Pakistan Economy - News & Updates - Archive

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Stock market fall​

THE Karachi Stock Exchange index of 100 shares (KSE-100) plummeted by 635 points or five per cent — the biggest ever one-day fall — on what will now be remembered as ‘black Monday’ in the history of the country’s capital markets. No one expected the KSE to react so violently to the proclamation of emergency and the issuance of the Provisional Constitution Order by the chief of the army staff last weekend. The reason for this optimism was simple: the market had been discounting the emergency for the last fortnight and already adjusted itself by shedding 800 points in that period. The bullish sentiment that had propelled the KSE-100 index to the all-time highest level of 14,903 points on October 22 was already on the wane on speculation of the impending imposition of emergency. The market braced itself for some further erosion in the value of the stocks at the beginning of the week because along with the proclamation of emergency on Saturday came the PCO. For the market players, it was ‘emergency plus’. Therefore, a little bit of further adjustment to the new reality was inevitable. But nobody was prepared for such a massive fall on a single day, which eroded market capitalisation by Rs186bn.

What happened on black Monday did not result from the manipulation of the big stock brokers or any inadequacy of regulations. It was a consequence of the government’s own doing. With the shutdown of the television news channels investors had no means to verify or refute the fast travelling rumours of a ‘counter’ coup. That led to panic selling by big and small investors. Along with local jobbers and speculators, foreign portfolio funds are also believed to have taken out $25m from the market during the day. The trend is expected to persist over the next few days, if not weeks, unless state-owned and private institutional investors are forced by the government to intervene. The punters link the forward thrust of the capital markets in the near future closely to two factors on which hinge the fate of Gen Musharraf. One is the intensity of Washington’s reaction to the emergency; the other is the PPP’s decision on supporting the pro-democracy movement of the lawyers. Both have been vague in their denunciation of the army chief’s act so far. And the market too has fluctuated accordingly, at one point going up and at another plummeting.

DAWN - Editorial; November 07, 2007

 

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New Petroleum Policy 2007: Foreign E&P cos allowed to sell gas to third parties​

* Royalty rate set at 12.5% of value of petroleum at field gate n Income Tax at 40% of profit

ISLAMABAD: The government has determined the royalty payable at the rate of 12.5 percent of the value of petroleum at the field gate and tax on income will be payable at the rate of 40 percent of the profit or gains in the new Petroleum Policy- 2007.

According to the Policy, that was approved on Monday total term of an onshore development and production lease will be up to 25 years plus five years. The Policy reveals that royalty would be paid in cash or kind at the option of government of Pakistan on liquid and gaseous hydrocarbons including LPG, NGL, Solvent oil, gasoline and others, as well as all substances including sulphur, produced in association with such hydrocarbon.

As per policy, tax on income will be payable at the rate of 40 percent of profit or gains in accordance with the Fifth Schedule of the Income Tax Ordinance, 2001 and royalties will be treated as an expense for the purpose of determination of income tax liability.

A committee shall be constituted to address the issues of the implementation of this policy comprising of Minister for Petroleum and Natural Resources Chairman Deputy Chairman Planning Commission Member Secretary, Finance Division Member Secretary, Petroleum and Natural Resources Member Director General Petroleum Concessions Member/Secretary. In order to meet the deadlines, a separate cell headed by Director General Petroleum Concessions (DGPC), as already provided in Petroleum (Exploration & Production) Policy 2001, shall be maintained comprising, Legal Advisor, Financial Consultant, Petroleum Economist, (d) Petroleum Explorationist and other professionals on need basis.

Total term of an onshore development and production lease will be up to 25 years plus five years renewal and for grant of petroleum rights after the expiry of lease period, DGPC will invite bids using the call for bids one year before the end of the lease period from pre-qualified companies seeking to have a petroleum right over the lease area, in relation to any producing field for an additional ten years.

