SBP, ICAP agree for greater cooperation

KARACHI: The Governor State Bank of Pakistan Syed Salim Raza visited the Institute of Chartered Accountants of Pakistan (ICAP) here on Thursday and praised the institute for its work in assigned fields. The president of the institute, Asad Ali Shah briefed the governor about the overall progress of the profession and proactive contributions the Institute has made towards economic and fiscal policies of the country. He said that for this purpose, the Institute keeps close liaison with Security and Exchange Commission of Pakistan, State Bank of Pakistan and Federal Board of Revenue and frequent meetings are held with them. Both the institutes agreed for greater cooperation in future. —PR

STRIKES, HOLIDAYS, POWER BREAKDOWNS

Traders demand Karachi be declared as ‘calamity-hit’ city

KARACHI: All Pakistan Organization of Small Traders and Cottage Industries has demanded of government to give a tax exemption to the traders of Karachi for two years by declaring Karachi a disaster-hit area to compensate huge loss of traders owing frequent strikes, holidays and prolonged load-shedding.
APOSTCI Karachi chapter president Mehmood Hamid, Vice Presidents Ansar Baig Qadri, Abdul Majid and Usman Sharif said traders bear a loss of Rs140 million due to one-day strike in Karachi.
They said 12 to 14 hours of load-shedding have not allowed them to properly run their business even on normal days. Load-shedding is worsening with every passing day in Karachi and people have now become psycho patients, they said.
Traders are facing sever losses, business centers are closed and citizens cannot have a proper sleep in night due to frequent and prolong outages of electricity by the KESC.
They said all appeals for ending load shedding have fallen on deaf ear and in the current situation Karachi traders are not able to pay their taxes; therefore, a two-year tax holiday be given to them by declaring Karachi a calamity-hit area.

Karachi strike cripples trade activities

KARACHI: The continuous wave of terror and violence has badly affected economic activities in the city causing losses of billions of rupees to the traders, Daily Times found out on Saturday.

Violence in the city, which started from Friday night paralysed the whole city and even affected the interior province as well. Fears of further deterioration in the city halted business activities.

Chairman North Karachi Association of Trade and Industry (NKATI) Younus Khamisani while talking to Daily Times said that a city from where 80 percent of exports of various products are made and generate about 70 percent of the country’s total revenue should not be left at the mercy of political groups.

“It seems that the government has no interest in the city’s problems and has left its traders’ community helpless,” he complained and said that the Sindh government is doing nothing to ensure peaceful businesses environment for a better economy.

He said that NKATI has almost 2,000 industrial units that were badly affected by the strike, as less than 40 percent labour and workers could reach factories and the industrial zone had to suffer a loss of Rs 350 million to Rs 400 million on account of the strike.

“This was a total unexpected strike which not only hit the economic activities of the city, but largely affected that of interior Sindh as well,” member of managing committee of Korangi Association of Trade and Industry (KATI) Tariq Malik said. He said that KATI remained paralysed during the whole day, as 70 percent workers were not able to reach their industrial units and the industrial zone had to face substantial losses in terms of production.

President Karachi Chamber of Commerce and Industry Anjum Nisar said that this was the 10th day since July 1, 2008 that the economic activities in the city remained paralysed, and no production was observed during these days in the city.

He said that since July 2008 the country has faced a loss of about Rs 18 billion on account of taxes to the federal government, however almost Rs 25 billion to Rs 30 billion losses were reported in terms of production losses only from Karachi during these days.

Many traders face severe problems of supplying their consignments due to unavailability of transport and absence of peace in the city, besides rampant electricity load shedding has crippled the industrial production, he said.

A single day closure inflicts billions of rupees losses on the country’s exchequer, he said, adding that the country cannot afford such an unserious attitude towards trade and industry. He also criticised the government for not taking appropriate measures to ensure uninterrupted power supply to industries and residents of the city.

Chairman of Alliance of Markets Association (AMA), Muhammad Atiq Mir said that only stable political government could resolve the country’s problems, while the PPP-led government has proved a failure since forming the government.

About 25-30 percent of retrenchment has taken place in small markets in the wake of declining trade activities because of the government’s unfriendly business approach from the first day in the office, he said, adding that any rise in unemployment is likely to further collapse the existing peace in the country.

TDAP recommends PTA to boost exports

KARACHI: Trade Development Authority of Pakistan (TDAP) has recommended the government to enter into preferential trade agreements (PTAs) with other countries to get better access in their markets.
The recommendations approved by the Committee III of Federal Export Promotion Board (FEPB) will be sent to the government for inclusion in the next meeting of the FEPB headed by the Prime Minister of Pakistan.
The meeting was chaired by the Chief Executive, TDAP Syed Mohibullah Shah and attended by the representatives of various trade associations from parts of the country. They gave their suggestions for increasing market share of Pakistan exports in traditional and non-traditional markets.
The committee also suggested the government to continue to seek access to the major markets of the USA and European Union.
The committee recommended to sensitize Pakistani diplomats and commercial officers to the importance of export promotion and trade development issues.
It was also felt that commercial officers should spend two years at TDAP on completion of their foreign postings so that our business people and exporters can benefit from their experience of foreign markets.
The committee felt that some of the important sectors with great export potential like agro-food, minerals and human services should receive much larger credit allocation from banking sector as well as export finance so their potential could be developed and the country could benefit from their increased exports. —APP

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.