The economic terrorism policies of Punjab Government

[Hyde]

OK basically I am pi**ed off because of Punjab Government since last 2 years and I would like to discuss the matter with rest of you to see if the similar situation is faced in other provinces.

When I came to Pakistan last year, my uncle was worried about the crazy step of Punjab government after they announced to slash the price of sugar and cooking oil by about 200 rupees and those traders who had bought the containers of oil and sugar were forced to cut the price. It was like you buy for 2600 rupees per bag and sell it for 2400 rupees and he was always worried about the raid of food authority who might seal his business as if he is selling illegal drugs.

Now when I came to Pakistan, my chachu is worried and having sleepless nights after he told me that he purchased or imported Iranian Asphalt from somewhere, paid custom duty, taxes and everything and now the Government has imposed ban on selling Iranian asphalt as they are preferring the asphalt from their local manufacturers which sells for approximately 5000 rupees more expensive per barrel/drum.

Now he is worried that if the government come to know that I still have stocks of Iranian asphalt imported only last week, his entire consignment might be sealed by the government despite the fact that he paid all the legal taxes and transportation charges to bring it over in my city.

Is this a kind of joke by the Federal/Punjab government or they are too fuc**d off to make a proper policy. Why not just raise taxes on Iranian asphalt to such a level where it becomes more expensive than local asphalt so the traders are discouraged to import it from Iran and they can legally consume the existing stockpile of Iranian Asphalt. I know it might encourage smuggling in that case but it is the government's responsibility to cap the smuggling.

Similar is the story for some of the other business I know... To me it sounds like we are selling illegal drugs.

 

[salarsikander]

Hi,

Their own interests needs to be protected before anything, even at expense of national security!

 

[AZADPAKISTAN2009]

I think the rule of thumb is when the announcement was made , and when your uncle purchased.
If he knew the rule and then he purchased , he is stuck unfortunately.

As for fluctuating prices and changes these happen world wide and no one can do much about it , these prices change based on international demand and need.

Last time I checked , the dirt does not have a passport , so if its from Iran or Pakistan who can tell?

If anything the Iranian would be of similar quality to Pakistan

I don't see why Iranian good should be confiscated , considering your uncle paid necessary fees and transportation fees and any border taxes (if any)

If something was illegal it should have been stopped at the border and returned back to Iran ? Am I right or wrong here ?

So your uncle should sell the stuff "GUILT FREE"

 

[Viper0011.]

OK basically I am pi**ed off because of Punjab Government since last 2 years and I would like to discuss the matter with rest of you to see if the similar situation is faced in other provinces.

When I came to Pakistan last year, my uncle was worried about the crazy step of Punjab government after they announced to slash the price of sugar and cooking oil by about 200 rupees and those traders who had bought the containers of oil and sugar were forced to cut the price. It was like you buy for 2600 rupees per bag and sell it for 2400 rupees and he was always worried about the raid of food authority who might seal his business as if he is selling illegal drugs.

Now when I came to Pakistan, my chachu is worried and having sleepless nights after he told me that he purchased or imported Iranian Asphalt from somewhere, paid custom duty, taxes and everything and now the Government has imposed ban on selling Iranian asphalt as they are preferring the asphalt from their local manufacturers which sells for approximately 5000 rupees more expensive per barrel/drum.

Now he is worried that if the government come to know that I still have stocks of Iranian asphalt imported only last week, his entire consignment might be sealed by the government despite the fact that he paid all the legal taxes and transportation charges to bring it over in my city.

Is this a kind of joke by the Federal/Punjab government or they are too fuc**d off to make a proper policy. .

From the details you've provided, these are things that happen in a businesses and are considered "Risks" and "Cost of Doing Business". Business isn't easy, sometimes you lose money and the examples above are like that.

A business focus government doesn't go against its own businessmen. That defeats the purpose. This isn't Mushy or Zardari, you have real businessmen who've actually done a lot of work and are establishing businesses to grow inside and outside Pakistan.

I will now address your examples:

1) Business and associated taxes, duties, and prices, run on demand and supply. If the INTERNAL supply is less, you import it and its costly. But if someone "stocked it" and the internal supply increased.....well the internal commodity will become cheaper, so the "stockpile" would be sold for a lesser price as it was imported when the prices were high. This explains the Iranian Asphalt deal.

Iranian commodities were banned already. Not sure how you got those to begin with. Pakistan had to cancel the IP pipeline and all, due to US sanctions.

2) Sugar, Oil and regular commodity prices: are also subject to change in the Commodity market. A PM or a CM don't regulate them as they want to, to penalize JUST your uncles. From both stories, it sounds like you guys kept a large inventory without selling, hoping the price and all would go up (stockpile), but now, the prices infact went down due to international issues or surplus supply or government regulations. So I'd try to understand what "assumptions" did your uncles make when they wanted to stock up on these items without understanding government regulations, market condition, demand, supply and all. These were either wrong business decisions, or unfortunately cost of doing business. No conspiracy theory to make your uncles suffer, I can assure you of that. Tell them to study the market and a specific business next time, before just start to buying stuff.

