Day: December 22, 2021

For the first time in the country’s bleak startup history, the Securities and Exchange Commission of Pakistan (SECP) has awarded a Non-Banking Finance License to the highly popular Buy Now Pay Later (BNPL) startup QisstPay.

According to the company’s co-founder and CEO, Jordan Olivas, this license is a huge first for the business. With it, QisstPay is now Pakistan’s first and only legally operational BNPL and is eligible to expand into other areas such as vehicle financing, home financing, microfinancing, leasing in the future.

It is a significant step by the SECP at a time when the BNPL is facing regulatory scrutiny around the world, particularly in the United States and the European Union.

On account of being the first player of a BNPL service in the field, QisstPay’s latest challenge is getting both consumers and merchants on the same page by convincing them to use this new product. By focusing solely on a complicated and unusual market like Pakistan’s, CEO Olivas is positive that this new change promises big rewards for QisstPay in 2022.

As the name suggests, QisstPay is the fastest-growing installment payment service for emerging markets, and provides a payment solution to online buyers, merchants, and business partners while increasing their consumer base. It is Pakistan’s first BNPL platform, and is a promising game-changer in the world of e-commerce and fintech.

QisstPay allows its clients to avail of interest-free installments and promotes 60 percent higher traffic and thereby, higher-order rates leading to an increase in sales. By allowing BNPL services, QisstPay focuses on merchant and customer acquisition by stimulating bigger growths instead of transactional volume.

Source: Pro Pakistani

The federal cabinet has postponed the ratification of the proposed Rs. 360 billion mini-budget and a contentious central bank autonomy legislation to analyze government capital and national security.

The government has delayed the announcement for the imposition of taxes to the tune of Rs. 360 billion, according to a report by Express Tribune. It has also deferred a cabinet motion of the State Bank of Pakistan Amendment Bill, 2021, in order to meet the pre-conditions set by the International Monetary Fund (IMF).

The Federal Minister for Information, Fawad Chaudhry, said that while the (Supplementary) Finance Bill (mini-budget) had been pulled from Tuesday’s cabinet meeting agenda, the bill will be presented again in the coming days. Moreover, both the SBP Amendment Bill and the proposal for the mini-budget will be submitted to the cabinet by the end of this week, as stated by the Finance Advisor, Shaukat Tarin.

The cabinet had first enacted the SBP Amendment Bill reportedly without debate in March. In order to resurrect the $6 billion loan program, the Ministry of Finance gave up a lot of territory to the central bank, but in exchange, it was unable to secure accountability, thereby falling short of its fundamental goals.

Interestingly, the most important goal for any central bank is to maintain price stability through clear inflation targeting but this was not addressed in the SBP Amendment Bill. Pakistan’s desire to keep the door open for borrowing from the central bank was also denied by the IMF which also refused to agree on any serious accountability for the SBP.

The government’s inability to borrow from the central bank has left it at the mercy of commercial banks, which have recently demanded interest rates much higher than the key policy rate.

If Pakistan wants to be considered for the next $1 billion IMF loan tranche, it must approve the bills. The global lender has set preconditions for the resumption of the $6 billion bailout facility, including the levy of around Rs. 360 billion in new taxes and passage of the SBP Amendment Bill.

However, it appears that the administration will miss the IMF board meeting on 12 January, as getting parliament’s approval for both bills by the end of the month now appears to be highly improbable.

It is expected that the government will present a mini-budget during the parliament’s opening winter session (today), including fiscal adjustments and budget cuts totaling roughly Rs. 600 billion as part of an agreement with the International Monetary Fund (IMF), and opposition parties promise to fight the move vehemently.

Source: Pro Pakistani

A Memorandum of Understanding (MoU) between Habib Bank Limited (HBL) and China Machinery Engineering Corporation (CMEC) on Agricultural Cooperation was signed towards the end of the CPEC Industrial Cooperation B2B Investment Conference in Lahore.

Federal Board of Investment (BOI), in collaboration with the Punjab government, organized a B2B Investment Conference where Minister of State and Chairman BOI, Muhammad Azfar Ahsan, and Secretary BOI, Fareena Mazhar, were the keynote speakers, while other speakers included SAPM on CPEC Affairs, Khalid Mansoor, Chinese Ambassador to Pakistan, Nong Rong, Pakistan’s Ambassador to China, Moin ul Haque, and Minister of Industries and Commerce Punjab, Mian Aslam Iqbal.

