Day: January 7, 2022

Despite its efforts, the government has failed to stop the smuggling of goods from India and Iran into Pakistan, causing the economy to bear the brunt in terms of revenue and industrial output.

Sources in the Federal Board of Revenue (FBR) told ProPakistani that hundreds of tons of cloth was being smuggled from India, China, and Iran into Pakistan through different avenues. They said the Afghan Transit Trade Agreement was apparently being used for smuggling.

The cases registered during the calendar year 2021 in the jurisdiction of Faisalabad Customs Intelligence and Investigation were related to illegal cloth, curtains, and vehicles. Statistics show that the Customs officials confiscated 15.1 tons of Indian-origin chiffon cloth packed in bags bearing stamps of “Afghan Transit Trade” in the last year.

The officials also confiscated curtain cloth, weighing 25.9 tons, in their jurisdiction last year while a case has been lodged in this regard. They also confiscated 4.2-ton pile fabric and 15.2-ton curtain in another raid in Faisalabad besides 4.8-ton back coated pile fabric, 5.4-ton curtain/sofa cloth, and 2.3-ton pile fabric embossed in another operation by Faisalabad Customs last year.

According to data, around 63 tons of illegal cloth including 17-ton embossed cloth, 16-ton pile printed cloth, 24.8-ton pile plain cloth, 296-kg blankets (pile fabric), and almost 3-ton curtain/poshish cloth, and 1.8-ton prayer mat was confiscated and the case was registered in 2021.

The list further disclosed that that 17,930 kg parachute cloth of different types and 6.6-ton Tianjin golden bridge welding electrodes were also confiscated during the period under review and last calendar year and the case was lodged.

The Customs officials also confiscated 8.12-ton illegal Iranian skimmed milk, tubeless tires of different brands and sizes, pile fabric, and aluminum foil sheets of different sizes.

In yet another case, around 27.2-ton chiffon and women cloth was also confiscated during a raid by Faisalabad Customs Intelligence. The tires for LTV and Iranian spray-dried powder were also detected. The officials also confiscated Iranian toffee, and ceramic tiles, etc.

A report by the State Bank of Pakistan (SBP) indicated that bilateral trade between India and Pakistan has contracted to below $67 million during the first five months of the current fiscal year due to political tension between the two countries. According to the report, Pakistan’s exports to India were barely $140,000 during the first five months of the current fiscal year and its imports from India stood at $65.9 million from $80 million during the same period a year before.

Pakistan did not import or export anything from Iran due to sanctions on Iran. According to some experts, formal trade between the two countries decreased due to tariff and non-tariff barriers by authorities. During the period, informal trade through other countries including UAE, Iran, and Afghanistan did take place.

Source: Pro Pakistani

The Ministry of Commerce has planned to create an e-commerce business facilitation hub by ensuring facilitation for freelancers, e-commerce initiatives, and startups through effective coordination with SECP, FBR, and SBP.

Pakistan announced its first-ever E-commerce Policy, prepared by the Ministry of Commerce, on 1 October 2019. The policy aims to provide a launching pad to Pakistan’s e-commerce market and its exports while being a driver of youth empowerment and employment generation, export development, and increase investment/FDI in Pakistan through digital connectivity.

Pak e-SME program will be initiated to identify, train, enable, and connect 50,000 e-SMEs of the remote areas of Pakistan to online marketplaces for promoting e-commerce.

Further, an E-commerce Aggregator will be developed with Public-Private Partnership to showcase e-commerce companies of Pakistan to the world. Moreover, Pakistan was officially added to the sellers’ list of Amazon — one of the world’s largest e-commerce platforms — on 21 May 2021.

Source: Pro Pakistani

The Sensitive Price Indicator (SPI) for the week ended 6 January 2022, recorded an increase of 0.08 percent, stated the Pakistan Bureau of Statistics (PBS).

During the week, out of 51 items, prices of 25 (49.02 percent) items increased, 7 (13.73 percent) items decreased, and 19 (37.25 percent) items remained stable, stated the PBS in weekly SPI data.

