Day: December 9, 2021

Chairman of Ora Developers, Naguib Sawiris, on his visit to Pakistan, expressed high hopes for the real estate sector of Pakistan, adding that Pakistan is an ‘investment heaven’ for foreign investors. He visited Eighteen, a luxury housing society located near Islamabad International airport, where he commented on the potential of the local housing sector and offered an optimistic outlook for future growth.

Naguib Sawiris also met the Prime Minister of Pakistan, Imran Khan, during his visit to Pakistan.

While talking to journalists during his visit to the Eighteen site, he appreciated the greater focus by the government on the real estate sector and softening the construction policies, and extending greater opportunities for businesses to flourish. Such policies have helped speed up the development of real estate projects and provided a major boost to industry growth.

The Egyptian tycoon said that the development of Eighteen will revolutionize the real estate sector of Pakistan because it will cater to the tastes of an urban class like never before. Regarding the construction progress of Eighteen, he announced that the project is successfully moving towards its completion, and from next year, the customers will be handed over their villas. The Clubhouse, one of the main attractions of Eighteen, will also be launched in mid-2022.

Ora developers have the prestige of being a company with an international experience and vision that can truly transform Pakistan’s real estate landscape. Therefore, Naguib’s plans of expansion in the country offer a promising prospect for other potential investors.

Source: Pro Pakistani

An inquiry conducted by the Competition Commission of Pakistan (CCP) has found collusion and price-fixing of day-old broiler chicks by a prima facie cartel of eight hatcheries from 2019 to June 2021.

CCP initiated the inquiry after receiving several concerns expressed by broiler farmers through Pakistan Citizens Portal, complaining of cartelization in the sector behind the rising prices of day-old broiler chicks. CCP conducted search and inspections on the premises of the Pakistan Poultry Association (PPA) and a company allegedly involved in the sale of day-old broiler chicks in June 2021.

A forensic analysis of the evidence impounded from these premises revealed that an official of the said hatchery played a leading role in the cartel by working as the focal person to announce mutually agreed prices of day-old broiler chicks. The rates were conveyed to other hatcheries and PPA daily through SMS and WhatsApp. The same medium was used for discussion on pricing.

The evidence available with the inquiry team shows that the rate announced after mutual discussion between the competitors is the one that actually prevails in the market and that the rate of day-old broiler chicks is the same for all hatcheries. For example, on 26 April 2021, the official appointed as the focal person for coordinating rates messaged to another hatchery “Rs. 82.5 for three days”.

When checked, market information on day-old broiler chicks rates showed that the actual rate was Rs. 82.5 for the next three days. PPA was also found in prima facie violation of Section 4 of the Act, as its official was also a part of the WhatsApp group and announcement of rates through SMS and was aware of the pricing discussions and announcements.

In the instant matter, it appears that the companies are making a collective decision on prices which culminates in the announcement of a single price by a designated official. This prima facie price-fixing arrangement between competitors clearly violates Section 4 of the Competition Act, 2010.

It is observed that month-wise average day-old broiler chicks prices widely fluctuated during the year (2020-21) between the range of Rs. 20.46/chick (minimum) to Rs. 79.74/chick (maximum), and the share of day-old broiler chicks in total cost changed accordingly. Its average share in cost was 17% throughout the year, and when the day-old broiler chick was priced at Rs. 79.74, its share in total cost per kilogram of meat was 24.10%. The other major cost component is poultry feed which accounts for approximately 68% of the cost of production of chicken.

In May 2021, CCP found prima facie cartelization by poultry feed companies and issued show-cause notices, leading the inquiry team to conclude that approximately 85% of the total input cost for broiler was artificially increased/controlled by prima facie cartels. The feed mills have obtained stay orders from Lahore High Court against the show cause proceedings.

It is also interesting to note that most of the hatcheries involved in the prima facie cartel are vertically integrated and involved in the entire poultry supply chain, from breeding to the production of poultry feed.

Following the findings of the inquiry report, the Commission will issue show-cause notices to poultry companies involved in the production and sale of day-old broiler chicks for prima facie violation of Section 4 of the Act.

Source: Pro Pakistani

The Federal Board of Revenue (FBR) on the direction of the International Monetary Fund (IMF) has proposed to establish an asset declaration system.

According to sources, the tax department in the supplementary finance bill 2021 proposed that disclosure of information of high-level public officials should be made.