If the foreign E&P companies sell gas to third parties in Pakistan and want to remit sale proceeds in foreign currency abroad, the government will also allow these companies to freely remit a “guaranteed percentage” of their sale proceeds. The “guaranteed percentage” shall be 75% of the total gross revenues from any Lease in Zone O and I, 70% of the total gross revenues from any Lease in Zone II and 65% of the total gross revenues from any Lease in Zone III.

The remaining gross income in rupees could be used to pay royalties, taxes, windfall levy and any other payments to the government as well as to meet local operating costs.

Exploration and Production (E&P) companies operating in Pakistan will be allowed to contract with gas transmission and distribution companies and third parties, other than residential and commercial consumers, for the sale of their share of gas in Pakistan at negotiated prices in accordance with the applicable laws, rules, and regulations.

The gas producer shall construct and operate and maintain the gas pipeline connecting the field to the field gate in accordance with the Policy, applicable law, rules and regulations. All costs associated with such pipeline will be borne by the gas producer and no transportation tariff will be paid by the government/gas buyer nominated by the Government for this purpose.

E&P companies operating in Pakistan will be allowed to construct and operate pipelines for local requirements and for exports of their share of petroleum, which shall be regulated by the regulator concerned in accordance with applicable laws, rules, regulations and the Policy based on an open-access (third party) regime. The E&P companies constructing such pipelines would be allowed priority access based on a firm utilization plan.

The basis of the tariff allowed and paid monthly for delivery from field gate into the transmission system will be determined by the regulator based upon a ‘rate of return on equity’ basis at the rate of 12 percent with the capita cost being amortized over a minimum of 15 years. Allowable costs will include operating cost and interest payable on the initial capital over the minimum 15-year amortization period. In the post repayment period the operator will be able to make a 12 percent margin over operating costs.

Daily Times - Leading News Resource of Pakistan

 

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Trade and current account deficits may taper in 2007-08​

* During Q1 2008 exports grew at an average rate of 5.8% to $4.355bn, imports declined by 1% to $6.755m

ISLAMABAD: Ministry of Finance on Tuesday projected that both trade and current account deficits would narrow down during the current fiscal year with growth in exports.

Import growth appears to be on the path of moderation and is expected to grow in the range of 6.5 percent to 7.0 percent in the current fiscal year, states a report prepared by the Investors Relations Desk of the ministry.

The narrowing of trade deficit is the direct result of improvement in exports on the one hand and a marginal decline in imports on the other. The trade balance of Pakistan has widened in recent years on the back of strong economic growth sustained by domestic demand. Improvement in the trade balance during the period under consideration is an encouraging development and will have salutary impact on the country’s overall balance of payment.

This projection is based on the trade performance during the first quarter of the current fiscal year, which highlights that exports on f.o.b basis have grown at an average rate of 5.8 percent during the first three months of the current fiscal year, amounting to $4355 million. It may be noted that exports grew by 3.3 percent in 2006-07. Exports growth of 5.8 percent in the first quarter (July-September) of the current fiscal year is certainly an improvement over last year.

Exports are targeted to grow by 8-10 percent in the current fiscal year. Imports, on the other hand, declined by 1 percent during the same period, amounting to $6755 million. Imports were up 8.2 percent last year and grew at an average rate of 35 percent during the previous two years (2004-05 and 2005-06). Import growth appears to be on the path of moderation and is expected to grow in the range of 6.5 percent to 7 percent in the current fiscal year. As a result of the developments on exports and imports the trade deficit improved by $304 million from $2704 million to $2400 million.

Invisible balance maintained a surplus of $141 million as opposed to a deficit of $101 million in the same period last year. Private transfers also registered an improvement of 19.3 percent, that is, rising from $2199 million to $2624 million during the period under consideration.

Workers’ remittances – a major component of private transfers also grew by over 21.6 percent to $1500 million in the first three months of the current fiscal year. As a result of these developments the current account deficit in the first quarter of the current fiscal year improved by $607 million and stood at $2145 million. As percentage of GDP the current account deficit in the first three months of the current fiscal year stood at 1.3 percent of the projected GDP for the year as against 1.9 percent in the corresponding period of last year.