By the way, things like these happen in the US too, I've personally lost a lot of money in the stock market, just like pretty much every other American a few years ago.

Millions of Americans lost their homes in the Financial crisis starting 2008, and majority of them, due to bad financial decisions they made, to get a mortgage beyond their capacity to pay off. So unfortunately, this is just the cost of doing business, or cost of wrong decisions.

 

[Gauss]

This is the way Pakistani government is uneducated about economics. They are always trying to control the market like some king from middle ages, with bans, price floors and ceilings, etc. They havent even learnt the basic lesson of economics that free markets will maximize economic well being. And this is why Pakistan will remain a hell-hole for some time to come.

 

[notorious_eagle]

Wait did Punjab even have an economic policy? I thought the only policy Punjab had was to build roads and bridges.

I am sorry my friend, but your uncle is about to learn the lesson the hard way. He is not the first, many people have been burned by the Sharifs before. Poultry, Wheat, Cement you name it unless the industry has direct interests from the Sharif Family. Sugar Industry will never face any problems.

 

[Faiez]

add price control committee to the list......fu*king the ordinary fruit/vegetable seller....for awami lollypop.

It's a socialist dictatorship that we have here....that's what it is....And they claim to be business friendly....

Continuous interference in the markets have completely destroyed the business environment in Pakistan. These people are no different from Bhutto and his nationalization. What Bhutto did to sharifs in one go, sharifs are now doing to pakistan slowly and painfully....

 

[Imran Khan]

its not only this sir jee

i have buy land twice first time i pay only 7 thousands per one million and now i have paid 50000 ruppes transfer for each one million . god damn 5% tax on land transfer i have paid these chalans in bank of punjab

another BS now we can not transfer our remits from here to our Pakistan account as they imposed with holding tax 3%
matlab every 1 million i windrow from my account i have to pay 30000 tax .they said they will return it but how when i don't know .

 

[!eon]

Don't worry, they will squeeze up to last drop.
I heard there was or may be is tax on using solar energy

 

[Dubious]

I am pi**ed off because of Punjab Government since last 2 years

really? I can quote your posts supporting EVERYTHING they did....Even when we complained about the police you were forefront supporting that police needs to do this and that....

You were also fore front supporting whatever ORDERS noon gives it is for Democracy! Be it killing be it becoming Altaf style bhatta khori be it buying judges!

You comments on metro is good - even though it is heavily subsidized so that it could come up and be praised but it cant pay back or earn for Pakistan as advertised!

Your comments on how the law is always right no one speak against it or that it is always right no matter how much tax they impose all is right ....Traders were wrong and stupid to protest, Solar panel tax is a lie, Solar energy extra tax is a lie, tax on remittance is a not harmful ...everything is awesome economy is blooming like never before!!!!!

When people were complaining they were illegal traders, Jub khud pay pari now the policy is wrong?

.they said they will return it but how when i don't know .

if you are a tax payer in Pakistan which most people abroad arent ....So it is just to take a bit of sugar from those abroad into their own pockets...in the false pretense that it is coz they have withdrawn too much loan more than their freaky projects can pay back...Metro subsidized so it can be praised and now it cant pay back as expected!

.And they claim to be business friendly....

For their friends ONLY with something something for them of course..

Not the awaam!

From the details you've provided, these are things that happen in a businesses and are considered "Risks" and "Cost of Doing Business". Business isn't easy, sometimes you lose money and the examples above are like that.

Yes but Burqa Shariff was promoting himself as BUSINESS FRIENDLY....

You dont harm business and call yourself business friendly!

Promoting Pakistani products is good...But even an idiot will tell you announce first so that whatever someone has purchased can sell it off before you go around banning things!

Oh wait that happens when people making policies have a brain!

 

[surya kiran]

Similar is the story for some of the other business I know... To me it sounds like we are selling illegal drugs.

Bhai, tu legal daaka daal. You seemed to have knowledge of stock and commodities markets. Wahan khelo. Khushi manao. Trading in actual commodities is for people who want to do hard work

 

[Faiez]

Promoting Pakistani products is good

that's how you promote pakistani products ? By banning/restricting imports ?

That's the wrong way.....There should be free trade.

 

[Hyde]

1) Business and associated taxes, duties, and prices, run on demand and supply. If the INTERNAL supply is less, you import it and its costly. But if someone "stocked it" and the internal supply increased.....well the internal commodity will become cheaper, so the "stockpile" would be sold for a lesser price as it was imported when the prices were high. This explains the Iranian Asphalt deal.

No it does not explain Iranian Asphalt deal whatsoever. You did not address my question but only told the basics of how the business runs.

Iranian commodities were banned already. Not sure how you got those to begin with. Pakistan had to cancel the IP pipeline and all, due to US sanctions.

They were not banned until few days ago. Government of Pakistan/Punjab banned it all of a sudden just like they do with other products all of a sudden. That's your assumption out of your love for PML-N.

2) Sugar, Oil and regular commodity prices: are also subject to change in the Commodity market. A PM or a CM don't regulate them as they want to, to penalize JUST your uncles. From both stories, it sounds like you guys kept a large inventory without selling, hoping the price and all would go up (stockpile), but now, the prices infact went down due to international issues or surplus supply or government regulations. So I'd try to understand what "assumptions" did your uncles make when they wanted to stock up on these items without understanding government regulations, market condition, demand, supply and all.

