JavaScript seems to be disabled in your browser.
You must have JavaScript enabled in your browser to utilize the functionality of this website.


News Clips 21 February, 2015

[ Exports to EU rise 20pc to €5.067bn ]
[ Exporters mull legal options against FBR on refund claims ]
[ India, Pakistan can become growth opportunity for each other: Raghavan ]
[ FBR notifies high WHT rates for non-filers ]
[ Ministry starts textile policy’s implementation ]

Exports to EU rise 20pc to €5.067bn   [ top ]

DAWN, February 21, 2015
ISLAMABAD: Pakistan’s exports to the European Union grew by 20 per cent to 5.067 billion euros (Rs585bn, $5.76bn) in the first eleven months of 2014 from €4.22bn a year ago, according to the EU official data.

The growth, which came mainly on the back of preferential market access under the GSP+ scheme, was largely shared by three EU countries — the United Kingdom, Spain and Germany.

By contrast, exports to Luxembourg dropped by 13pc, Estonia 13pc, Ireland 5pc and Croatia 40pc.

Trade with the 28-nation bloc was in surplus of €1.352bn during Jan-Nov 2014

The preferential market access to the European markets under GSP+ went effective from Jan 1 and will remain available for the next 10 years.

The commerce ministry set a target of more than €1bn increase in exports to EU during 2014. The 20pc rise during July-Nov, however, amounted to €843 million.

Country-wise data shows that a growth of 25pc (€225.527m) came from the UK whose imports from Pakistan rose to €1.128bn during Jan-Nov 2014 from €902.524m a year earlier.

Exports to Spain swelled by 41pc, or €163.482m, to €559.028m from €395.546m. This was the highest increase in Pakistan’s exports to Spain during the entire history of trade between the two countries.

A trade analyst said that despite Spain’s persistent vicious circle of high unemployment, low wages, fall in purchasing power, decline in domestic demand and shrinkage in non-essential imports (including textile and clothing), the increase in exports was the highest among all the 19 eurozone countries, including Germany, France and Italy, which have stable, growing and larger economies than Spain’s.

Exports to Germany increased by 17pc (€145.811m) in Jan-Nov to €1.015bn compared to €869.404m a year earlier.

Pakistan’s exports to Italy edged up by 15pc (€68.346 m) to €515.058 m from €446.712m last year. Exports to France went up by 15pc (€50.550 m) to reach €397.026m from €346.475 m.

Exports to the Netherlands rose by 10pc to €412.865m from €374.458m; to Belgium by 12pc to €334.937m from €299.408m; and to Sweden by 15pc to €102.618 m from €89.024m compared to the same period of 2013.

Export proceeds to the remaining 20 EU countries were far less than €100m in terms of value. However, growth to some countries was in double digits in terms of percentage.

Pakistan’s exports to Austria increased by 96pc, Poland 42pc, Czech Republic 23pc, Greece 19pc, Slovenia 62pc, Finland 22pc, Bulgaria 43pc, Hungary 37pc, Denmark 4pc, Portugal 2pc, Lithuania 10pc, Slovakia 6pc, Romania 5pc, Cyprus 33pc, Latvia 14pc and Malta 2pc.

On the other hand, imports from the EU during Jan-Nov 2014 increased by 8pc to €3.715bn as against €3.444bn a year ago. The increase was mainly driven by more imports from the UK, followed by France and the Netherlands.

The overall trade with the EU was in surplus of €1.352bn during the period under review.



Exporters mull legal options against FBR on refund claims   [ top ]

The News, February 21, 2015
KARACHI: Textile exporters are considering legal options against the Federal Board of Revenue (FBR) after the revenue body closed several claims of deferred sales tax refunds without giving fair opportunity to claimants to submit relevant information, sources said on Friday.

The said several members of Towel Manufacturers Association (TMA) of Pakistan are in consultation to file petition against the concerned tax authorities for rejecting the claims without giving opportunity of being heard.

It is worth mentioning that the Member (Inland Revenue –Operations) of FBR has issued directives to Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) to dispose of all the deferred sales tax refund claims as per tax laws by February 28, 2015.

The tax departments have also been instructed to send report to FBR headquarters by March 02 that no refund claims older than 90 days are pending.

In compliance of this order the tax departments have already rejected claims worth billions of rupees - mostly from textile sector – through automated objections.

Exporters complain that the Federal Board of Revenue, despite been agreed, has not provided access to taxpayers to assess the raised objections.