Official foreign exchange reserves continue to rise from $15.14 billion in end June, 2007 to $16.14 billion in end September, 2007.

Daily Times - Leading News Resource of Pakistan

 

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New industrial estate in Islamabad soon​

ISLAMABAD: A new industrial estate would be established in I-17 sector of Islamabad, said Chairman Capital Development Authority (CDA) Kamran Lashari here Tuesday.

Taking to a delegation of Islamabad Chamber of Commerce & Industry (ICCI), led by its President Nasir Khan, the CDA chief said that the Authority will acquire the land for the new industrial estate by the the end of this fiscal year.

The ICCI delegation met Chairman CDA Kamran Lashari to discuss the problems of business community. During the meeting the CDA extended lease agreements of all commercial centers of Islamabad and appreciated the role of business community in the expansion of Capital.

It was also decided that plots for business community centers and dispensary would be provided in I-10 Sector soon. The ICCI chief also demanded provision of plots for establishment of separate schools for business community’s children. Member (Estate) Brig. Asad Muneer said that a proposal would be considered positively in the upcoming board meeting. The delegation also demanded upgradation of roads of industrial estate. The CDA also assured that construction and repairing of roads would be started soon.

Daily Times - Leading News Resource of Pakistan

 

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Complex regulatory structure mars Pakistan’s energy sector: ADB​

* ADB will provide $2 million in technical assistance

ISLAMABAD: The Asian Development Bank (ADB) has analysed that Pakistan’s energy planning is unlikely to be optimal because of the fact that no single ministry or regulatory authority is assigned with the responsibility of this most important sector.

In its technical assistance report for Pakistan Integrated Energy Model, the ADB has said that it would help identify and develop least-cost energy systems. It will also analyse the effects of regulation, taxes and subsidies, benefits of regional cooperation, cost-effective responses to restrictions on emissions, long-term energy balances under different scenarios and impact of new technologies.

Discussing the issues pertaining to Pakistan’s energy sector, the ADB report finds that Pakistan’s energy sector includes separate ministries of Petroleum and Natural Resources; Water and Power; Planning and Development; and Environment, Transport and Communications. It also includes the Pakistan Atomic Energy Commission. There are separate regulatory bodies for oil and gas, and electric power. No single ministry or regulatory body has overarching responsibility for energy.

The ADB has announced provision of two million dollars in technical assistance that would support optimal energy sector development in Pakistan that would facilitate economic growth. The outcome of the technical assistance would be a functioning energy-planning unit, producing regular integrated analysis of strategic energy options. A trained energy planning team would be established. It will operate and maintain the model and propose strategies for meeting energy requirements at the least cost and in a manner that is technically and financially sustainable and environmentally acceptable, for consideration by national policy makers.

Pakistan’s energy planning is unlikely to be optimal, or at least it is not demonstrated to be so. Pakistan is a net energy importer, with energy needs supplied from multiple sources. As such, country energy analysts believe there is scope for optimisation through integrated planning. This view is consistent with the approach of other developing and developed countries where least-cost energy plans are developed through a rigorous integrated process.

Sophisticated computer software applications currently available in the international marketplace can model a country’s overall energy demand and supply situation. These integrated energy models can help planners to assess the impact of various policy scenarios and support good decision-making within defined constraints. Pakistan currently does not use such an integrated energy-modeling tool.

Pakistan’s Medium-Term Development Framework (MTDF) 2005–2010 sets out a challenging programme to achieve eight percent annual growth in GDP. Associated growth in energy consumption is forecast at 12 percent a year, which can be compared with an ACGR of 6.1 percent from 2000 to 2006. This expected growth will put pressure on all sectors of Pakistan’s primary energy supplies.

