PFA, MAP sign MoU

Press Release

KARACHI: The Pakistan Food Association (PFA) and Marketing Association of Pakistan (MAP) have signed a Memorandum of Understanding at Karachi recently.
The direction and vision this MoU hopes to create a deep bond of relationship with the great traditions and professional values and standards which the two bodies have promoted and fostered over the years.
Mr. Rafiq Rangoonwala - President PFA and Mr. Farukh Mazhar - President MAP emphasized that both the Association will work together to strengthen professional expertise and values, enhance cooperation, exchange information and experience and provide assistance to each other in achieving their respective objectives.
This would help professional marketers to explore new learning and experience opportunities and would contribute immensely to their academic and professional development.

Hubco Narowal plant to be operational by March 2010

KARACHI: The Hubco Narowal Plant will start commercial operation by March 2010, company announced on Thursday.

Hubco, one of the largest independent power producer in Pakistan is setting up this combined cycle power plant based on reciprocating engines technology with an investment of about $300 million and having an ISO installed capacity of 225MW at District Narowal, Punjab. Tariff structure for the plant has recently been agreed with the National Electric Power Regulatory Authority and the letter of support has also been received from the Private Power Infrastructure Board, Government of Pakistan and all equipment supply and construction contracts have also been finalised. The plant will start supplying electricity to national grid from end of March 2010, thereby helping in reducing the acute power shortage in the country. staff report

Businessmen to file petition against NEPRA & KESC

KARACHI: The businessmen community will file a petition in Sindh High Court against National Electric Power Regulatory Authority (NEPRA) and Karachi Electric Supply Corporation (KESC) for their unjust tariff.

The petition will be moved by small traders, industrialist, SME’s and citizens of Karachi, this was decided in a meeting at Federation of Pakistan Chambers of Commerce and Industry (FPCCI), a statement said on Tuesday.

On this occasion, Helpline Trust, Karachi arranged a presentation at FPCCI on the traders anxiety regarding acute shortage of electricity and long hours load-shedding, which has not only left the small industry gasping for breath, but also created a sense of uncertainty in the job market and has badly hurt the businesses of small traders, industrialist, SME’s and citizens of Karachi.

Zakaria Usman, Vice President FPCCI chaired the meeting and has showed great agony over the severe shortage of electricity and withdrawal of subsidy on GST on electric charges, which have spiked the cost of production and resulted in widespread closures of small businesses and job losses.

He emphasised that lack of direction among policy makers is making things worse. He urged the government to reduce power tariffs to pass on the impact to consumers and to instruct KESC to cut down load shedding. He strongly drew the attention of the Government to this important area, which needs immediate review and urgent solution, before it is too late and the small traders loose their patience and come to street and create law and order problem.

He made it clear that the FPCCI cannot be a petitioner, but would provide all assistance if the above petition is filed, and we will continue dialogue with the government and KESC, for removing miseries of consumers of KESC.

Asghar Morawala gave details of steps taken by their committee members in regard to increase in KESC tariff, since October 2008. Zakaria Usman announced a committee who will take technicalities and then recommend with in week, and then Justice (R) Shaiq Usmani will prepare draft of petition, which will be again discussed in the FPCCI, and decision would be implemented.

FBR plans to stop tax evasion from wholesale, retail stores

By Muhammad Yasir

KARACHI: The Federal Board of Revenue (FBR) has planned to initiate measures to curb tax evasion from various wholesale and retail stores in major cities of the country, official sources said on Monday.

Sources said that the revenue department has intended to install its own electronic registration system at the counter machines of wholesale and retail outlets of different international and local stores aimed at creating direct taxes from the sector.

The revenue authority, in the beginning of this fiscal year, asked all such stores including groceries and departmental, medicine and healthcare, cosmetics and toiletries, shoes and clothing to set up electronic registration system to sum up their sales so that their income tax could be measured according to the record of digitals machines. However, a significant number of wholesale and retail outlets have not installed electronic price counters or information systems so far and continued to maintain their sales record manually.

Besides, tax official said, the federal revenue collection authority is not satisfied with the collection of income taxes from these wholesale and retail outlets made through existing electronic machines.

Taxmen added that the board would also plan to check sales records of their suspended machines on weekly and daily basis in order to monitor the records of the wholesale and retail shops.

Tax officials were of the view that the revenue collection authorities would take every possible measure to generate taxes from its potential taxpayers’ sectors, and the wholesalers and retailers’ sector is one of them where a handsome tax could be generated by minimising or stopping tax evasion.