The commodities, which recorded increase in their average prices include potatoes (5.23 percent), chicken (4.45 percent), hi-speed diesel (2.75 percent), powdered salt (2.75 percent), petrol super (2.68 percent), bananas (2.56 percent), onions (2.12 percent), pulse masoor (1.55 percent), pulse gram (1.46 percent), match box (1.45 percent), pulse mash (1.44 percent), pulse moong (0.98 percent), firewood whole 40 kg (0.82 percent), mutton (0.71 percent), garlic (0.69 percent), sugar (0.67 percent), milk fresh (0.46 percent), sufi washing soap (0.39 percent), beef with bone (0.34 percent), rice basmati broken (0.34 percent), cooked daal (0.29 percent), gur (0.17 percent), curd (0.17 percent), cooked beef (0.06 percent) and cooking oil Dalda or other similar brand (sn), 5 litre tin each (0.04 percent).

The year-on-year (YoY) trend depicts an increase of 20.08 percent mainly due to an increase in electricity prices for Q1 (83.95 percent), cooking oil 5 liter (56.75 percent), vegetable ghee 1 kg (53.85 percent), vegetable ghee 2.5 kg (53.26 percent), LPG (51.50 percent), gents sponge chappal (50.25 percent), mustard oil (48.59 percent), washing soap (45.85 percent), gents sandal (44.49 percent), pulse masoor (38.05 percent), petrol (36.13 percent) and diesel (28.07 percent), while major decrease observed in the prices of tomatoes (46.76 percent), pulse moong (24.70 percent), onions (12.02 percent), eggs (7.68 percent) and chilies powdered (3.30 percent).

According to the latest data, the SPI went up from 167.98 percent during the week ended 30 December 2021 to 168.12 percent during the week under review.

The SPI for the consumption groups up to Rs. 17,733, Rs. 17,733 to Rs. 22,888 and Rs. 22,889 to Rs. 29,517, went down by 0.28 percent, 0.18 percent, and 0.10 percent, respectively. For the consumption groups from Rs. 29,518 to Rs. 44,175, it remained the same and for above Rs. 44,175, it increased by 0.22 percent.

The commodities which recorded a decrease in their prices during the period under review include tomatoes (18.28 percent), chilies powder (14.54 percent), eggs (2.23 percent), LPG (0.96 percent), rice irri-6/9 (0.17 percent), wheat flour bag 20 kg (0.06 percent) and mustard oil (0.05 percent).

The commodities which remained unchanged during the period included bread plain, powdered milk, vegetable ghee Dalda/Habib 2.5 kg tin each, vegetable ghee Dalda/Habib or other superior quality 1 kg pouch each, tea Lipton yellow label, tea prepared, cigarettes capstan 20’s packet each, long cloth 57″ Gul Ahmed/Al Karam, shirting, lawn printed Gul Ahmed/Al Karam, georgette (average quality), gents sandal Bata pair, gents sponge chappal Bata pair, ladies sandal Bata pair, electricity charges, gas charges, energy saver Philips, telephone call charges, and Lifebuoy soap.

Source: Pro Pakistani

The Federal Board of Revenue (FBR) launched the National Sales Tax Return (NSTR) on Friday without the participation of the officials of the Sindh Revenue Board, the Khyber Pakhtunkhwa Revenue Authority, the Baluchistan Revenue Authority, the AJK Council Board of Revenue, and the Gilgit-Baltistan Revenue Authority.

Federal Minister for Finance and Revenue, Shaukat Fayaz Ahmed Tarin, presided over the launching ceremony of the National Sales Tax Return for all the federal and provincial sales taxpayers at the FBR headquarters in Islamabad, as the chief guest. However, only the Office of the Punjab Revenue Authority (PRA) attended it while the representatives of the provincial revenue authorities and boards and the Chief and Finance Ministers of all the provinces were absent.

