18PC INCREASE IN GAS TARIFFS ACROSS-THE-BOARD IS A DEATHBLOW: KCCI

“18 per cent increase in Gas Tariffs by OGRA is one-sided decision and a deathblow to industrial, commercial and CNG Sector”, expressed by President, Karachi Chamber of Commerce & Industry, Abdul Majid Haji Muhammad, in a press statement, while expressing his deep concern against the decision of OGRA for allowing Gas Companies to increase gas tariffs across-the-board by 18 percent.

Abdul Majid strongly condemned and criticized the apathetic and slapdash attitude of the concerned quarters. He lamented that in the prevailing conditions, further increase in gas tariffs will worsen the situation, owing to further increase in CNG prices and ultimately commuters will be penalized and cost of transportation will high-rise.

Abdul Majid recalled that during the hearing of SSGC in OGRA, KCCI, raised high-voice against the unjustified increase of tariffs allowed by OGRA to gas companies from time to time, while considering the case one-sided and not bearing in mind the point of views of other parties viz. industrial, commercial and domestic consumers.

Abdul Majid lamented that such actions will protect the vested interests of gas companies and their revenue generation will yield whereas the industry and commercial concerns are fatally stabbed with another deathblow which will increase the cost of production and doing business and will further narrow down their profitability.

Abdul Majid was of the view that such harsh decision without consultation and consent of stakeholder may result in widespread discontentment in the business community. The closure of industry, due to detrimental affect of high cost of production due to higher utility tariffs will lead to flight of capital, massive unemployment and decline in the revenue of government, he focused.

Abdul Majid maintained that the said increase will pose a killing threat for the industry owing to highest-ever tariffs of utilities in the history of Pakistan. The cost of production/ manufacturing has gone exorbitantly higher absolutely due to unjustified policies of OGRA and NEPRA.

Abdul Majid stated that it is incomprehensible that on one pretext, government contemplates to achieve the targets for nominal growth of 2.5 percent and on the other pretext its inconsiderate and austere decisions to increase utility tariffs have already penalized the industry and posed as terrible threats for achieving the same.

At present, country is going through a worst economic crisis in terms of escalating cost of production/ manufacturing based on continuous rise on the utilities. The dollar has depreciated in the international market, oil prices have stabilized, interest rates and inflation started decreasing. In wake of such indicators, it is unjustified to enhance the tariffs, he maintained.

Abdul Majid demanded that Government must negotiate with foreign companies for favourable conditions; and interests of the business community should at the forefront of OGRA decisions rather than that of foreign companies earning huge profits from Pakistan and sending foreign exchange to their respective countries.

POWER TARIFF INCREASE CONDEMNABLE; WITHDRAWAL OF SUBSIDY WILL AGGRAVATE PROBLEMS: ABDUL MAJID

President, Karachi Chamber of Commerce & Industry, Abdul Majid Haji Muhammad, while expressing his concern on announced increase of Power Tariffs by 13.5pc effective from next month, stated that in the presence of worst power crisis of history and highest-ever tariffs, in such unpleasant circumstance, the abrupt withdrawal of subsidy for facilitating and meeting the demand, will further aggravate the problems.
Abdul Majid criticized the power increase decision by the concerned quarter of the Government and said that it is an irony that concerned quarters, despite of protest of masses, at several occasion, has previously increased the tariffs on the request of power generating/ distribution companies and now it has further penalized the consumers with its decision to raise power tariffs, as a gift on the dawn of 2010. He commented that no improvement will come in the energy sector if we keep our hands tightened and blame the previous government for the present serious gas and fuel shortages.
Abdul Majid stated that Business Community, especially the export-oriented industry and lifeline consumers will be penalized with the decision. Consumers using less than 100 units would be affected worse and this will prove a last nail in their coffins.
Abdul Majid lamented that no concrete measures have been witnessed regarding improvement in power/ electricity distribution/ transmission infrastructure nor the load-shedding has been controlled.
Abdul Majid commented on the efficiency of KESC and urged cut-down in prolonged unscheduled electricity outages. He said that the increased power tariffs and power outages have crippled the industry to perform at its par and increasing widespread discontentment in business circles.
Abdul Majid said that the Power Distribution Companies, particularly KESC, should take concrete measures to seriously curtail its transmission and distribution losses rather than adding-on different charges to control its financial losses.
The entire business community now demands the government to improve the efficiency of power distribution companies and do not increase the utility tariffs further for the larger interests of the economy and citizens of the country.

KCCI & KESC ARRANGED KHULI KACHEHRI AT KCCI ON 17TH DECEMBER 2009

Abdul Majid Haji Muhammad, President of Karachi Chamber of Commerce & Industry (KCCI) and Tabish Gauhar, CEO of Karachi Electric Supply Company (KESC) have arranged KHULI KACHEHRI (Open Hearing) on December 17, 2009 at 11:00AM at Majeed Bawany Auditorium-KCCI specifically for the members of KCCI for their pending issues pertaining to KESC.

