Day: November 8, 2021

Shaukat Tarin, the Advisor to Prime Minister on Finance and Revenue, said that in order to achieve economic development, the tax-to-GDP ratio needs to be doubled.

During a ceremony in Islamabad, the Advisor mentioned that he has assured the business community that they will be facilitated and they will not be harassed by the Federal Board of Revenue if they are willing to pay more taxes.

He further said that to achieve 6-8 percent of growth, the current GDP-to-tax ratio of 9 percent has to be changed to 20 percent. Tarin informed that the authorities already had all the relevant data such as billing information, bank account statements, and traveling expenses. The government would further use artificial intelligence to estimate people’s income with 88 percent accuracy.

Shaukat Tarin went on to talk about the Kamyab Pakistan programme where he pointed out the inability of the large banks to disburse small loans. He also said that the government had developed a formula to disburse loans through microfinance banks and NGOs.

The advisor stated that under the Kamyab Nojwan program, a total of 4 million families or 30 million people will be provided with a free loan worth Rs. 0.5 million.

Talking about the economy, Tarin told the audience that the government was focused on taking the economy forward, especially with the help of the agriculture sector. He highlighted the importance of financing the agriculture sector and SMEs as they only receive 6-7 percent financing.

During the ceremony, PM’s Special Assistant for Youth Affairs, Usman Dar, highlighted the key features of the Kamyab Jawan Program, which provided business loans ranging from Rs. 100,000 to Rs. 25 million.

He said that an amount of Rs. 100 billion has been earmarked for providing business loans to youth, out of which loans of Rs. 30 billion have been approved for 22000 youngsters, and the remaining amount would also be approved soon. Furthermore, he mentioned that KJP had created 50,000 jobs and the skills for all programs have a 60-70 percent employability ratio, which shows its success. He thanked ICCI, NAVTTC, and other institutions, including banks, for their cooperation in KJP.

In his welcome address, Muhammad Shakeel Munir, President Islamabad Chamber of Commerce & Industry (ICCI), appreciated the launch of KJP to promote youth and assured that ICCI would fully cooperate to make it successful. He said that the youth was the most precious asset of the country and focusing on youth entrepreneurship would drive Pakistan towards fast economic growth besides reducing the unemployment issue.

He said that the government should address the concerns of traders on tax matters, including installation of POS, digital payments, bank accounts attachments, and sharing of taxpayers’ data by NADRA with FBR. He said that the Advisor to PM on Finance should visit major chambers of commerce starting from ICCI for consultation on budget proposals before finalizing the next budget.

 

 

Source: Pro Pakistani

The management of the Pakistan Stock Exchange (PSX) has proposed a reduction of brokerage commission on Fixed Income Exchange Traded Fund (ETF) from 0.15 percent (3 paisa) to 0.01 percent (1 paisa) of the transactional value.

According to the notification, the step is being proposed to promote the acceptability and marketability of fixed-income ETFs as a viable investment option for investors. It is considered important to have a different structure of minimum brokerage commission for both classes of ETFs.

It is important to mention that there are some inherent features of fixed income ETF that distinguish it from equity class ETF.

The upside potential of equity class ETF is significantly higher than that of fixed income ETF as stock may hit the upper cap of the circuit breaker in a trading day but T-Bills/PIBs are least likely to show much volatility, particularly when the interest rates are at a low level, the notification said.

The current impact of brokerage commission of 0.3 percent (on both buy and sell sides combined on an intraday trade will bound the investors to hold the units of fixed income ETF for at least 2 weeks (assuming an annual return of 8 percent) just to reach the breakeven.

The management sought views and comments of the interested parties on the amendments of reduction in brokerage commission from 3 paid to 1 paisa of the transactional value.

 

 

Source: Pro Pakistani

The Federal Board of Revenue (FBR), in collaboration with the United Nations Office on Drugs and Crime (UNODC), organized outreach and capacity-building sessions for Designated Non-Financial Businesses and Professions (DNFBPs) to ensure AML/CFT compliance in Karachi.

The representatives from the Financial Monitoring Unit (FMU), National Counter Terrorism Authority (NACTA), and Ministry of Foreign Affairs (MoFA) were the key-note speakers in the training sessions. The participants included real estate agents, jewelers, accountants, and lawyers.