Uncle is just an average trader you find in the main markets. He basically supply sugar and cooking oil to other shop owners and marriage halls after purchasing directly from the manufacturers. He buys containers almost everyday and sells it on the same day. There is no stock with him as its daily business of him.

The problem is, sometimes Punjab government reduces prices all of a sudden and the stock bought by traders left in the stores suddenly become too expensive to sell. They are left with no choice but to either match the price they purchased just 1-3 days ago or sell in loss. If they match the price, they all fear about the raid by food authority and the embarrassment of getting caught is on top of it.

These were either wrong business decisions, or unfortunately cost of doing business. No conspiracy theory to make your uncles suffer, I can assure you of that. Tell them to study the market and a specific business next time, before just start to buying stuff.

It's just plain stupid policy of the government which has been happening since my childhood. They can't control the prices, they will suddenly have a dream and slash prices to unbearable level which is not acceptable to the traders as they can't shut their stores neither can they afford to sell in loss.

By the way, things like these happen in the US too, I've personally lost a lot of money in the stock market, just like pretty much every other American a few years ago.

No it doesn't happen in USA. It just your love for the present government. If you buy milk for 50 cents a litre, it will be 55 cents next year and may be 60cents on the following year unlike Pakistan where the same milk might be selling for 80 rupees next year and 15 rupees on the following year.

 

[Dubious]

that's how you promote pakistani products ? By banning/restricting imports ?

That's the wrong way.....There should be free trade.

Read my whole sentence.....

 

[Hyde]

I think the rule of thumb is when the announcement was made , and when your uncle purchased.
If he knew the rule and then he purchased , he is stuck unfortunately.

As for fluctuating prices and changes these happen world wide and no one can do much about it , these prices change based on international demand and need.

Last time I checked , the dirt does not have a passport , so if its from Iran or Pakistan who can tell?

If anything the Iranian would be of similar quality to Pakistan

I don't see why Iranian good should be confiscated , considering your uncle paid necessary fees and transportation fees and any border taxes (if any)

If something was illegal it should have been stopped at the border and returned back to Iran ? Am I right or wrong here ?

So your uncle should sell the stuff "GUILT FREE"

exactly

We basically have a construction company in Pakistan alongside other businesses and now my "chachu" owns that company after he parted ways with my dad couple of years ago. He also rents heavy machinery to construction companies and sells asphalt and other material for road construction. He (we) has been buying Asphalt since past 30-40 years and usually buying from bigger traders or importing from Iran. The process is pretty much straight forward.

You order, you pay, you import, you pay custom duty and taxes, you arrange a transporter, you pay the fee upon arrival and you sell it and earn profit on it. Everything from start to beginning is legal. The only logic my chachu came to learn is that National Refinery sells the same qualify asphalt for approximately 5000 more expensive than imported asphalt from Iran. Now the national refinery is state owned and can generate income for the government so they banned Iranian asphalt just to prefer national refinery.

The problem is we don't mind if they want to prefer National refinery but it is not right to ban the sale of Iranian asphalt inside Pakistan. They could raise the taxes or ban imports of Iranian asphalt that is not been legally arrived in Pakistan. If the product is imported, customs paid and even income tax will be charged after we file tax returns, why the hell is not allowed to sell it? Why not just stop further trades from flowing inside Pakistan and let the existing stockpile be consumed without worry?

really? I can quote your posts supporting EVERYTHING they did....Even when we complained about the police you were forefront supporting that police needs to do this and that....

You were also fore front supporting whatever ORDERS noon gives it is for Democracy! Be it killing be it becoming Altaf style bhatta khori be it buying judges!

You comments on metro is good - even though it is heavily subsidized so that it could come up and be praised but it cant pay back or earn for Pakistan as advertised!

Your comments on how the law is always right no one speak against it or that it is always right no matter how much tax they impose all is right ....Traders were wrong and stupid to protest, Solar panel tax is a lie, Solar energy extra tax is a lie, tax on remittance is a not harmful ...everything is awesome economy is blooming like never before!!!!!

No idea what you are talking about really, I have always been opposing N League for unjustified actions, I even voted against them but the difference between you and me is that you will criticise everything and I will pick n choose different projects of Federal Government. For me it is not N League, it is Federal Government and I reserve the right to support or oppose any decision by the government. They have taken some good decisions and some crazy decisions in their tenure, I have tried my best to be as fair as possible. Any deal they make does not automatically become bad as is the case in your style of posting.

When people were complaining they were illegal traders, Jub khud pay pari now the policy is wrong?

It is not about apne pe pari... Noon League has always been considered pro-business community government that is why they have strong roots in Pakistani politics. They have taken some great measures such as eliminating taxes from trades across the cities otherwise if you know what used to happen in Pakistan, you might die laughing out loudly. But they certainly did help business communities grow and gain the confidence of traders.

But the need of Pakistan is such that we need to tighten the policies to secure money from direct taxes but it does not mean you pick and choose and make biased policies.