Pakistan’s primary energy supplies totaled 58 million tonnes of oil equivalent (toe) in 2005–2006. The supplies comprise natural gas (50 percent), oil (28 percent), hydro-electricity (13 percent), coal (7 percent), nuclear energy (1 percent) and liquefied petroleum gas (less than 1 percent). All domestic natural gas production is consumed and, without higher production, growth will need to be met through imports. The combination of rising oil consumption and flat oil production has led to rising oil imports. In addition, a lack of refining capacity leaves Pakistan heavily dependent on petroleum product imports. Electricity supply is limited due to insufficient generation availability, with an estimated 1,500 megawatts (MW) of demand unmet. Meanwhile, electricity demand is forecast to grow by 8 percent a year during 2005–2015.

Pakistan is responding to this energy development challenge by pursuing a wide range of domestic and imported energy projects. Growth in domestic gas production is not forecast to meet demand. Several international gas pipeline projects are under development while liquid natural gas import options are being investigated. Development of the significant but challenging coal reserves in Tharparkar desert is being studied by the government. Consideration is also being given to 2,000 MW of power-generation projects in the private sector, using imported coal.

Further, the government intends to proceed with a large multipurpose dam project on the Indus River to cater for irrigation needs and to supply about 8,000 MW of electric generating capacity, and investigations are being conducted currently into the Central Asia South Asia Regional Electricity Market (CASAREM) project to import more than 2,000 MW of electricity from Tajikistan and Kyrgyz Republic via Afghanistan. Renewable energy projects are being promoted, with a target of 10 percent of energy mix to be met from such sources by 2015. Several energy efficiency projects are at an early stage of development. Meanwhile, a lack of energy efficiency standards has contributed to high carbon dioxide intensity.

Daily Times - Leading News Resource of Pakistan

 

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S&P revises outlook on Pakistan to negative ​

NEW YORK (November 07 2007): Standard & Poor's Ratings Services on Tuesday revised its outlook on the long-term foreign and local currency sovereign credit ratings of Pakistan to negative from stable. At the same time, S&P's has affirmed its 'B+/B' foreign currency and 'BB/B' local currency sovereign credit ratings on the country.

-- Says fiscal position remains vulnerable given the government's high debt and debt-service burdens.

-- Believes recent events increasing the risk of exceeding the 4 percent deficit target. "The outlook revision reflects heightened and prolonged political uncertainty after President Pervez Musharraf's declaration on the state of emergency on November 3, and its potential impact on economic growth, fiscal performance, and external vulnerability," said Standard & Poor's credit analyst Agost Benard. The sovereign's political and security situation has deteriorated markedly in recent months.

"With the declaration of the state of emergency, the political turmoil and security concerns reached new highs, and prospect of swift political resolution became more distant," Benard said.

"The negative outlook reflects the likelihood of a downgrade if the current political turmoil results in economic policy setbacks, in weaker economic and fiscal performance, or in higher external debt and debt service burdens.

The outlook could be revised to stable if political pressures ease and the government is able to focus effectively its efforts on fiscal consolidation and further economic reform."

The expansionary stance of the 2007-2008 budget has led to heightened concerns over the country's fiscal position, which remains vulnerable given the government's high debt and debt-service burdens. Recent events exacerbate the risk of expenditure overruns and revenue shortfalls, thereby increasing the risk of exceeding the 4 percent deficit target.

In addition to potential fiscal impact, the political turmoil exposes the sovereign to external pressures if foreign direct investments and other equity inflows, which have funded about two-thirds of the country's large current account deficit (estimated at just under 20 percent of current account receipts in fiscal 2006-2007), diminish significantly.

Business Recorder [Pakistan's First Financial Daily]

 

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US starts reviewing aid to Pakistan ​

WASHINGTON (November 07 2007): The United States said Tuesday it has begun studying whether to suspend any of its multi-billion-dollar aid program to Pakistan as it again pressed President Pervez Musharraf to lift emergency rule. "People started work on it," State Department spokesman Sean McCormack told reporters, referring to the review that had been promised since Musharraf imposed emergency rule on his country on Saturday.

