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News Clips 20 December, 2013


[ GSP plus status: gas supply to textile industry will help reap benefit: FPCCI ]
[ One-Stop Shop for registrations: SECP, FBR and EOBI ink MoU ]
[ Cotton prices continue to remain stable ]
[ December 16 deadline ends: non-filers liable to pay penalty: FBR chief ]
[ Winters bring unemployment to textile industry ]
[ Products diversification a must to benefit from GSP plus ]

GSP plus status: gas supply to textile industry will help reap benefit: FPCCI   [ top ]

Business Recorder, December 20, 2013 
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday said the provision of natural gas to the export-oriented textile industry in Punjab will help the country benefit from the recently awarded GSP plus status to Pakistan. 

"The government should try to fulfil all the energy needs to the export-oriented industry to fully benefit from the trade discounts amid chronic energy shortages," Zubair Ahmed Malik, President of the FPCCI said on his return from Belgium and Germany where he attended critical GSP plus meetings. He also studied the operations of various chambers, trade bodies and associations in the both countries and exchanged views with the trade officials. 

Speaking to the business community, Malik said the decision to provide gas to industry in Punjab would save jobs, provide employment to many and help Pakistan improve the forex reserves through exports. He called upon the industrial units benefiting from trade concessions to upgrade their plans and boost capacity. Malik lauded the economic direction of the government terming it encouraging in the present circumstances and said that PM's youth loan scheme would boost economic activity as young were fully capable to produce results if they were provided opportunities. 

Welcoming the culmination of the power sector circular debt, he said it was one of the biggest threats to the economy which blocked badly needed investment in the power sector. Addition of 1700MW power to the system by the PML-N government was a good step but it was not enough to greatly improve the industrial production, he observed. The FPCCI chief said that promise of Finance Minister Ishaq Dar to ensure greater clarity was encouraging as economy could not prosper in absence of transparency. The improved performance of the stock exchange was reflective of the policies of the government which must be sustained, he added. 

"The government should find a way to provide gas to the fertiliser sector through improved production and import otherwise country will have to spend Rs 450 billion on import and subsidy or brave reduced crops," he noted. "The government should revisit some policies, reduce deficit, boost development expenditure, lure foreign investors and overseas Pakistanis, and pay special attention to generate revenue from millions who have never been taxed," he urged. 

One-Stop Shop for registrations: SECP, FBR and EOBI ink MoU   [ top ]

Business Recorder, December 20, 2013
The Securities and Exchange Commission of Pakistan (SECP), Federal Board of Revenue (FBR) and Employees Old-age Benefits Institution (EOBI) signed a Memorandum of Understanding to establish virtual One-Stop Shop (OSS) to facilitate entrepreneurs and investors to get online registrations of SECP/FBR/EOBI. 

On the eve of conference on "Integrated Transit Trade Management System" organised by the FBR here on Thursday, the MoU was signed in the presence of Finance Minister Ishaq Dar, who chaired the event. The MoU was signed by FBR Chairman Tariq Bajwa, SECP Chairman Tahir Mehmood and a senior EOBI official to facilitate the entrepreneurs and investors and ensure an expeditious service delivery through One-Stop Shop to integrate business, tax and social security registrations, on virtual/online basis. 

After signing of the MoU, the project has been formally launched and implementation would be started forthwith. A web portal will be developed to provide a single interface for investors intending to get their company registered with the Securities & Exchange Commission of Pakistan (SECP), NTN/tax registration with the Federal Board of Revenue (FBR), and employers' registration with Employees Old-Age Benefit Institution (EOBI). 

On the conclusion of MoU singing ceremony, an official told Business Recorder that a Memorandum of Understanding (MoU) for the establishment, operation and administration of a virtual One-Stop Shop (OSS) for business registration has been signed between the Securities & Exchange Commission of Pakistan (SECP), Federal Board of Revenue (FBR) and Employees Old-Age Benefit Institution (EOBI). The signing ceremony was chaired by the Finance Minister. The MOU was finalised after extensive deliberations by a working committee formed and supervised by the Economic Reforms Unit (ERU), Ministry of Finance, Government of Pakistan, and comprising officers from the three authorities. 