In his opening remarks, Mr. Mohammad Iqbal, DG DNFBPs, stressed the need to combat money laundering in its all forms and manifestations. He apprised the participants of the measures taken by FBR to facilitate the DNFBPs and help build their understanding through various activities, including webinars, guidance documents, and face-to-face training sessions.

DG DNFBPs further emphasized that while the FATF actions on DNFBPs have largely been addressed, FBR, as the AML/CFT regulatory authority, would continue supervising the DNFBPs for implementation of the AML/CFT regime so that the money generated through crimes cannot be concealed in real estate and gold or precious stones. The sessions were warmly appreciated and generously acknowledged by all the participants.

 

 

Source: Pro Pakistani

The Pakistani Rupee (PKR) has posted losses against the US Dollar (USD) for the second time since last week as the local unit deteriorated by 50 paisas against the greenback in the interbank currency market today.

The local currency maintained its shape against the USD on Friday, a trend that was observed in April 2020, and also managed to stay unhinged against the USD and closed at 170.01 in the interbank market.

As is the case with fiat currency trends, bull runs sometimes require retreating back and forth in order to gain more strength. However, this is the third time that the PKR has retreated within just seven days. Moreover, the effects of the Saudi relief package seem to have gone cold despite the State Bank of Pakistan having recently received a straight-up $3 billion deposit in support payments.

Asad Rizvi, the former Treasury Head at the Chase Manhattan Bank, commented on the matter earlier in the day, and said, “Though PKR gained nearly 3%, the tumultuous week ended with PM relief package & with surprise decisions”.

He added, “In a hurry, Petroleum price was hiked 11 days before the scheduled date, followed by a hike in electricity, sugar, ghee & edible oil prices. Yet is waiting for direction”.

The PKR also reversed its gains against other major currencies from last week and posted losses in the interbank currency market today.

It posted losses of 45 paisas against the Canadian Dollar (CAD), 37 paisas against the Pound Sterling (GBP), 52 paisas against the Australian Dollar (AUD), and 78 paisas against the Euro (EUR).

It also posted a blanket loss of 13 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR) in today’s interbank currency market.

 

 

Source: Pro Pakistani

Senior representatives of one of the world’s largest investment banks, JP Morgan Chase & Co., called on Federal Minister for Privatization, Mohammed Mian Soomro, to discuss privatization of the National Power Parks Management Company (NPPMCL) on Monday.

The meeting was held in the backdrop of the government’s plans to privatize two regasified liquified natural gas (RLNG) power plants of Haveli Bahadur Shah and Balloki.

It is to note that the government has initiated a process of implementing economic reforms in the power sector. As a part of the reforms, the Ministry of Privatization is seeking to privatize various state-owned entities to enhance capital formation outside the government budget and to improve efficiency through competition, accountability, managerial autonomy, and profit incentives.

The process of privatization of two RLNG plants was slowed down due to the COVID-19 pandemic. Twelve parties were prequalified in April 2020. The process restarted after the COVID-19 restrictions were relaxed. At present, the Ministry is pursuing debt-refinancing and recapitalization for NPPMCL, with local banks.

Expressing his views, MD JP Morgan said the consortium of Qatar Investment Authority (QIA) was a strong contender of the said power plants.

The representatives inquired about the current volume of circular debt, payment due to the IPPs, and the huge receivables of NPPMCL, which could have a negative impact on the potential investment in the sector.

Federal Minister Mohammed Mian Soomro said a number of meetings were held with the Ministry of Energy and Finance Division, adding that the local banks and DFIs were considering providing a significant portion of debt for NPPMCL.

The meeting participants were briefed that the Ministry of Privatization had resolved various key issues to make this transaction viable.

Federal Minister hoped that the transaction would be completed in the ongoing fiscal year owing to a strong response from investors.

The delegation included Asif Raza, Managing Director, Global Corporate Bank CEEMEA, Imran Zaidi, Managing Director, Global Corporate Bank MENA, and others. Senior officials of the Ministry also attended the meeting.

 

 

Source: Pro Pakistani