The review involving the State Department and other government agencies as well as the White House would look at whether Pakistan had violated any US laws or rules that would require Washington to suspend aid.

"Everybody is going to do an inventory of the programs that we have and look at those specifically with respect to the law and our rules and regulations," McCormack said. US officials said Washington has contributed 9.6 billion dollars in military and economic development aid to Pakistan since it became a key US ally in the US war against terrorism following the attacks on September 11, 2001. Another 780 million dollars is due this year.

McCormack said the US government had to weigh its legal obligations against ensuring that it continued to bolster Pakistan in its battles against militants hiding along its border with Afghanistan.

"I don't think anybody expects that the president or the government is going to take a step that might make the United States less safe or might diminish our capabilities to fight terror," McCormack said. "That said, there are potentially certain requirements under the law. We're going to look at what is required and what is triggered by the law," he said.

When asked whether the US government might contemplate suspending academic links with Pakistan such as fellowships and scholarships, McCormack replied he was not aware of such a plan.

"The (exchanges) are very effective means by which two very different societies can better understand one another and really build up those kinds of bonds and links that are important in international relations," he said. McCormack said the US aim was to press Pakistan to resume its path toward democracy in the interest of Pakistanis, their neighbours and the world at large.

Building "robust democratic institutions that serve all of the Pakistani people," he said, will in the long term "be Pakistan's best defence against the violent extremists who seek to take Pakistan in another direction."

The White House meanwhile expressed broad support for "freedom of expression" and assembly in Pakistan but stopped well short of encouraging demonstrations against Musharraf.

Business Recorder [Pakistan's First Financial Daily]

 

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UAE keen to boost trade ties with Pakistan ​

ISLAMABAD (November 07 2007): The United Arab Emirates (UAE) will enhance investment and trade partnership with Pakistan through its public and private companies, Ambassador Ali Mohammed Al Shamsi said on Tuesday. Two more mega projects in Lahore and in Balochistan will be executed shortly, the ambassador said according to an embassy press release issued here.

The ambassador said UAE initiative was cruising in the same streamline of the government's development programmes. He said UAE will double its volume of investments in various available sectors as UAE companies have already invested $13 billion last year.

Al Shamsi stressed the importance of setting up Khalifa Coastal Refinery at Khalifa Point in Balochistan at a cost of five billion dollars. He said UAE would continue to invest in the real estate sector with a mega project planned to be set up in Lahore. Ambassador Al Shamsi expressed appreciation for the economic policies of Pakistan.

Business Recorder [Pakistan's First Financial Daily]

 

[Flintlock]

Sorry...wrong thread...

 

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Deep water port accord to be inked today ​

Thursday, November 08, 2007

KARACHI: The Karachi Port Trust (KPT) and Hutchison Port Holdings (HPH), Hong Kong are expected to sign a high-profile concession agreement on Pakistan Deep Water Container Port on Thursday (today) in Islamabad.

The meeting is expected to be attended by President General Pervez Musharraf, Federal Minister for Ports and Shipping Babar Khan Ghauri, senior officials of the KPT and Hutchison Port Holdings (HPH). A KPT press release said that the KPT is setting up a new harbour enclave called “Pakistan Deep Water Container Port” (PDWCP) at the mouth of the present harbour, east of Keamari Groyne.

In the first phase, a 1,500 meter quay wall is being built to establish the first deep water container terminal in the country and the region with a designed depth of 18 metres. The concession has been awarded to Hutchison Port Holdings (HPH) of Hong Kong, which has 35 years of experience and has 257 berths in 45 ports of 23 countries. The concession is being awarded on Built Operate and Transfer (BOT) basis for the initial lease of 25 years. The total cost of the Phase-I of the project is estimated at US$1 billion.