Chairman BOI highlighted that CPEC Industrial Cooperation is all-inclusive in its scope and open to third-party participation. He invited the business community from China and all over the world to invest in Pakistan’s economic sectors.

Ahsan stressed that Pakistan has a liberal investment regime and apprised the participants on the various investor-friendly policies introduced by the incumbent government, including electric vehicle policy, mobile manufacturing, construction sector policies, Sole Enterprise Special Economic Zone Regulations 2020, SEZ Zone Enterprise Admin, and Sale/Lease/Sublease of Plot Regulations 2021.

The Chairman also informed the participants about the “Pak-China B2B Investment Portal,” which has been developed by BOI in collaboration with the China Council for International Investment Promotion, and both local and Chinese companies are being encouraged to register for creating the possibility of materializing potential JV opportunities.

The Chairman BOI further elaborated, “Pakistan accords top priority to the development of Special Economic Zones under CPEC.” He explained that currently, out of the nine CPEC SEZs, three are at an advanced stage of development, including Allama Iqbal Industrial City in Punjab, Rashakai SEZ in Khyber Pakhtunkhwa, and Dhabeji SEZ in Sindh. He further informed that attractive fiscal incentives are being offered under SEZs, including a tax-free period of 10 years and custom duty exemption on import of capital goods to both the developer and enterprises housed in the SEZs.

Secretary BOI, Fareena Mazhar, stated that there are ample opportunities for foreign investors to invest with 100 percent equity or joint ventures in various fields with the repatriation of investment and profit allowed with legal protection provisioned under the Acts of Parliament to foreign investment. The Secretary further added that government has a uniform treatment for local and foreign investors, along with 100 percent repatriation of profits and dividends, and there is no requirement of minimum investment for businesses startups.

While apprising the participants on the “Pakistan Regulatory Modernization Initiative,” Fareena stated that the platform had been established with a mechanism to transform the regulatory landscape across multifaceted tiers of government in Pakistan.

Fareena underscored that several international corporations and businesses have a long history of association with Pakistan and are earning a substantial return on their investments. Therefore, businesses communities are invited to reap optimum benefits from the lucrative and liberal investment regime of the government and explore investment opportunities available in different sectors of the national economy.

Special Assistant to PM on CPEC, Khalid Mansoor, spoke about the way forward on the process of industrialization in Pakistan under CPEC. He shared that now the entire focus is on phase-II of CPEC, which will be all about expansion and development. He added that during this phase, the four SEZs are being focused, with special attention given to textiles, IT, automobiles, pharmaceuticals, FMCG, and renewable energy. He also apprised the participants of the recent improvements introduced in the legal regime to facilitate investors by BOI & CPEC authority in regards to one window operations.

Provincial Minister of Punjab for Industries & Commerce, Mian Aslam Iqbal, talked in detail about the potential of economic sectors of Pakistan, especially those of Punjab with a special focus on agriculture, textile, food processing, etc. He also shared that there is a good opportunity for Chinese firms to invest in the Naya Pakistan Housing and Development Authority and mentioned the tourism sector of Pakistan as having great potential.

Chinese Ambassador to Pakistan, Nong Rong, and Pakistan’s Ambassador to China, Moin ul Haque, appreciated the steps taken by the government of Pakistan to further strengthen Pak-China relations by exploring areas of mutual cooperation. They also acknowledged BOI’s role in creating a business-friendly environment and facilitating Chinese investors every step of the way and renewed their commitment to work in close coordination with BOI.

The conference was a huge success in terms of turnover as more than seventy Chinese companies participated with an active interest in investing in Pakistan, and many other local and foreign investors were also present. The Board of Investment successfully sensitized potential investors about the investment regime of Pakistan, and the conference was followed by a B2B interaction between Chinese and Pakistani companies.

Source: Pro Pakistani

The Pakistani Rupee (PKR) fell to another new all-time low against the US Dollar (USD) and depreciated by 10 paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.57 against the USD during today’s open market session.

