Month: December 2021

The Sensitive Price Indicator (SPI) for the week ended December 30, 2021, recorded a decrease of 0.50 percent, says the Pakistan Bureau of Statistics (PBS).

The decline in SPI was due to a decrease in the prices of tomatoes (30.92 percent), potatoes (7.92 percent), chilies powder national 200 gm packet each (5.78 percent), onions (2.39 percent), LPG (1.59 percent), wheat flour bag 20 kg (0.42 percent) and pulse mash (0.22 percent).

According to the latest data, the SPI went down from 168.83 percent during the week ended December 23, 2021, to 167.98 percent during the week under review.

The year on year trend depicts an increase of 20.05 percent mainly due to an increase in electricity for Q1 (83.95 percent), LPG (68.30 percent), cooking oil 5 litre (59.06 percent), vegetable ghee 1 kg (55.71 percent), vegetable ghee 2.5 kg (55.24 percent), mustard oil (52.72 percent), gents sponge chappal (50.25 percent), washing soap (45.28 percent), gents sandal (44.49 percent), pulse masoor (36.08 percent), petrol (35.42 percent) and diesel (26.72 percent), while the major decrease was observed in the prices of tomatoes (39.55 percent), pulse moong (24.73 percent), onions (17.85 percent), eggs (9 percent) and potatoes (6.55 percent).

The SPI for the consumption groups up to Rs. 17,733, Rs. 17,733 to Rs. 22,888, Rs. 22,889 to Rs. 29,517, Rs. 29,518 to Rs. 44,175 and for above Rs. 44,175 decreased by 0.80 percent, 0.72 percent, 0.61 percent, 0.54 percent and 0.40 percent respectively.

During the week, out of 51 items, prices of 22 (43.14 percent) items increased, 07 (13.72 percent) items decreased and 22 (43.14 percent) items remained stable, said the PBS in weekly SPI data.

The commodities, which recorded increase in their average prices include bananas (3.19 percent), chicken (2.16 percent), tea prepared (2.05 percent), eggs (1.45 percent), pulse masoor (1.10 percent), vegetable ghee dalda/habib 2.5 kg tin each (0.87 percent), pulse gram (0.83 percent), rice irri-6/9 (0.71 percent), sugar (0.64 percent), garlic (0.63 percent), sufi washing soap (0.62 percent), rice basmati broken (0.55 percent), powdered milk nido 390 gm polybag each (0.46 percent), mutton (0.39 percent), curd (0.30 percent), pulse moong (0.25 percent), mustard oil (0.24 percent), beef with bone (0.17 percent), firewood whole 40 kg (0.13 percent), cooked daal (0.06 percent), gur (0.03 percent) and cooking oil dalda or other similar brand (sn), 5 litre tin each (0.03 percent).

The commodities which prices remained unchanged during the period included bread plain (small size), milk fresh, vegetable ghee dalda/habib or other superior quality 1 kg pouch each, salt powdered (national/shan) 800 gm packet each, tea lipton yellow label, cooked beef, cigarettes capstan, long cloth 57″ gul ahmed/al karam, shirting, lawn printed gul ahmed/al karam, georgette, gents sandal bata pair, gents sponge chappal bata, ladies sandal bata, electricity charges for q1 per unit, gas charges, energy saver, matchbox, petrol super, hi-speed diesel, telephone call charges and toilet soap lifebuoy.

Source: Pro Pakistani

The cabinet committee on privatization (CCoP) has decided to remove Mari Petroleum Company Limited from the list of privatization after a detailed deliberation on a proposal seeking divestment of the government’s shares in the firm.

Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the committee meeting held on Friday. Federal Minister for Privatization, Muhammad Mian Soomro, Minister for Energy, Hammad Azhar, Secretary Finance Division, Secretary Privatization Commission, Secretary Petroleum Division, and other relevant officers attended the meeting.

CCoP also discussed the proposal submitted by the Privatization Division for debt recapitalization and refinancing of the Government of Pakistan excess equity and Pakistan Development Fund Limited (PDFL) loan through commercial borrowing of the National Power Park Management Company Limited (NPPMCL).

The committee approved the proposals that NPPMCL should initiate debt recapitalization and refinancing process from local banks as per the Companies Act, 2017, while all the stakeholders should jointly support NPPMCL in executing the process. It directed revisiting the interest rate of K +1.80 % through competitive bidding.

Discussing a summary on privatization of Guddu Power Plant & Nandipur Power Plant, the committee directed the Ministry of Energy to obtain the CCoE decision about the privatization of the two power plants. It was further directed that a roadmap for the valuation of the assets of these power plants and a modus operandi for transfer of assets should be prepared and shared.