The project is a public-private partnership venture with KPT to invest $450 million for infrastructure development and the HPH will invest $557 million. The contract guarantees an income of $1.14 billion to the KPT over the 25 years lease period irrespective of the quantum of through put container traffic.

The KPT’s investment would, therefore be paid back in six years. Based on the projected business plan, the KPT should receive $3.5 billion during the tenure of the entire concession period and it has planned to hand over the first berth to HPH by 2009 and the subsequent berths at fixed intervals. The first ship is planned to arrive at the new terminal by 2010.

Deep water port accord to be inked today

 

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Analysts see drop in Pakistan, China cotton output ​

Thursday, November 08, 2007

NEW YORK: Rising yields should give another boost to the US cotton crop, but analysts said on Wednesday that crops in China and Pakistan should see some cuts in this week’s government crop report.

The US Agriculture Department’s monthly supply/demand report is due out on Friday at 8:30 am EST (1330 GMT). Plentiful rains in states like Texas, the top cotton producing area in the country, have prompted many in the market to forecast that USDA will raise its estimate of the US cotton crop up from last month’s projection of 18.15 million (480-lb) bales.

“From all indications, both the high plains and rolling plains (of Texas) are turning out more than expected,” said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

He and John Flanagan of brokers Flanagan Trading Corp in Fuquay-Varina, North Carolina, forecast the US cotton harvest will rise to 18.25 million (480-lb) bales from USDA’s estimate last month of 18.15 million bales.

Sharon Johnson, cotton expert for First Capitol Group in Atlanta, pegged the US crop at 18.2 million bales. She said in a report that US cotton yields will probably reach around 829 lbs per acre, which “will rank at the third highest despite early planting problems in the US Southwest and late growing issues in the Southeast and Delta.”

Analysts said the estimates for the crop in China, the world’s top consumer of the fiber, and Pakistan, which has been rocked by political turmoil, would most likely be cut.

Johnson forecast the crop in China would be down at 35 million bales from last month’s projection of 35.5 million due to rainy and cool weather during the first half of its harvesting season.

“Greater losses could occur as more individual province data become available, but quality may be more of an issue than quantity at this time,” she said.

Flanagan predicted Chinese cotton production may fall as low as 34 million bales. Stevens said a reduction in the Chinese estimate “is probably coming down the line,” but the USDA may hold back until the Chinese government adjusts its own numbers and “there is more concrete evidence of losses in crop size.”

All the analysts agreed that Pakistan’s cotton harvest was “almost a sure bet to be reduced” as Stevens put it. Johnson said it could go down to 10.3 million bales from the USDA forecast of 11 million bales. Flanagan said the crop could fall by 2.0 million to 9.0 million bales.

The impact of the report, barring any major surprise, could be muted given all that is happening in global economies. Johnson said the fall of the “US dollar to new all-time lows, new all-time highs in crude oil, and new multiple-year highs by soybeans, gold and silver are driving other commodities, including cotton.”

Analysts see drop in Pakistan, China cotton output

 

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Forex reserves up by $18m to record $16.372 bln ​

KARACHI (updated on: November 08, 2007, 17:27 PST): Pakistan's total liquid foreign exchange reserves went up by $ 18 million to more than $ 16.372 billion this week.

According to weekly report of State Bank of Pakistan (SBP) here on Friday, the foreign exchange reserves held by the Central Bank were estimated at $ 14.166 billion on November 3, 2007, while reserves held by the banks stood at about $ 2.206 billion.

Forex reserves up by $18m to record $16.372 bln : Business Recorder | LATEST NEWS

 

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Gulf firm to set up $225 million cement plant near Dhabeji ​

KARACHI (November 08 2007): The Sindh government will provide 400 acres of land to a Gulf-based firm to set up a cement plant near Dhabeji, involving an investment of 225 million dollars.

Sources in Sindh Planning and Development (P&D) Department told Business Recorder here on Wednesday that the firm would get land on 99-year lease at the rate of Rs 250,000 per acre in Dhabeji near Port Qasim.