Members, who are facing any problem from KESC, are requested to kindly forward complaints in writing alongwith supporting documents latest by December 15, 2009 and advised to participate in KHULI KACHEHRI on the above mentioned date and time.

FBR nets Rs 259 billion revenues in first quarter

Federal Board of Revenue (FBR) collected Rs 259.24 billion of revenues during the first quarter of the current fiscal year, according to provisional figures released by FBR on Monday.
According to the figures, the FBR has collected Rs 98.37 billion during the month of September 2009. Aggregate collection during the first quarter of the ongoing fiscal year thus works out to Rs 259.24 billion. The final revenue collection figures for the month of September 2009 are likely to increase further following the receipt of taxes, including taxes deducted at source, collected from different parts of the country.
The break-up of the tax collection figures for the month of September 2009 is attached for further details.

Tarin urges self-reliance to achieve economic stability

Finance Minister Shaukat Tarin Thursday said self-reliance was the only way forward for Pakistan to achieve economic stability and lessen dependence on revenue streams flowing in from donor agencies.

“As long as these revenue streams flow, things work well but once these streams go away, problems re-surface and economic independence becomes a distant dream,” he said in a keynote address to a two-day ‘Conference on Value Added Tax (VAT)’ that started in the capital here under the auspices of Federal Board of Revenue (FBR).

The minister said Pakistan heavily relied on taxes as a major source for government revenues required for socio-economic uplift of the people. Optimum revenues are achieved when an efficient taxation system is in place. Our Government’s vision and strategy of a better Pakistan also rests on a taxation régime which is based on equity and fairness, convenience of payment, economy in collection, and simplicity of procedures, he added.

He said reducing poverty through generating additional revenues is an important step towards achieving our government’s vision and that can only be achieved through an efficient taxation system which conforms to the best international practices in revenue collection.

Shaukat Tarin said these best practices were being adopted by countries all over the world and like others Pakistan had also set about modernising its taxation structure through the Tax Administrative Reforms Program (TARP) aimed at achieving greater efficiency and productivity in the tax collecting business processes and tapping new tax resources.

He admitted there were challenges in the way of generating additional indigenous revenues and exercise of discretionary powers by the government, lack of professionalism due to an inadequate capacity building and existence of certain exemptions in our tax regime were issues which needed to be addressed before the introduction of Value Added Tax.

Tarin said the tax managers alone could not do all this and “a lot depends on the policy, planning, vision and commitment of the political and economic managers”. “It is therefore a common responsibility of all the stakeholders to contribute towards achieving an efficient taxation system which can generate additional revenues for the country,” he added.

He also called for collective efforts to achieve a broader and larger goal of better standards of living for the people through better tax collection. This in turn requires increase in tax base by incorporating maximum categories of services into the tax net. While our tax base includes a wide range of goods, services sector, which is a major source of revenue around the world, is largely out of the tax net and it is time we revisited our exemptions, zero-rated items, rate variations and major sources of irritants to business, he added.

The finance minister said Pakistan could also draw on the experiences of other countries for developing a viable model best suited to our economy. He said the Value Added Tax could be considered as an effective tool for proper documentation of economy, widening of tax base and equitable taxation mechanism.

Later talking to media men, Shaukat Tarin highlighted the importance of value addition for taxation purposes on the retail stage as widening of taxation base. At the retail stage it is basically the issue of understanding and tapping the whole supply chain of goods and services. However, enforcement of any such tax on such a stage cannot be adequately done if the tax collecting machinery is not properly aware of the facts and figures regarding the different social segments, documentation of small to medium businesses, their supply chains and financial capacity of the retailers themselves. All this needs to be thoroughly researched, properly documented and comprehensively digitized by the tax machinery.

To another question, he underscored the VAT service delivery and its impact on the lives of our taxpaying community which is the backbone of our economy. FBR should keep in mind that VAT in today’s world is considered as a powerful tool in harnessing funds in domestic markets. These funds can then be used by the developing countries like Pakistan to meet the challenges like increasing mass education, poverty eradication and provision of socio-physical infrastructure.

The minister cited the example of Sri Lanka which at a 15 per cent VAT had been able to increase its tax-to-GDP ratio by seven per cent and if Pakistan could increase its tax-to-GDP ratio by four per cent through the implementation of VAT, it would be able to raise an additional Rs 600 billion, taking us close to bridging the Rs 722 billion fiscal deficit.

Earlier FBR Chairman Mr Sohail Ahmad in his address to the inaugural technical session of the conference highlighted the steps taken by FBR for generating more revenue through massive reforms, re-structuring and business process re-engineering which he said could also serve in the implementation of VAT from July 2010.