A press release issued by the FBR detailed that for:

Achieving yet another significant milestone towards automation and data integration in order to facilitate the taxpayers, promote ease of doing business and reduce compliance costs, FBR has launched its National Sales Tax Return (NSTR), this afternoon. Federal Minister for Finance & Revenue, Shaukat Fayaz Ahmed Tarin, presided over the launching ceremony at FBR (HQs), Islamabad as the Chief Guest.

The Minister for Finance Minister addressed all the Members of the FBR, dignitaries, senior officers, and media representatives, and congratulated the Chairman of the FBR (also the Secretary of the Revenue Division) and his team for expediting this long-awaited initiative. “This milestone has been achieved only through a meaningful engagement of FBR with provincial revenue authorities, which is a good example of the cooperation and unity between these organizations,” he said.

Minister Tarin explained that taxpayers are required to file separate Sales Tax returns every month to each of the different Sales Tax collecting authorities due to the fragmentation in the Sales Tax payments.

“For example, a telecommunication service provider operating throughout Pakistan has to file returns every month to FBR, Sindh Revenue Board, Punjab Revenue Authority, Khyber Pakhtunkhwa Revenue Authority, Baluchistan Revenue Authority, AJK Council Board of Revenue and Gilgit-Baltistan Revenue Authority,” he clarified, and termed it a ‘very tedious and cumbersome task which often led to errors and disputes’.

He added that the reforms of the Sales Tax regime that had been introduced in the Supplementary Finance Bill 2021 and the new data repository developed by the FBR in collaboration with the National Database & Registration Authority (NADRA) are big leaps toward the documentation of the economy and the completion of VAT chain which had remained severed due to distortions.

He emphasized that the NSTR will be another pillar in the achievement of this objective, and the FBR will now be able to assess the indicative income of non-filers with sufficient accuracy through the use of technology.

Therefore, the National Sales Tax Return was developed after discussions and agreements were signed with the provincial revenue authorities, and they found it acceptable. The feedback from other stakeholders, including taxpayers and tax practitioners, is also very positive, it will save time and effort and will reduce compliance costs. Furthermore, this was also a key recommendation of international agencies such as the World Bank.

One of the greatest benefits of this system is that it encourages the harmonization of tax procedures, definitions, and principles between the federal government and the provinces, which will promote national unity and cohesion.

The Chairman FBR welcomed the Minister for Finance on the occasion, explained the scope and significance of the Sales Tax regime, and highlighted the salient features of the National Sales Tax Return. He added that the Sales Tax in Pakistan is fragmented among seven different revenue collecting authorities.

Sales Tax on goods is collected by the FBR for the federal government throughout Pakistan, whereas Sales Tax on services is collected by the provincial revenue authorities. Although this arrangement is according to the Constitution of Pakistan, 1973, it creates many practical challenges for taxpayers and tax collectors, the Chairman FBR explained.

He elaborated on the salient features of the NSTR and stated that the system will act as a single repository for all domestic transactions and invoice management. It will automatically apportion input tax, prepare the return, and work out the tax payable to each of the relevant authorities. The new system is based on the IRIS platform, which already has many built-in functionalities. It has linkages with POS transactions and Track & Trace which will contribute significantly to broadening the tax base and will ensure the ease of doing business.

The Chairman continued that the FBR is accelerating toward developing a similar National Income Tax Return to facilitate taxpayers while simultaneously maximizing tax compliance. He concluded by reiterating that these innovative and out-of-the-box digital interventions are primarily meant to enhance the Tax-to-GDP ratio to 15 percent over the short term.

Source: Pro Pakistani

The Ministry of Finance stated on Friday that the amendments proposed to the State Bank of Pakistan (Amendment) Bill were in line with the international best practices and aligned to the ground realities in Pakistan.

In a detailed clarification about the controversial bill, the Ministry said the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) would have full jurisdiction to investigate the State Bank of Pakistan (SBP) officials in criminal and corruption-related matters.

