Day: November 13, 2021

The government has not implemented a majorly approved recommendation of Mobile Device Manufacturing Policy of removal of fixed Sales Tax on CKD/SKD manufacturing of mobile devices above USD 200 category.

This was revealed by the Ministry of Industries and Production in a written response to the National Assembly.

Replying to a question that whether the government has implemented all approved proposals mobile device manufacturing policy, the Ministry responded that all approved recommendations regarding Mobile Device Manufacturing Policy have been implemented except the removal of fixed Sales Tax on CKD/SKD manufacturing of mobile devices above the USD 200 category.

The Ministry further stated that this Division forwarded the above non-implementation at (a) vide summary on 4th December 2020 to ECC which in Case No. ECC-452/ 61/ 2020 dated 16-12-2020 approved, in principle, the said proposal at 2b of the summary i.e. removal of sales tax on locally manufactured phones of value more than “USD 200” with the direction that modalities shall be finalized by the Ministry of Industries and Production in consultation with Finance Division, Federal Board of Revenue (FBR) and relevant stakeholders.

However, due to the legal framework, instead of implementing above on CKD/SKD, FBR has maintained the gap between CBU and duty in flat rates for six different slabs according to the import value of the cellphones vide FBR SRO 840(I)/2021 dated June 30, 2021, thus encouraging local mobile phone manufacturing.

The National Assembly was further informed that so far Pakistan Telecommunication Authority (PTA) has issued manufacturing licenses to 26 companies.

Source: Pro Pakistani

The Ministry of Planning and Development has announced that issuing poverty figures and mapping poverty in the country has been suspended until 2023.

This was revealed by the ministry in a written reply presented in a session of the Senate today (Friday, 12 November).

It was revealed that no poverty index mapping has been conducted in the country after the year 2018-2019, and the ministry confirmed in its written reply that it does not have the latest figures.

It added that Pakistan’s poverty rate in 2018-2019 was 21.9 percent, and 24.3 percent in 2015. It decreased to 2.4 percent in 2017-2018 as compared to 2015-2016.

The survey was conducted in 2018-19, and the plan to conduct poverty mapping and indexing has been postponed to 2023-24, the Minister for Planning, Asad Umar, said in the written reply.

The survey of 2019-19 revealed that 21.9 percent of the population was living below the poverty line.

The ministry claims that it is expected that poverty will be reduced by two points in the annual plan for 2021-2022 because of the Ehsaas Kifalat program.

Source: Pro Pakistani

The State Bank of Pakistan (SBP) has decided to increase the average Cash Reserve Requirement (CRR), to be maintained during a period of two weeks by scheduled banks, from 5 percent to 6 percent.

The central bank has further notified that the minimum CRR is to be maintained each day from 3 percent to 4 percent.

CRR is the amount of money that banks are required to keep with the State Bank of Pakistan and is applicable on demand liabilities and time liabilities with a tenor of less than a year. Time liabilities with a tenor of more than one year shall continue to be exempted from maintenance of cash reserves.

With the economy recovering briskly from last year’s acute COVID-19 shock, there is a need to gradually normalize policy settings, including the growth of monetary aggregates. In recent months, real money supply growth has drifted above its trend. Today’s measure will moderate this growth as well as domestic demand, thereby helping to sustain the current economic recovery, achieve the government’s medium-term inflation target, and reduce pressures on the Rupee .

In addition, this measure is likely to have a positive impact on deposit mobilization as the banks would be encouraged to generate more deposits to cope with additional liquidity requirements for their operations. This would incentivize banks to offer better returns on deposits to attract these funds, thus serving the SBP’s objective of encouraging savings.

It may also be highlighted that a waiver of CRR on Time liabilities with a tenor of more than a year will encourage banks to raise more long-term deposits, which will facilitate asset-liability matching and enable banks to extend long-term loans for construction and housing financing.

Source: Pro Pakistani