The Virtual OSS shall be a web-portal to provide a single interface for investors intending to get their company registered with the SECP, followed by NTN/tax registration with the FBR, and employers' registration with EOBI, and without the need to physically visiting the offices of the said authorities. 

The project is the first of its kind in Pakistan with the underlying objective to facilitate the entrepreneurs and investors and ensure an expeditious service delivery by integrating the registration procedures of the three government authorities. OSS is a global best practice being followed by governments in various countries to facilitate business start-up, either on virtual or physical basis, with the aim to reduce administrative procedures and the time to obtain business approval. The launch of OSS shall further improve the doing business ranking in the World Bank doing business indicators, which is likely to have favourable implications for investment promotion to attract investors from within and outside the country. The establishment of an OSS is also a policy condition in the area of business climate reforms as laid down in the Memorandum of Economic Financial Policy entered between the Government of Pakistan and the International Monetary Fund pursuant to its Extended Fund Facility, he explained. 

In the long run, and after the launch of the virtual OSS, it is contemplated to strategize ways and means to expand the scope of OSS, so as to include other regulatory authorities in the virtual and/or physical modes, in consultation with the government. 

A working committee comprising officers from the operational and information technology domains of the aforesaid parties was formed by Economic Reforms Unit (ERU), Ministry of Finance, which has made extensive deliberations on the said project. 

Cotton prices continue to remain stable   [ top ]

Business Recorder, December 20, 2013
Since the inception of this week, cotton prices have remained steady and stable even though business volume has mostly been of just average scale. There are expectations that there would be a larger crop in Pakistan than envisaged earlier. There appear several positive factors for the cotton economy such as bestowing of General Systems of Preference (GSP) plus status by the European Union to Pakistan, prospects of more yarn exports to China and better gas supply to the Punjab textile industry. 

It is generally believed that cotton output this year in Pakistan should range between 13.25 to 13.5 million bales (155 Kgs), while the domestic mills consumption is being projected between 14.75 and 15.25 million bales. Exporters are expected to ship nearly 600,000 bales while the mills may import anywhere from 1.5 to two million bales. 

Though the yarn rates have increased, ginners are not easy sellers of raw cotton. Quality problem of lint persists, but mainly in Sindh province. Punjab lint prices are stable since the last couple of days seeking higher levels. 

The Pakistan Cotton Ginners Association (PCGA) has just issued its seedcotton (Kapas/Phutti) arrivals report for the current season (August 2013 / July 2014) showing total arrivals till the 15th of December 2013 at 12,249,949 lint equivalent bales which is 13.75 percent more than compared to the previous season 2012 / 2013 for the same period. From this quantity, the domestic mills have lifted a reported 9,962,296 bales while the shippers have purchased 315,804 bales. Total unsold stocks remaining with the ginners in both pressed and loose form are 1,971,849 bales. 

With these statistics, it is clear that most sectors of the cotton and textile economy are performing well and look forward to larger exports of textiles to the European Union having being conferred the GSP plus status by the European Union. According to a recent report from Islamabad, the federal minister for Commerce and Textile Industry Khurram Dastgir Khan told the Senate that the General System of Preference plus (GSP Plus) will assist to increase Pakistan's exports by one billion US dollars annually. In this regard the Chairman of All Pakistan Textile Mills Association (APTMA) Punjab S.M. Tanveer has observed that nearly three million workers will continue to work during the next three months due to the federal government's decision of supplying 100 mm cfd gas to the Punjab textile industry which will improve the industry's exports and performance generally. He praised the Prime Minister Nawaz Sharif, Punjab Chief Minister Shahbaz Sharif, Federal Finance Minister Ishaq Dar and Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi for supplying the necessary gas to the Punjab based textile industry in the national interest. 

