Day: December 21, 2021

The government is considering raising the withholding tax (WHT) on cellular services from 10 percent to 15 percent in the forthcoming mini-budget.

The advance tax on telecom services was originally cut from 12.5 percent to 10 percent in the state budget for FY2021-22. The government also decided to reduce the advance tax on telecom consumers by another two percent to eight percent for the fiscal year 2023 — a decision that was welcomed by stakeholders and the general public.

However, it appears that the government is prepared to reverse its decision to raise revenue in the second half of this fiscal year, with a five-percentage-point hike in advance tax on the horizon. If the draft proposition is implemented, the cellular advance tax will be raised to a historic high of 15 percent.

Other reports suggest that the Federal Board of Revenue (FBR) has recommended a 50 percent increment in taxes on telecom customers in the mini-budget to end the various tax exemptions that were announced in the federal budget in June.

WHT is currently collected at a rate of 10 percent from all telecom users, regardless of their taxable obligations. Only about 2.9 million individuals from a population of 220 million (one percent of the total population) file income tax returns. Despite the fact that the majority of Pakistan’s population has non-taxable incomes, these individuals are required to pay WHT, which they will never be able to recover.

Experts have demanded that the government support the Prime Minister’s vision of Digital Pakistan by lowering taxes. They opined that high taxes may jeopardize the Digital Pakistan agenda as millions of Pakistanis are already unable to afford most mobile phone services.

Source: Pro Pakistani

As many as 250 containers, carrying Kinnow from Punjab to Karachi, have been stuck at the National Highway in Qazi Ahmed town of Shaheed Benazirabad district of Sindh due to a sit-in. The sit-in, if prolonged, will cause a huge loss to the national exchequer.

According to details, more containers are ready to leave for Karachi, which will worsen the situation.

In a tweet, Patron Chief All Pakistan Fruit & Vegetable Exporters Importers Association (PFVA), Waheed Ahmed, has mentioned that delivery of agricultural products from Punjab to Karachi had been badly affected due to the sit-in. He expressed a fear that if the containers did not reach the ship on time, it would cause a loss of $4 million. He said the ship was set to leave on Wednesday.

The Patron Chief also pointed out that the export of Kinnow has been facing problems throughout the year. He said the Kinnow exports would only add up to 300,000 tonnes due to high sea fares and shortage of containers.

Waheed Ahmed appealed to the Sindh government to resolve the issues of the protesters so the transportation could be made possible.

Source: Pro Pakistani

The Cabinet approved the Strategic Trade Policy Framework (STPF) 2020-25 on Tuesday. STPF aims to enhance the ability of Pakistani enterprises capacity to produce, distribute and sell products and services more efficiently than competitors.

Priority sectors have been identified under the STPF after studying the international demand trends along with the capacity and capabilities of various Traditional and Developmental export sectors of Pakistan.

The former includes textile and apparel, leather, surgical instruments, sports goods, carpets, rice, and cutlery. The developmental export sectors comprise engineering goods (incl. auto parts), pharmaceuticals, marble and minerals, processed food and beverages, footwear, gems and jewelry, meat and poultry, and chemicals.

The main focus of STPF will be on geographical and product diversification, manufacturing cost reduction through tariff rationalization, the pursuit of regional connectivity, including Look Africa and Silk Route Reconnect policies, and enhancement of market access through Free Trade Agreements and Preferential Trade Agreements. It also includes the facilitation of logistics and tracking under the International Road Transports (TIR) Convention and enhancement of regional connectivity for access to Central Asian Republics, Turkey, and Iran, through them to Europe and Russia.

The STPF is dynamic and will be subject to course correction based on constant monitoring and evaluation. There shall be an institutionalized mechanism for robust monitoring and implementation of the STPF to minimize policy implementation gaps, which have traditionally remained a weak link due to multi-organizational roles in the export ecosystem.

In order to oversee the implementation, a cross-functional National Export Development Board (NEDB) has already been constituted under the chairmanship of the Prime Minister, comprising of senior public sector officials of relevant organizations and private sector representatives. Regular meetings of the NEDB are being held in order to ensure the implementation of various policy measures.

Source: Pro Pakistani

Advisor to the Prime Minister on Commerce Abdul Razak Dawood has stated that regional connectivity is one of the most important pillars of the new and special Strategic Trade Policy Framework (STPF), compiled by the Ministry of Commerce.

He made these remarks while addressing a ceremony held on Tuesday in connection with the resumption of the Islamabad-Tehran-Istanbul freight train after nine years.

“It is heartening to witness the resumption of operations of the Istanbul-Tehran-Islamabad freight train after nine years,” the advisor said, adding that the train would complete the one-side trip in 12 days and would go a long way in facilitating the movement of goods between Pakistan, Iran and Turkey.

The advisor requested the exporters to take benefit of this alternative route and mode of transport and to stay in touch with the Ministry of Commerce for facilitation in this regard.

“Today is a day which will be long remembered in this region over the years as it has been. The Ministry of Commerce has been working continuously and asking efforts to increase trade. We have already initiated regional trade through trucks. Trucking is ongoing but the real potential is through railways which is more economical,” he concluded.

Source: Pro Pakistani

The PTI government will pay $55 billion in foreign debt payment during its five years tenure that ends in 2023, claimed the Minister for Information and Broadcasting Fawad Chaudhry.

In a tweet, the minister pointed out that the foreign debt payment was during PTI’s tenure is significantly higher compared to the debt payment of the PML-N government, which paid $27 billion in its tenure. He also revealed that Pakistan was going to pay $12.27 billion in the current fiscal year, whereas the payment for the next fiscal year would add up to $12.5 billion.

As per the data released by the State Bank of Pakistan, the external debt and liabilities reached $127 billion by the end of September 2021. The data shows an increase of $4.85 billion in the country’s external debt and liabilities during the first quarter of FY22. As a percentage of GDP, the amount adds up to 40.2 percent.

During the first quarter of the current fiscal year, foreign exchange reserves surged to $19.374 billion from $17.441 billion.

The cumulative debt and liabilities comprise Paris Club, the IMF loan, foreign exchange liabilities, Public Sector Enterprises (PSEs) guaranteed debt and non-guaranteed debt. It also includes banks borrowing, non-residential deposits, private sector guaranteed/non-guaranteed debt and foreign exchange and debt liabilities to direct investors.

Currently, the Pakistani economy is struggling to maintain growth as the current account deficit has grown significantly due to a growth in imports. The data from the State Bank of Pakistan shows that there has been a drastic increase in the deficit as it reached $1.91 billion in November 2021 compared to a surplus of $563 million in November 2020.

Source: Pro Pakistani