The tax department has to achieve tax-to-GDP ratio at 10.2 percent as per International Monetary Fund (IMF) conditions by the end of fiscal year 2008-09, which were recorded at 9.5 percent in 2007-08.

FBR has met a shortfall of Rs 53.48 billion in federal tax collection during the first seven months of the current fiscal year 2008-09. In line with the upward revised tax collection target of Rs 1.360 trillion, FBR is chasing a target of Rs 681.7 billion, however, provisional collection has amounted to Rs 628.22 billion only.

IMF has expressed concern over the revenue collection growth of the country that was predicted to miss the annual financial year’s target, besides other macro-economic targets of the country including GDP growth rate, inflation, tax collection, foreign direct investment, privatisation proceeds and export and import targets. (DT)

RBS up for sale in Pakistan

By By Saad Hasan

KARACHI: As the Royal Bank of Scotland (RBS) on Thursday announced the worst financial loss in British history its office here disclosed the operations in Pakistan are being sold.

In a statement released to the Karachi Stock Exchange (KSE), the bank said there are potential buyers who have expressed interest in its business, which includes the retail and commercial banking segments.

“Current capital constraints on the RBS Group and the need for RBS to reduce the size of its balance sheet means it is unable to provide the investment the business in Pakistan requires to achieve its growth potential,” it said.

The bank neither divulged any details pertaining to potential buyers nor did it say anything about the fate of its employees here.

The RBS exit comes at a time when it was in the process of reorganising the business of ABN AMRO, which it bought at peak of the global financial crisis in 2007.

There were doubts when it started re-branding the 80 branches of ABN AMRO in Pakistan amid deteriorating economic and political situation, industry people say.

“It is only logical for RBS to give up operations in Pakistan,” said an official of another multinational bank. “They came because this country was part of the deal. RBS decision is caused by global reasons but the situation here will make head office of any multinational bank sceptical.”

Economic decline will further pull down profit growth of the banking industry this year and next, as people borrow and deposit less in banks, a banking analyst said.

“Banks are parking their funds in treasury bills as they fear rise in non-performing loans and cut back on lending,” said Farhan Rizvi, an analyst with JS Research. “Industry is in a consolidation phase and there will be mergers and takeovers this year.”

But, he said, it is unlikely that a new foreign bank will come forward to buy RBS in Pakistan at a time when there is financial turmoil in international markets.

And, he said any consortium formed locally to take over RBS would have to be very strong financially. “We are talking about 80-plus branches and over Rs112 billion in assets.”

The chances of RBS being purchased by any foreign bank, which is already operating in Pakistan, are also slim, said A B. Shahid, a banker and commentator.

“With the prevailing political instability and security concerns, it is very unlikely,” he said. “It is unfortunate the turmoil continues and our politicians aren’t able to see the severity of the situation.”

While their role as financial intermediaries is limited, industry people say, foreign banks have brought modern banking practices and products to Pakistan.

Pakistan Can Export Ample Milk To Malaysia

KUALA LUMPUR, Feb 25 (Bernama)-- Pakistan, one of the world's largest milk producers, will be able to meet Malaysia's need for milk as it produces more than 34 million tonnes annually, the Pakistan High Commission's commerce counsellor, Majid Qureshi, said today.

The imported milk could either be fresh or in powdered form, he told Bernama on the sidelines of the Business Leaders Meetings in conjunction with the D8 Ministers' Meeting on Food Security conference here today.

Currently, Malaysia imports about eight million tonnes of milk and milk powder annually from other countries, particularly New Zealand and Australia.

Qureshi said Malaysian companies with technical expertise and funds could invest in Pakistan to further develop the sector.

He also said that Pakistan would be able to provide ample Halal meat to Malaysia.

Pakistan, he said, had a huge land bank and cattle heads and manpower to meet the potential needs of Malaysian investors and entreprenuers.

As of last year, Pakistan had 144 million head of cattle, sheep, goats, baffaloes and camels.

He suggested that Malaysians interested in running animal husbandry farms so in Pakistan as the government was very supportive of such ventures.

It provided several incentives such as tax breaks, one-stop approval centre and fast approval and guaranteed protection of investment by an act of parliament, he said.

Business community of Great Britain urged to invest in Pakistan

The UK business community has been urged to invest in various promising projects in Pakistan offering high margin profitability and returns.

Speaking at a dinner hosted by UK-Pakistan Chamber of Commerce and Industry in Southall, west London, on Friday, Pakistan High Commissioner to Britain Wajid Shamsul Hasan said the south Asian country is ideally located for export-oriented industries and businesses.