The prices of seedcotton in Sindh ranged from Rs 2,400 to Rs 3,100 per 40 Kgs on Thursday while in the Punjab they ranged from Rs 2,900 to Rs 3,300 per 40 Kgs. Lint prices in Sindh ranged from Rs 5,200 to Rs 6,600 per maund (37.32 Kgs) while in the Punjab they ranged from Rs 6,400 to Rs 6,800 per maund. 

In the evening, a sale of 1,000 bales of cotton from Ahmadpur East in Punjab was reported at the price of Rs 6,600 per maund (37.32 Kgs). On the global economic and financial front, the leading news of the week was the announcement by the out going Federal Reserve Chairman Ben Bernanke that the bond buying scheme of $85 billion will be reduced by $10 billion to $75 billion per month from January 2014. The notable feature of this change or reduction in Quantitative Easing (QE) introduced five years ago in America was the trifle amount that has been tapered or reduced. Improving employment figures in the United States and the better labour market conditions have been cited as the reason for reducing the bond buying figure of $85 billion to $75 billion. 

The equity markets around the world have taken the Fedral Reserves decision to reduce the stimulus scheme in a stride and have mostly gone up to make further gains. Though the decisions of the Federal Reserve to taper the bond buying scheme signifies that QE will not go on forever, the amount of trimming by $10 billion from the entire scheme is symbolic rather that substantial. 

Ben Bernanke may be given the credit, however, of initiating a policy or programme for the incoming Federal Reserve Chief Janet Yellen to follow and implement the tapering issue and create an option for the Federal Reserve to tackle its dollars 4 trillion balance sheet rationally. 

It may be noted that for the time being the reduction in the Federal Reserve's bonds purchase performance is relatively small which also hints at a longer time-frame during which the tapering will be carried on. Therefore, the decision to reduce the Quantitative Easing (QE) which started five years ago will probably be very gradual and not upset the investor's faith in the worthiness of various equities being traded on the market for the time being. 

Thanks to the Federal Reserve's policy of providing sundry stimuli to the financial and equity sector which some quarters quantify it at dollars four trillion over the past five years or so. It has yet to be seen how this gigantic amount splashed over the investing and banking sector will be recouped. Besides, there are fears in case any bubbles have been formed on the equity or property markets which may burst unexpectedly. 

Up to now, the United States stocks markets values have gone up by nearly 30 percent on US Quantitative Easing scheme this year. Both the Dow Jones average and Standard & Poor's have made healthy gains, as also sundry indices around the world during 2013. Tokyo's Nikkei Index gained 1.5 percent while S and P ASX 200 added 1.7 percent on Wednesday. Equity prices also made good gains in Taiwan, Seoul, Singapore and New Zealand. 

Thus we have seen that the buoyancy seen on American bourses where the stocks were trading well impacted the Asian markets impressively. The United States Federal Reserve policy to wind down the stimulus measures slowly had positive effects on several shares and commodity markets around the world. 

December 16 deadline ends: non-filers liable to pay penalty: FBR chief   [ top ]

Business Recorder, December 19, 2013
Federal Board of Revenue (FBR) Chairman Tariq Bajwa on Wednesday said that the FBR will impose penalty for non-filing of income tax returns after expiry of the extended deadline of December 16, 2013. Talking to Business Recorder here on Wednesday, the FBR Chairman shared the future strategy to deal with the non-filers of income tax returns and wealth statements and showed commitment that the FBR will now collect penalty as per law from such taxpayers. 

The future plan of documentation has also been discussed between the Finance Ministry and the FBR. Tariq Bajwa stated that the non-filers will be liable to pay penalty for each day of default as per provisions of the income Tax Ordinance 2001. Those who would delay filing of returns would be liable to pay penalty as per law. The FBR will now issue notices to the non-compliant existing taxpayers, who failed to file their income tax returns by the extended deadline of December 16, 2013. 