Muzammil Hussain, Secretary General, TMA said it was decided that PRAL’s software Computerised Risk-based Evaluation of Sales Tax (CREST) would be linked to the association network so that exporters can find out the ‘breaking of supply chain’ on the spot.

Since the development of link building is time consuming, it was resolved that the association would provide a list of deferred supply chain so that the FBR may provide data showing breaking of supply chain, he added. “A list of cases was provided to RTO Karachi but the issue was unresolved till to date.”

Last week, the association had approached the FBR chairman through a letter informing him that despite agreement tax officials were paying no heed to the repeated requests of its members.

“If such condition prevails than how ‘supply chain’ issue will be resolved and how FBR will clear deferred case by February 28,” the letter said.

TMA secretary said there were several orders issued by the superior courts on supply chain issue. Hussain claimed that the Federal Board of Revenue is also violating those court orders.

Officials in RTO Karachi declined to comment on the issue but said that deferred claims had been rejected on merit. A senior official said that tax laws provide any refund claimant engaged in sales or purchase with a unit, which blacklisted after or prior to the transactions will not be entertained for processing of refunds.

The official, however, said that in many cases tax officials were found negligent in treating refund claims as FBR instructed the field formation to clear refund claims, including removal of objection or rejecting the claim, in 90 days from the date of filing.

India, Pakistan can become growth opportunity for each other: Raghavan   [ top ]

The Nation, February 21, 2015
Lahore - High Commissioner of India T.C.A Raghavan has said that India and Pakistan have the potential to become a growth opportunity for each other. Therefore, he said, both countries should take collective measures for mutual benefit.

He was addressing at the Lahore Chamber of Commerce & Industry on Friday. The Indian High Commissioner said that we have to move forward and take wider view of the mutual trade. He said that in the recent years, the Indian economy has emerged as one of the fastest growing economies of the world.

He said that trade fairs and exhibitions could play a vital role in enhancing the mutual trade ties. He said that it is a matter of gratification that private sectors of India and Pakistan are holding fairs and exhibitions in each other’s country.

He informed the house that trade volume between India and China is likely to reach $100 billion mark by the end of this year. He also agreed that hurdles coming in the way of mutual trade should be removed on priority basis. He said that it is matter of concern that despite having many commonalities between the two countries, we have yet to benefit from each other’s strong areas.

He said that both countries could enhance cooperation in various sectors of economy. He said that there is immense potential in the tourism sector between Pakistan and India, especially religious tourism that has so far just been fractionally exploited. He said that both countries need to create an environment to let the healthy competition prevail. Pakistan and India are capable of supplementing each other to attain win-win situation. LCCI President Ijaz Mumtaz said that there are issues prevailing on both sides in the way of normalization of trade links between India and Pakistan. He said that Pakistani government as well as business community fully understands the significance of regional trade which cannot promise any good results until Pakistan and India act with a futuristic approach. He said that that people to people contacts can play an effective role in dispelling wrong perceptions about each other. He said that both governments should draw a clear line between political and economic issues. It is high time that trade between both the countries should be given a fair chance to contribute towards peace and prosperity in the region.

It is to be noted that from 2012 to 2013, a noticeable increase was witnessed in the bilateral trade figures. In 2012, the total trade was around USD 1.92 billion which swelled to USD 3.28 billion in 2013. In that period, Pak exports to India increased from USD 348 million to USD 403 million. Similarly, the imports from India have shown increase by reaching to USD 1.87 billion from USD 1.57 billion.

He said that both countries have to put in more efforts to further enhance bilateral trade and for that matter we need to innovate the existing ways of making business deals. Holding single country exhibition has proved to be a successful method. To reciprocate India show being held in Lahore every year, LCCI organized Pakistan show last year in Amritsar. These efforts are certainly contributing in bridging the gaps between private sector representatives across the borders. For holding the Pakistan show in Amritsar, cooperation shown by Indian high commission was commendable.

FBR notifies high WHT rates for non-filers   [ top ]

DAWN, February 20, 2015
ISLAMABAD: The Federal Board of Revenue (FBR) has issued instructions to agents for deduction and collection of withholding taxes from filers and non-filers of tax returns.

An income tax circular no. 1 of 2015 issued here on Thursday made broader distinction between filer and non-filers.

The filer means a taxpayer whose name appears in the active taxpayers list issued by the board from time-to-time or is holder of taxpayer’s card, while non-filer means a person who is not a filer of income tax return.

