% Current Account Foreign Direct Inv. Jul-Jan 21 Jul-Jan 21 $ Bn $ Bn 0.91 1.15 135.85% -27.37% Forex Reserves YoY Jul-Dec 20 LSM Growth* % 8.16 % 8.25 Jul-Feb 21 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 GBP, 2-Mar-21, 219.5 225 215 205 195 EUR, 2-Mar-21, 190.0 185 175 165 155 145 USD Mar-20 USD, 2-Mar-21, GBP Jun-20 EUR Sep-20 158.1 Source: KCCI Research ; Oanda.com Dec-20 Mar-21 Quote of the Day “Make the most of yourself by fanning the tiny, inner sparks of possibility into flames of achievement.” Golda Meir Bill aimed at empowering govt to impose surcharge deferred again National Assembly Standing Committee on Power again deferred the Bill to empower the Federal Govt. to impose surcharge up to 10% per unit on all categories of electricity consumers, to pay interest on loans raised from banks to retire circular debt. BR. Energy sector: IMF, govt agree to freeze circular debt at current level The Govt. and IMF have reportedly agreed to freeze the energy sector circular debt at current level of PKR 2.4Tn till 30th Jun’23. Power Division and Finance Division have evolved a consensus on a number of measures like efficiency in the system, rationalization of subsidy, tariff increase and resolution of KE’s receivables. BR. Unit Pakistan's GDP as Proportion to World GDP 350 300 250 0.23% 0.23% 0.23% 0.23% 0.24% 0.25% 0.27% 0.26% 0.27% 0.28% 0.27% 0.29% 0.30% 0.30% 0.31% 0.36% 0.37% 0.38% 0.37% 0.32% Track & trace solution: FBR, AJCL sign agreement A contract has been signed between FBR and AJCL along with its lead partner Authentix Inc. USA and Mitas Corporation of South Africa to operationalize Track & Trace Solution on tobacco, cement, sugar and fertilizer sectors. The track and trace solution is to be rolled out across the tobacco, cement, sugar and fertilizer sectors from 1st Jul’21 in Pakistan with a view to enhancing tax revenue, reducing counterfeiting and preventing the smuggling of illicit goods through the implementation of a robust, nationwide, electronic monitoring system of production volumes and by the affixation of more than 5Bn tax stamps on various products at the production stage, which will enable FBR to track the goods throughout the supply chain. BR. Date / Period 200 Pakistan books 11 cargoes of LNG Pakistan has booked 11 cargoes of LNG to be imported during Mar’21 to partially bridge the deficit part of the fuel in the growing domestic economy. The imports would, however, be made at an eight-month high price at $ 9.59 per metric million British thermal unit (mmbtu). Tribune. 150 Nepra okays supply of additional 150MW to K-Electric Nepra has approved a tripartite power purchase agreement (TPPA) among K-Electric, National Transmission and Despatch Company (NTDC) and Central Power Purchase Agency (CPPA) for 150MW additional power supply to Karachi from the national grid. Under TPPA, power generation of 50MW each from wind power plants of Tenaga, Zephyr and Hydro China Dawood will be supplied to KE through the national grid. Dawn. 0 100 50 0.4% 0.3% 0.2% 79.7 77.6 78.3 89.9 105.6 117.8 137.3 152.4 169.7 167.1 176.7 213.3 223.1 230.6 243.9 270.2 278.0 304.6 313.1 276.1 PM nods abolition of corporate tax exemptions PM Imran Khan has granted a green signal for abolishing of corporate income tax (CIT) exemptions probably through a legal amendment within the next few days to satisfy the IMF’s executive board. The govt. will table CIT amendment bill before the parliament in order to fetch PKR 150 - 200Bn with effect from 1st Jul’21. The News. List of Indicators 0.1% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 PM asks FBR to focus on seven major areas PM Imran Khan has directed FBR to focus on seven major areas, ie, reforms in tax regime; simplification of tax codes (federal tax laws); plugging existing loopholes; reduction in discretionary powers of tax collectors; automation to bring transparency in tax system and tackling the issue of flying invoices. Tax regime should be reformed and structured in such a way that it facilitates businesses and help economy to grow, the PM added. BR. Pakistan GDP ($ Bn) GDP as % of World GDP (RHS) Source: KCCI Research; IMF Business Opportunity Pakistan to chair WTO body on trade, uplift Pakistan has been elected to the chair of Committee on Trade & Development (CTD) of the World Trade Organization (WTO) for 2021. CTD serves as a focal point for the consideration and coordination of work on development in the WTO. It considers a broad range of Members who are interested to do business with companies in issues relating to the trade of developing countries. Dawn. Brazil can find opportunities in the following two links: Colonisation of 2nd CPEC SEZ begins After the launch of CPEC’s first Rashakai SEZ, colonisation of 2nd CPEC SEZ Allama Iqbal Industrial City (AIIC) Faisalabad has begun with English: https://bit.ly/3sLyDeI planned Rs 53.6 billion investment. In this regard, a meeting of the AIIC SEZ Committee accorded approval to 15 applicants and allotted land of 320 acres. The Nation. Urdu: https://bit.ly/3sKSM4G