It is pertinent to note that IMF had asked Pakistan to establish an asset declaration system with a focus on high-level public officials by end-June 2021, however, Pakistan was unable to establish the asset declaration system.

The Memorandum of Economic and Financial Policies issued by IMF states that priority measures include the establishment of an asset declaration system with a focus on high-level public officials by end-June 2021, publication of the second review cycle report under the UN Convention against Corruption (UNCAC), and review of the institutional framework for Pakistan’s anticorruption institutions by international experts. In addition, efforts to enhance international anti-corruption cooperation and recover stolen assets abroad are encouraged.

The IMF also asked to enhance the use of anti-money laundering (AML) tools to support anti-corruption efforts. It said that financial institutions should be effectively supervised to comply with due diligence obligations for politically exposed persons and suspicious transaction reporting.

It further stressed that the effectiveness of Pakistan’s financial intelligence unit should be enhanced, and its membership in the Egmont Group should also be pursued.

Source: Pro Pakistani

Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin on Thursday said that he expects GDP to grow more than the target in fiscal year 2022 (FY22).

He made these remarks while delivering a keynote speech at the “Dialogue on the Economy-2021” organized by Pakistan Business Council, in Islamabad.

The adviser said that the current trend in key economic indicators, as well as recent high-frequency indicators, are giving encouraging signals for growth and envisaged that GDP will likely grow more than the target in FY22 and sustain its momentum in the medium-term.

Highlighting the economic priorities, he said that the government is committed to introducing growth-oriented measures to stimulate economic growth, with a clear roadmap of strategic priorities, business facilitation, investment opportunities, revenue and expenditure plans.

He said that the aspiration was to lay the foundation of higher inclusive and sustainable growth so that the economy withstands any shock. These policies stabilized the economy while simultaneously improving the growth prospects.

He said that prudent fiscal reforms have helped in improving the tax-to-GDP ratio and improving revenue generation. Increasing tax collection and expanding the tax base were key objectives of the government’s financial agenda, he added.

The adviser identified priority sectors such as agriculture, information technology and industry modernization to boost exports and said special economic zones have been set up to attract foreign investment. The government is vigorously pursuing “Make in Pakistan” policy to promote export-oriented industrialization in the country. The government is making efforts to further investment climate and attract foreign direct investment (FDI) in the country, he added.

He also shared the steps taken to help the underprivileged through the social protection programs to improve the living standard of vulnerable segments of the society by empowering them.

The adviser expressed confidence that in the face of various challenges and risks persisting both at external and domestic level, the economy will be self-reliant and capable of competing with its competitors globally.

Source: Pro Pakistani

The National Electric Power Regulatory Authority (NEPRA) on Thursday increased the power tariff by Rs 4.74 per unit on account of fuel charges adjustment for October 2021

The increase will have an impact of around Rs. 60 billion, as expensive power was produced on imported furnace oil and diesel in the absence of required liquefied natural gas (LNG) supplies. The financial burden on consumers of ex-WAPDA distribution companies (Discos) will be reflected in the bills of December. However, the consumers of K-Electric and lifeline consumers will be exempted from the surcharge.

The cost of the fuel used in power plants is a pass-through item and is paid for by consumers. As per the petition filed by the Central Power Purchasing Agency (CPPA), 10 percent more electricity has been generated from furnace oil in October. According to a CPPA briefing, the use of expensive furnace oil and rising global prices have resulted in generating expensive electricity.

During a hearing at NEPRA last week, CPPA informed the authority that violation of merit order resulted in a burden of over Rs. 1.77 billion and LNG shortage had caused a burden of over Rs. 1.69 billion.

NEPRA officials revealed that less electricity could have been generated from furnace oil had the LNG supply been in accordance with the demand. They said 15 percent of electricity, instead of 25 percent, had been generated from coal. It was disclosed that a unit of the China Hub Power plant had been off-the-grid for the last six months.

As per NEPRA notification, fuel price was determined at Rs. 5.17 per unit whereas electricity generated was at Rs. 9.91 per kWh. The authority, despite having reservations on the violations of merit order, generation of electricity on expansive imported fuels, and losses over rupee devaluation, allowed the distribution companies to charge their consumers an extra Rs. 4.74 per unit additional for each unit they consumed in October.

To put it simply, a consumer who used 300 units of electricity in the month of October will have to pay Rs. 1422 more for the cost of electricity and an additional 17 percent GST on the additional cost which comes to Rs. 241.74.