Some of the projects he identified with potential growth and high returns include alternative energy, housing sector, roads building, surgical and sports goods, food processing, gems and jewellery.

The High Commissioner said Pakistan has in place well-established infrastructure and legal systems which are important to attract investment. This include rail and sea links, good quality telecommunications and IT services, modern company laws and long standing corporate culture.

Pointing out that Pakistan currently is an energy deficient country, he said the UK-based Pakistan business community has golden opportunity to either go for joint ventures with their Pakistan-based companies or can wholly establish projects in alternative energy sector such as wind farming, solar and hydro fields.

“You can also participate in housing industry as the Government is keen to provide the people with the low-cost houses whose construction also benefit related vending industry,” he said.

Hasan said poverty can be addressed by generating jobs opportunities through industrialisation and added that for the export-oriented industries and businesses, the Government has established a number of Export Processing Zones in the country with special incentives.

He praised officials of UKPCCI for taking keen interest in the progress and development of their motherland and in enhancing the trade ties between Pakistan and the UK.

The outgoing UKPCCI President Sami ullah spoke of his visit to Expo 2008 in Karachi and said the event provided good opportunity for the UK business delegation to explore business opportunities in Pakistan.

He said apart from potential opportunities in alternative energy sources, food is another area where business prospects are good in term of investing in new technology to boost wheat and other major crop production.

Sami ullah said Pakistan needs to re-group or re-organise to achieve the previous position when the country was exporting wheat but is now importing the commodity.

“Textile sector, food business, carpets, electronics, rice, surgical instruments and hospital supplies, herbal medicines, gems and stones are areas where I would urge all our members to take interest to find potential partners or invest on their own.”

He spoke of his meeting in Lahore with UK Trade and Development Office representative, running overseas market introduction service which undertake market analysis, feasibility reports on products and services and offer services related to market entry strategies.

Sami ullah praised the co-operation of Commercial Secretary Saira Najeeb and Commercial Counsel in Manchester Hamid Ali for their sound advice and building business links with the two countries.

In response to questions from the members of UKPCCI, the High Commissioner said the peace deal in Swat will lead to positive impact in the general situation in the country.

He said the spirit of consensus seen in the course of the Senate elections among the various parties is a good omen which will lead to further consolidation of democracy in the country.

Referring to the objections on high interest rate, the High Commissioner said their concerns will be passed on to the relevant authorities in Pakistan.

He further said the Government is seized of the matter regarding land mafia and has initiated steps to protect investments in property by the overseas Pakistanis.

UKPCCI Director and member, Punjab Assembly, Dr.Ashraf Chohan, informed the guests that he is introducing a private member bill for establishing special courts and a police force to deal with the curse of land mafia in the province.

Director Muzaffar Chaudhry and Secretary Naheed Randhawa spoke on the occasion.

Over 217 pc more sales tax recovered on petroleum products

KARACHI: Over 217 percent more sales taxes on petroleum products during the current fiscal year July-September were recovered as compared to the same period previous year.

Federal Board of Revenue (FBR) released first quarterly report said that over 203 percent more sales taxes were recovered in July 2008 as compared to July, 2007, while in August 199 percent and in September over 246 percent more sales taxes were recovered.

During the period under review, 167 percent more revenues were recovered on account of sales tax on the use of electricity as against 24 percent in sales tax recovery on gas.

According to the data available, sales recovery on cigarettes remained up by 31 percent, telecommunication by 4.5 percent, cement by 3.3 percent, tin canned items over 63 percent, while sales tax on steel products dropped by 64 percent.

PSO among the top 100 companies of the Muslim World for 2008

Pakistan State Oil (PSO) ranked 29th among the list of top 100 companies of the Muslim World released here.

US Consultancy, Dinar Standard in their 5th Annual Ranking released the list of 100 top companies of 57 member countries of the Organization of Islamic Conference (OIC), which depicted Turkey�s 23 companies among the list bagging most, while the largest oil company of the world Aramco topped the list.

PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent. Previous year PSO was ranked at 31st and Sui Northern Gas at 99th.

Housing loans witness visible reduction

KARACHI: The issuance of housing loans has witnessed a marked reduction due to high interest rates coupled with steep construction cost, a State Bank report said.

According to a State Bank’s report on Development Financing, the total volume of house financing registered a nominal rise of two percent to Rs73.60 billions till September 2008.

Interest rates soared due to tight monitory policy, leading to reduction in obtainment of housing loans by private sector.