It added that indemnity was being proposed for actions taken in good faith so that where due care and due process were followed, officials were not afraid to take action. Similarly, all major policy decisions of SBP would continue to be made by the Board of Directors or the Monetary Policy Committee (MPC), constituted by the federal government. In fact, it maintained, additional checks and balances on the management of SBP were being added under the proposed amendments.

Addressing the concerns about the central bank becoming “a state within the state”, the Ministry clarified that SBP would continue to be a public institution that is owned by the government and works for Pakistan only and to deliver the best outcomes for Pakistani citizens within the mandate given to it by the government.

It further said that key officials of the SBP will continue to be appointed by the federal government, as is the current practice.

It further said that SBP will no longer focus on growth but only inflation. It added that focusing on price stability as the primary objective is sensible since inflation is one of the variables that the central bank can influence directly through its tools.

Addressing the concern that curbing central bank lending to the government will create hardships for the people, the clarification said that borrowing from the central bank has also contributed to a lack of fiscal discipline, low revenue generation in the form of one of the lowest tax-to-GDP ratios in the world, repeated booms and busts and the need for repeated assistance of International Monetary Fund (IMF).

It said that government borrowing from the central bank is equivalent to printing money that leads to inflation which in turn causes the currency to depreciate and an increase in the current account deficit.

It added that to curb these harmful tendencies, most countries have included legal provisions to limit government borrowing from the central bank. In most advanced countries, half of emerging markets, and around one-fifth of developing countries, central banks cannot finance the fiscal deficit.

“In light of Pakistan’s history, a similar restriction [on borrowing from the central bank] would be beneficial, by leading to lower inflation, greater fiscal discipline, increased efforts to raise the tax-to-GDP ratio, and less balance of payments crises in the future,” it said.

Addressing the concern that the bill will lead to policies that undermine those of the government, the ministry said “a new mechanism for coordination is being proposed between the Finance Minister and the Governor [State Bank], under which they would establish a close liaison through a mutual agreement and keep each other informed of matters that jointly concern the Ministry of Finance and the State Bank.”

Quashing the accusations that the bill is an international conspiracy, it clarified that this is not the first time the State Bank Act is being amended. Major revisions were previously made using a similar process in 1994, 1997, 2012, and 2015. The current proposed amendments are a continuation of that practice to modernize the central bank in light of domestic realities, best international practices, and international experience.

The finance ministry also rejected the impression that the priority of the central bank will be repayment of external debt, to the detriment of the domestic economy and resources for development.

Opposition lawmakers had likened the bill, coupled with the Finance (Supplementary) Bill 2021, akin to surrendering the economic sovereignty of the country. Approval of both the bills is necessary to ensure Pakistan’s sixth review of the $6 billion Extended Fund Facility (EFF) is cleared by the IMF’s Executive Board, scheduled to meet on January 12.

Source: Pro Pakistani

With a view to facilitating the public, the federal government upon recommendation of the State Bank of Pakistan (SBP) has extended the last date for exchanging old banknotes of Rs. 10, 50, 100, and 1000 by one year to December 31, 2022.

Previously, the last date for the exchange of old notes was December 31, 2021. As per the federal government’s Gazette Notification dated December 23, 2021, upon expiry of the period, the old design banknotes will stand canceled, and will not be exchangeable.

It is emphasized here that this is the final extension in the date of exchange of these banknotes granted by the federal government, and the public is advised to avail this opportunity and exchange their old design banknotes through the SBP Banking Services Corporation (BSC) Offices till December 31, 2022.

It is noteworthy to point out that having currency notes demonetized six years ago, the central bank has changed its mind about canceling them.

The vintage Rs. 500 banknotes were the last of the central bank’s historic series to have been dropped from circulation as the new currency notes were being pushed for immediate use. Historically, the country’s third-largest currency note was initially positioned for de-circulation on September 30, 2011, and this deadline was later extended to October 1, 2012.

Source: Pro Pakistani