After deliberating on a summary seeking the privatization of SME Bank Limited and delisting it from Privatization Commission, the meeting constituted a committee under the chairmanship of Finance Minister and representatives from SBP, Securities and Exchange Commission of Pakitan, Finance Division, and Privatization Division to evaluate alternative options for proceeding further.

Source: Pro Pakistani

Chairman Federal Board of Revenue (FBR), Dr. Muhammad Ashfaq Ahmed, said on Friday that certain media reports misinterpreted various tax issues as many taxes which were reportedly imposed were in fact not levied.

Addressing a press conference, the Chairman FBR said the International Monetary Fund (IMF) was though a reality, many taxes claimed by media were not applied, adding that some taxes shifted from one place to another were also twisted in reports.

Dr. Ashfaq Ahmed pointed out that some changes were being made regarding tax laws through the Finance (Supplementary) Bill, 2021.

The tax reforms, he said, should have been made long ago. Nonetheless, in the previous regimes, tax exemptions were granted to specific interest groups instead of bringing a change in the tax laws.

He observed that the previous governments applied the taxes suggested by IMF, however, they left the tax exemptions on certain economic groups intact. This made the previous governments popular among such interest groups and it was done as it was right for their political interests, he added.

He mentioned that IMF always suggested and demanded tax reforms as it was the only way to move the economy to a sustainable position.

Source: Pro Pakistani

Afghanistan Revenue Department (ARD) and Federal Board of Revenue (FBR) concluded the second round of negotiations on the Double Taxation Agreement (DTA) between Pakistan and Afghanistan.

The four-member delegation of the Afghanistan Revenue Department (ARD) was on a visit to Pakistan, which commenced on 27th December 2021.

The inaugural session was presided over by Qaiser Iqbal, Director General (International Taxes), FBR, who welcomed the delegates and hoped that the proposed DTA between the two brotherly countries would go a long way in fostering economic relationships and would also contribute to the development of both the countries.

The negotiations were conducted in the most cordial and friendly atmosphere. Both the delegations discussed all the outstanding issues of the first round of negotiations held in Islamabad from 28th to 30th March 2016. Both sides presented and appreciated each other’s respective positions. However, it was agreed that the unresolved issues would be discussed and finalized in the third round of negotiations to be held in Kabul, Afghanistan on mutually agreed dates.

The Afghan delegation was led by Esmatullah Salimi, Revenue Audit Director, ARD, and included Abdul Wali Noori, Technical Deputy Director-General, ARD, Nida Mohammad Seddiqi, Legal Services Director, ARD, and Najeebullah Ahmadzai, Advisor to MoF.

The Pakistan delegation was headed by Qaiser Iqbal, Director General (International Taxes), FBR, and included Barrister Nowsherwan Khan, Chief (International Taxes), and Hira Nazir, Secretary (Tax Treaties & Conventions), FBR.

Source: Pro Pakistani

More than two-thirds of the $1.7 billion increase in textile exports from July to November 2021 is due to an increase in global prices. In other words, had international prices remained the same from last year, the dollar value of textile exports would have only climbed by 7.8 percent.

The Economic Advisory Group (EAG), in its report titled ‘New Vision for Economic Transformation’, has asserted that the rise in textile exports during the first half of the fiscal year 2022 rose due to high international prices and currency devaluation.

Overall, EAG analyzed the factors that drove the increase in exports in recent years. The report findings reveal that variations in the actual effective exchange rate explain the majority of the slowdown in export volume between 2015 and 2018 and the subsequent growth since 2018.

Changes in global economic conditions have also had an impact on the volume of exports. For example, during COVID-19, a reduction in global economic activity resulted in a 25 percent drop in exports compared to the trend (blue bars below). However, since then, the global economic recovery has had a beneficial impact on Pakistan’s export performance throughout most of the financial year.

The favorable exchange rate regime, in particular, not only reversed the detrimental effects of exorbitant exchange rates between 2015 and 2018 but also aided in further stimulating them by roughly 5-10 percent relative to the trend.

The data also highlights the favorable exchange rates and the world demand account, with government subsidies having a negligible or minor impact on export volumes. These findings cast doubt on the value of government subsidies to industries in order to enhance exports.

In light of these findings, the Group urges the government to reconsider the incentives it has provided to these industries. It also stresses the need for the government to review its sectoral policies with the goal of rewarding innovators, improving land use within cities, negotiating market access to international markets, mainstreaming vocational training, and simplifying the tax code rather than picking winners.

Source: Pro Pakistani