Source: Pro Pakistani

The Inland Revenue Enforcement Network (IREN) of the Federal Board of Revenue (FBR) seized 8,320,000 illegal cigarettes worth Rs. 21,479,625 involving duties and taxes of Rs. 17,242,635 in November, 2021.

In the first five months of the fiscal year 2021-22, IREN has seized non-duty paid cigarettes of Rs. 177,959,737 (approximately 74,131,500 sticks) resulting in detection of evasion of duties and taxes worth Rs. 142,905,265.

It is pertinent to mention that Prime Minister Imran Khan has recently launched Track & Trace System in the sugar sector. Therefore, IREN has also been entrusted to ensure its enforcement in the entire supply chain of the sugar industry.

For this purpose, the Chief Coordinator IREN and his Regional Enforcement Squads across Pakistan are geared to conduct raids and ensure seizures on the non-tax paid sugar stocks, which move out of the factory premises/warehouses without tax stamps. As a result, IREN squads have intensified their operations in every nook and corner of the country against the non-compliant supply chain operators dealing in the sugar sector in order to maximize revenue potential.

The squads have raided various sugar dealers in almost all big cities and various small towns to check sugar stocks. During these raids, Hyderabad Squad seized stock of 172 sugar bags without tax stamps in the premises of M/s Gulzar & Co. Action was initiated against those who were found involved in the tax evasion.

Chairman FBR, Dr. Muhammad Ashfaq Ahmed, has appreciated the performance of IREN squads and announced cash rewards for the officers who conducted successful raids. In a statement, he said the Track & Trace System coupled with IREN’s valiant drive would help overcome the menace of non-tax paid goods in the market.

Source: Pro Pakistani

The government has decided to retain sales tax exemption on electric vehicles and kits imported by local manufacturers of such vehicles under the Tax Laws (Fourth) Amendment Bill, 2021 to be tabled before the National Assembly.

Highly-placed officials told ProPakistani that the Tax Laws (Fourth) Amendment Bill, 2021 will withdraw sales tax exemptions of Rs. 350 billion in the coming days.

Furthermore, the government has decided not to impose a 17 percent sales tax on electric vehicles. The sales tax exemption would be retained on the import of CKD (in kit form) of the following electric vehicles by local manufacturers till 30 June 2026:

i. Small cars/SUVs with 50 kWh battery or below; and

ii. Light commercial vehicles (LCVs) with 150 kWh battery or below

The sales tax exemption would be retained on the import of CKD kits by local manufacturers of the following Electric Vehicles:

i. Road tractors or semitrailers (Electric Prime Movers)

ii. Electric buses

iii. Three-wheeler electric rickshaw

iv. Three-wheeler electric loader

v. Electric trucks

vi. Electric motorcycle

Some sales tax exemptions to be retained include import and supply of construction materials, machinery, equipment, and materials to Gwadar Export Processing Zone’s investors and Export Processing Zone Gwadar or other Export Processing Zones.

Exemptions available to the Chinese companies under the CPEC would also be retained after the issuance of the Tax Laws (Fourth) Amendment Bill, 2021. The sales tax exemption would continue on the import of plant, machinery, equipment, and raw materials for consumption of these items within the Special Technology Zone by the Special Technology Zone Authority, zone developers, and zone enterprises.

The exemption would be retained on the import of raw materials, components, parts, and plant and machinery by registered persons authorized under the Export Facilitation Scheme, 2021.

The Ninth Schedule (Mobile Phones); Eighth Schedule (Conditional sales tax exemption) and the Sixth Schedule (Exemption) of the Sales Tax Act 1990 would be minimized and only a few entries would be left in the said schedules. The Federal Board of Revenue will eliminate all zero-rated goods (Fifth Schedule), except on export and capital machinery goods, and move them to the standard rate of 17 percent sales tax rate.

FBR will eliminate exemptions (Sixth Schedule) excluding a small subset of goods (i.e., basic food, medicines, live animals for human consumption, education, and health-related goods) and bring all others to the standard rate of 17 percent.

Similarly, FBR will remove reduced rates under the Eight Schedule and bring all those goods to the standard sales tax rate. The Ninth Schedule of the Sales Tax Act may not be completely abolished, but some phones would be subjected to the standard rate of 17 percent sales tax.

The Third Schedule items would be retained on which sales tax has been charged on the basis of the printed retail price.

Source: Pro Pakistani