The concept of higher rates for non-filer has been notified through an SRO136 of 2015, which was further extended to two more sectors — import and services.

According to the circular, those industrial undertakings which are neither on Active Taxpayers List (ATL) nor the holders of taxpayer’s card and are importing remeltable steel and directly reduced iron for its own use will be charged withholding tax at 1.5pc of the import value as increased by the customs duty, sales tax and FED whereas filers will continue to pay at 1pc.

Those persons who are importing potassic fertilisers are neither on ATL nor the holders of taxpayer’s card will be charged tax at 1.5pc of the import value as increased by the customs duty, sales tax and FED whereas filers will continue to pay at 1pc.

And those persons who are importing urea and are neither on ATL nor the holders of taxpayer’s card will be charged at 1.5pc of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay at 1pc.

Those manufacturers, who are neither on ATL nor the holders of taxpayer’s card will be charged at 1.5pc of the import value as increased by the customs duty, sales tax and FED whereas filers will continue to pay at 1pc.

Those persons who are importing pulses and are neither on ATL nor the holders of taxpayer’s card will be charged at 3pc of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay at 2pc.

The commercial importers who are neither on ATL nor the holders of taxpayer’s card will be charged tax at 4.5pc of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay at 3pc.

Those ship-breakers, who are importing ships and are neither on ATL nor will the holders of taxpayer’s card be charged tax at 6.5pc whereas filers will continue to pay at 4.5pc.

Importers who are industrial undertakings and are not covered are neither on ATL nor the holders of taxpayer’s card will be subject to collection of tax at 8pc whereas industrial undertaking falling in this category which is on ATL or holders of taxpayers card will continue to pay at 5.5pc.

The importers which are companies and are neither on ATL nor the holders of taxpayer’s card will be charged tax at 8pc whereas importers in this category which are on active taxpayers list or holders of taxpayer’s card will continue to pay at 5.5pc.

Persons who are neither on ATL nor the holders of taxpayer’s card will be charged tax at 9pc whereas filers in this category will continue to pay at 6pc.

Those companies which are neither on ATL nor the holders of taxpayer’s card will be charged tax at 12pc whereas filers will continue to pay at 8pc.

Persons other than companies which are neither on ATL nor the holders of taxpayer’s card will be charged at 15pc whereas filers under this category will continue to pay at 10pc.

Ministry starts textile policy’s implementation   [ top ]

The Nation, February 19, 2015
ISLAMABAD - Ministry of Textiles has started implementation of newly announced textile policy 2014-19, worth Rs64. 15 billion.

According to officials, textile officials held first meeting with Ministry of Planning on Tuesday and meeting with Ministry of Finance is expected in next week.

In next five years we will spend around Rs65 billion out of which around Rs25 billion would be provided by Planning Commission, in order to discuss the financing and the execution of the textile policy plans, we had a meaningful meeting with Planning Commission officials, said an official.

According to the new policy, Planning Commission would cater for Rs 23.

40 billion through PC-1 to be allocated for skill development of handloom workers, textile exhibition, hand-knotted carpets, hand-knotted carpet training, SME, trainings, product development & innovation fund, skill development programme, textile universities, world textile centre, weaving city, mega and minor cluster development and better cotton initiative.

The official further said that since Planning Commission had been on board, while preparing the draft of the policy, already many things are agreed upon and rest were discussed in the meeting.

Soon, we will finalise the modalities and actual progress would be started on ground, official said.

According to the plan, Finance Division will provide Rs 40.

6 billion whereas Rs 23.

5 billion will be financed through Planning Commission and Textile Development Fund.

The textile policy 2014-19 aims to double value addition from $1 billion per million bales to $2 billion per million bales in next five years, double the textile exports from $13 billion to $ 26 billion, facilitate investment of additional $5 billion in machinery and technology, improve fiber mix in favour of non-cotton i.e from 14pc to 30pc, improve product mix especially in garment sector from 28pc to 45pc, promote use of ICT, development and strengthening of clusters.

The officials further briefed that Rs 40.

6 billion have been reserved for incremental DLTL, Technology Upgradation Fund, Brand Development Fund and drawback on deemed import basis, for next five years.

The newly announced policy was also criticised by some.

Some stakeholders have pointed out that in order to achieve target of 100pc increase in value addition from $1 billion per million bales to $2 billion per million bales over the next five years, government should ensure uninterrupted power supply to the industry along with initiating an aggressive marketing campaign to attract foreign investors on government level.