The Sindh government had received an expression of interest (EoI) from the firm belonging to a Gulf country around 10 months back for investment in the province, sources said.

The project was forward by the Prime Minister's Secretariat and the Board of Investment (BoI) to the provincial government. The Planning and Development (P&D) Department also received intimation from the Chairman of Investment Cell, Chief Minister Secretariat, to hold the meeting on the project.

However, an informal meeting took place in the Chief Minister House on March 20 where the Sindh Chief Secretary briefed the Chief Minister about the investment proposals. Chief Minister Dr Arbab Ghulam Rahim expressed willingness to make the land requisite available and also took an aerial view of the proposed site himself.

To finalise the matter, two meetings took place in the office of Additional Chief Secretary and General Administration Department, which were attended by the secretaries of Law Department, Mines and Mineral Development Department and Land Utilisation Department to finalise a draft of lease deed.

After being approved by the Chief Minister, the government decided to provide 400 acres of land which would also earn Rs 100 million revenue for the provincial exchequer, besides bringing an investment of about a quarter billion dollars, the sources added.

Despite the fragile political situation in the country, the sources said, representatives of the firm had assured the government that the investment would not be affected in setting up the cement plant.

Business Recorder [Pakistan's First Financial Daily]

 

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Growth in revenue collection to help meet Rs 1.025 trillion target for fiscal year 2008 ​

ISLAMABAD (November 08 2007): The imposition of emergency will not affect the economic activities and unhindered growth in revenue collection will help in meeting the target of Rs 1.025 trillion set for fiscal 2007-08. Sources told Business Recorder on Wednesday that business activity is going on as usual contributing handsomely to the national exchequers on revenue day-to-day basis.

While giving an overview of the economic situation, sources said so far, the import and export activities are going on unhindered creating no visible impact on import duties and sales tax/federal excise duty during the first four months of the current fiscal year.

In short-term, all things appeared to be on track, but if the foreign investment slow down this might revenue implications in long-run. Until or unless factories of leading sectors are closed or there is major decrease in imports, the FBR would definitely meet the revenue targets.

The profitability of business has not yet shown any negative signs, but international rating agencies have been taken very seriously by the foreign investment companies and donor agencies. If the consumers demand continues and there is no serious law and order situation, the position of revenue collection would further improve in coming quarters.

Sources said the board has collected Rs 270 billion during July-October (2007-08) against target of Rs 264.1 billion, reflecting an increase of Rs 5.9 billion. The updated figures revealed that the net revenue collection has reached Rs 270 billion during first four months of the current fiscal year against Rs 237.2 billion in the same period last year, showing an increase of Rs 32.8 billion.

The board has faced some problems in revenue generation vis-à-vis target in only two areas during first quarter (2007-08). First, the payment of income tax along with the returns was comparatively less due to change in the tax payment system from fiscal 2007-08. The number of returns filed under the Universal Self Assessment Scheme (USAS) has increased, but amount of tax was less during this period.

At the same time, the advance tax payments have shown reasonable growth during first quarter July-October (2007-08). Taxpayers have been allowed to pay tax in equal instalments on quarterly basis. The board has collected around Rs 25 billion as advance tax during first four months of the current fiscal year against Rs 20 billion during the same period last year, showing the growth of 18-19 percent.

Sources said the growth in withholding tax collection during first four months of the current fiscal year also reflects the momentum of the ongoing economic activities.

On the Federal Excise Duty (FED) side, sources said that one percent special excise duty (SED) regime and collection of FED from international air travels are issued, which would be addressed on top priority basis. The FBR has been smoothly collecting one percent SED at the import stage. However, reporting of SED on local manufacturing, through combined sales tax and federal excise return, has implementation issues. Some taxpayers are not accurately showing SED on the newly devised returns.

Moreover, collection of FED from international air travel would start improving streamlining overall excise duty collection in coming quarters of 2007-08. Sources said the first quarter of every financial year is a transition period where there are difficulties. However, improved situation is evident from the revenue collection of Rs 65 billion in October 2007.