The PKR depreciated by 0.06 percent against the USD and closed at Rs. 178.15 today after it lost one paisa and closed at 178.05 in the interbank market on Tuesday, 21 December.

The local currency has lost 13.08 percent on a fiscal-year-to-date basis after recording another historic low today besides depreciating by 11.46 percent on a calendar-year-to-date basis.

While the rupee continues to post historic drops against the dollar, an interesting development on the sidelines suggests that Afghanistan may soon receive supportive liquidity from the United States through a channel of licensed UN agencies.

The development was announced at a news conference in Washington DC after a State Department official said that the US would be more flexible on financial restrictions imposed on Afghanistan following the Taliban’s takeover. He stated that the US had backed the delivery of $280 million to Afghanistan from a World Bank fund last week.

It is pertinent to note that the US had contributed $208 million in humanitarian aid to Afghanistan since August, bringing the total to $475 million this year.

These first signs of flexibility in favor of the war-torn country could offer support to Pakistan’s exchange unit as well since its devaluation was a consequence of the Taliban’s takeover of Afghanistan in August 2021.

In light of the PKR’s interbank performance during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked in a news column that Pakistan’s approach to addressing currency problems has been unquestionably yielding the desired outcomes so far.

The positive developments include improved efforts made by banks to speed up the procedure and open new branches. Some banks provide new products to non-resident Pakistanis in order to gain consumers. Incentives are often given to banks to recruit new customers, which will help put substantial support behind the local unit in the near term, Rizvi added.

The PKR resumed its declining trend against most of the other major currencies as well. It posted losses of 55 paisas against the Pound Sterling (GBP), 40 paisas against the Canadian Dollar (CAD), and 41 paisas against the Australian Dollar (AUD).

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

Conversely, the rupee appreciated against the Euro (EUR) and posted gains of 49 paisas in today’s interbank currency market.

Source: Pro Pakistani

In a bid to restore the confidence of taxpayers in the tax system and to ensure transparency and quick processing of the consignments, the office of the Federal Tax Ombudsman (FTO) has been consistently taking measures to eliminate maladministration and corruption in the Federal Board of Revenue (FBR).

An own motion (OM) investigation was initiated by Federal Tax Ombudsman through the exercise of the jurisdiction conferred under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance). The OM initiative was based on media reports that the facility of unaccompanied baggage (UAB) was being misused through clearance of goods in commercial quantity and of items that were non-bonafide baggage.

According to the Baggage Rules, 2006, related to UAB of passengers arriving in the country, baggage is defined as “personal wearing apparel and other personal, professional and household effects of a passenger”.

Rule 3 of the Baggage Rules specifies allowances for Pakistani nationals who do not avail transfer of residence and are entitled to import duty-free items, if the stay is more than seven days or in case of the first visit in a year. Rule 4 specifies allowances for availing transfer of residence facility in respect of passengers who had stayed abroad for more than two years.

It was observed that the existing system of clearance of baggage in the WeBOC computerized system was not being implemented in the majority of the baggage consignments which in turn provides an open opportunity of abuse through clearance of non-bonafide baggage in violation of legal provisions.

During the investigation, data furnished by the department was examined and it transpired that the Directorate of Reforms & Automation, Karachi had deployed the module in the WeBOC system for processing of baggage declarations (BDs) and Collectorates across the country are mostly using the module for processing of unaccompanied baggage except for the Collectorate of Preventive/Enforcement, Karachi which is the station where highest number totaling 10013 BDs were filed during the period from January 1, 2021, to October 25, 2021.

However, it was observed that the Collectorate of Enforcement used the said module on a test and trial basis in September 2021 i.e. after cognizance taken by FTO Office and due to delay and reluctance in the usage of BD module by the said Collectorate, a major chunk of BDs filed in the country were not processed through WeBOC module.

Being a glaring case of maladministration, Federal Tax Ombudsman has directed the FBR to ensure the processing of all Baggage consignments through the automated module in WEBOC without any exception. This will not only eradicate any chance of misuse of the subject facility but will also result in prompt processing of the bonafide baggage of the incoming passengers at various airports across the country.

Source: Pro Pakistani