He said the government believed the impact of taxes generated through VAT would be significant in covering all those sectors which earlier enjoyed exemptions in one way or the other. He welcomed the participants of the conference which he hoped would be able to come up with a way forward for the implementation of value added tax in an incentive-based, transparent and harassment-free environment.

Public Warning By State Bank of Pakistan and SECP

SBP cuts interest rate by 100 points

State Bank of Pakistan has slashed the discount rate by 100 basis points, report said on Saturday. At a press conference here Saturday, Governor SBP Syed Saleem Raza announced the monetary policy.

He announced that the SBP has decided to slash the discount rate by 100 basis points. “The SBP has cut the discount rate by one percentage points from the current 14 per cent,” Raza said. The governor said GDP ratio reaches 2.1 pc. He said foreign exchange reserves improved sharply and stood at $9.1 billion. The SBP has cut the discount rate by one percentage points from the current 14 per cent. It had cut the rate by one percentage point in April this year from 15 to 14 per cent.

The central bank also changed the interest rate mechanism to bring transparency in Repurchase Offered (repo) rate as well as reverse repo rate as recommended by the International Monetary Fund (IMF).

Central Bank wants reforms for entrepreneurial culture

State Bank of Pakistan, Syed Salim Raza Wednesday stressed need for reforms to foster an entrepreneurial culture.
Addressing conference on Entrepreneurship 2009, organized by Memon Professional Forum at local hotel, he said there is ample research available globally, which links entrepreneurship, innovation, growth to encourage policy makers to favour policies fostering reforms.
“In environment of innovative entrepreneurship, dynamic markets, businesses can grow rapidly, ensuring that employment grows and opportunity expands.”
In under-developed states like Pakistan, there is added bonus that such environment is also most poor-friendly and conducive to social mobility, he added.
He said that World Bank 2009 survey of cost-of-doing-business in 181 countries clearly stresses need for continued reforms in critical areas in Pakistan.
He said entrepreneurship encompasses innovative ideas, implementations that change way business is conducted in market. On other extreme, term applies equally well to lowly street vendor, who seeks to set up small stall of his own to provide living to his family, funded perhaps by micro-savings or micro credit, hoping to succeed by dint of sheer hard work and ability to satisfy a small market niche.
He said both definitions of entrepreneurship encompass some common elements: ability to envision an unmet market niche or innovation that can change market; willingness to invest their time, money, effort seeking to bring that vision to life and willingness to assume all resulting risks and rewards.
“It is thus probably no coincidence that most innovation occurs in countries that encourage entrepreneurs the most.”

Govt to improve law, order, power situation to achieve trade targets-Amin Fahim

Federal Minister for Trade Makhdoom Amin Fahim Monday said the law and order situation and power crisis across the country has had a negative impact on the overall trade.

Announcing the new trade policy 2009-12 here, Makhdoom Amin Fahim said the law and order situation will be improved and electricity crisis overcome in order to achieve the set targets.

Earlier today, the Federal Cabinet gave approval to the Trade Policy 2009-12.The Cabinet meeting was presided over by Prime Minister Syed Yusuf Raza Gilani.

The total imports of the country stood at 34.9 billion dollars in the last fiscal. The imports slashed by 13 percent and exports by 7 percent in the previous year.

The global economic growth shrunk by 9 percent as a result of world recession which also had its negative impact on Pakistan’s trade.

Textile exports decreased from 10.1 billion dollars to 9.6 billion while garments exports reduced by 21 percent.

Makhdoom Amin Fahim said exports of engineering goods recorded a 26 percent rise. Exports of gems and jewelry increased from 213 million dollars to 280 million.

He said the government has held consultations with all the stakeholders at a difficult time.

Steps will be taken for the capacity of building of local industries under the new trade policy, he said, adding “technological development be undertaken for enhancement of exports of unconventional goods.”

He announced that investment will be made in 10 sectors under Entrepreneur Fund.

Trade diplomacy will be enhanced through Doha development agenda for gaining better access to international markets including those of the US and Europe.

OGDCL wins 6th Annual Environment Excellent Award

Oil and Gas Development Company Limited (OGDCL) has won 6th Annual Environment Excellent Award 2009 on the basis of best environmental track record, services and performance.
Federal Minister for Environment Hameedullah Jan Afridi gave away the award to Managing Director, OGDCL at a function held at Karachi.
This is second time that the state-run Company has bagged this award, the first being in 2007.
This award instituted by NEFEH with support of United Nations Environment Program and Federation of Pakistan Chambers of Commerce and Industry.
The ceremony was attended by government officials, corporate, environmentalists, experts, civil society and media. The Minister said the OGDCL has maintained its position as a key provider of safe energy through indigenous sources by observing highest standards of Health, Safety and Environment in compliance with statutory regulations. Affirming its stand as an environmentally responsible Exploration and Production (E&P) organization, the OGDCL won the Annual Environment