The provisional collection in October was Rs 59.3 billion, which further increased taking the total to Rs 65 billion. The board has witnessed 23 percent growth in revenue collection during October 2007 against the required growth of 21 percent.

Taking into account the current growth trend, the board would definitely meet the target of Rs 1.025 trillion in 2007-08. Giving accurate picture of revised target for first quarter 2007-08, sources said the amount of Rs 6-7 billion has been adjusted in the next few months of the current fiscal year.

Business Recorder [Pakistan's First Financial Daily]

 

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Poland wants to enhance trade with Pakistan: Consul General ​

KARACHI (November 08 2007): Polish Consul-General Ireneusz Makles said here on Wednesday that he sees Pakistan has the potential to become economic leader in Asia because of its consistent trade and economic policies.

Talking to Business Recorder, he said that Pakistan's growing economy, its strategic location as a regional hub, principal gateway to the Central Asian Republics, a large consumer market, abundant natural resources, talented and entrepreneurial people and skilled and hardworking labour, well established infrastructure, liberal investment and friendly policies, all combined together, offer enormous opportunities to foreign investors.

He said that Pakistan and Poland are privileged by the nature of their location. Pakistan is located at the confluence of three vital regions - South Asia, Central Asia and West Asia--providing the shortest access to sea for the landlocked Central Asian countries and western China. "So, Pakistan is becoming a leading, regional hub with a specific role as trade and energy corridor for China and Central Asian countries."

He said that through the Gwadar Port, Pakistan's businessmen could export Polish products to Afghanistan, Central Asian states such as Tajikistan, Kirgistan, Turkmenistan, and Uzbekistan, and to eastern region of Iran.

Makles said, "Moreover, most of the goods from these countries could be cheaper if exported by sea to Poland and other East and Central European and Baltic countries."

He said that Poland and Pakistan have established co-operation in trade and commerce, energy and agriculture sector, chemicals, machinery, textile etc. "Both countries have concluded agreements on trade cooperation, avoidance of double taxation, maritime and cultural cooperation."

He said that in 2006 the turnover in trade between Poland and Pakistan was 110 million dollars. Poland exported goods for 32.2 million dollars and Pakistan for 75.5 million dollars. "The balance of trade was in favour of Pakistan for 45.4 million dollars. In the first seven months of 2007 (January-July) the turnover in trade was 69.40 million dollars. Poland exported goods worth 10.40 million dollars and Pakistan worth 59 million dollars. The balance of trade is in favour of Pakistan for 48.60 million dollars.

He said that the biggest sector in Pakistan's exports was textile comprising cotton fabrics, cotton yarn, clothes, bedding, and towels. Other items of export were chemical fibre, leather products, sports products, vegetable products and corn (rice) plastics, toys, marble, onyx, medical and veterinary instruments (surgical, dental, pedicure, manicure instruments).

He said that Poland exported to Pakistan machines, chemicals, cast iron and steel, wood pulp and cardboard, fertiliser, newsprint, machinery engines, rolling bearings, oil seeds, and milk powder.

Makles said he was working to improve trade and economic relations, create a better environment for business community and to establish industrial units in joint ventures. He said that Pakistani investors should visit Poland and explore joint venture opportunities.

He said he was convinced that exchange of trade delegations would prove effective and provide opportunity to Pakistan's businessmen to diversify their export preferences. "Polish businessmen are keen to buy Pakistani products, which are of high quality," he added.

Makles said that Poland is celebrating its Independence Day on November 11. After violent 123 years of partitions and uprising, Poland's dream of independence was realised and it again emerged as a sovereign state on November 11, 1918. "Since then, Poland is on the path of economic progress and expanding its business activities in different countries. Pakistan is emerging as one of those countries which have stable and dependable trade and commerce relations with us," he said.

Business Recorder [Pakistan's First Financial Daily]