He added that the government's new incentive scheme for dormant taxpayers and new taxpayers cover filing of returns for the past years. However, existing taxpayers were required to file returns for Tax Year 2013 by the extended date of December 16. The penalty provisions would be invoked against the taxpayers, who have not filed their returns for Tax Year 2013 as admissible under the law, FBR Chairman added. 

When contacted, sources said that the FBR will launch enforcement drive against the non-compliant taxpayers by issuing notices to the non-filers under Section 114 of the Income Tax Ordinance 2001. Despite repeated extensions in the date of filing of income tax returns, certain existing taxpayers have not filed their tax returns for Tax Year 2013. The FBR will launch action against the non-compliant taxpayers after expiry of extended last date for filing of returns. 

Meanwhile, a statement of the Ministry of Finance issued here on Wednesday said that Finance Minister Ishaq Dar has expressed satisfaction over the performance of the FBR with regard to collection of revenues in the last 5 months of the tax year 2013-14. These observations were made by him during the presentation made by the FBR at the Finance Ministry Wednesday. 

The Finance Minister was informed by the Chairman FBR that an amount of Rs 797 billion was collected by FBR up to November 2013 which shows an increase of 17 percent as compared to the corresponding period last year. The chairman also informed the Finance Minister Ishaq Dar that 814,981 tax returns were filed in the financial year 2013-14 up to 16 December, 2013 only. Whereas, during the whole financial year 2012-13 the number of returns filed were 744,866. 

The Finance Minister directed FBR to facilitate investors and implement the new incentive scheme announced by Prime Minister Mian Mohammad Nawaz Sharif in letter and spirit. The meeting was attended by senior officials of the Ministry of Finance and the FBR, it added. 

Winters bring unemployment to textile industry   [ top ]

ARY NEWS, December 19, 2013 
Lahore: Some three million textile workers will continue to work during the next three months due to the federal government’s decision to supply 100 million cubic feet of gas per day (mmcfd) to the textile industry in Punjab, said All Pakistan Textile Mills Association (Aptma) Punjab Chairman S M Tanveer. 

In previous years, the Punjab-based textile industry would have had no option but to lay off workers during three months of winter due to suspension of gas supply. 

Praising the decision of the federal government, Tanveer said each and every worker of the textile industry was acknowledging the support given by the prime minister and the chief minister of Punjab. 

The government has decided to divert 85 mmcfd of gas to industrial units from independent power producers (IPP) in order to enable the textile industry to capitalise on the advantages from the recently granted GSP Plus status by the European Union. He said the Aptma leadership has held detailed meetings with Sui Northern Gas Pipelines Limited (SNGPL) to chalk out a strategy for gas supply to the textile mills in the next 90 days. 

Tanveer said uninterrupted gas supply would help increase textile exports by $1 billion every month. This huge inflow of foreign exchange would stabilise the Pakistani rupee in line with the announcement of Federal Finance Minister Ishaq Dar, he said. 

Products diversification a must to benefit from GSP plus   [ top ]

The Nation, December 13, 2013
LAHORE - Pakistan’s major industrial bodies, trade associations and almost all important government figures on Thursday congratulated the government for getting GSP Plus status from European parliament and hoped that the government would facilitate the export-oriented industries to fulfill all the foreign orders.

The Lahore Chamber of Commerce and Industry, Pakistan Readymade Garments Manufacturers and Exporters Association, All Pakistan Textile Mills Association, Federation of Chambers of Commerce and Industry, Pakistan Industrial and Traders Associations Front and All Pakistan Business Forum welcomed European Parliament decision.

Punjab Chief Minister Shahbaz Sharif said that granting of GSP Plus status to Pakistan is a good omen. He said that the facility of GSP Plus will enhance exports of Pakistan and the national economy will be strengthened due to increase in trade activities. The Chief Minister said that due to the status of GSP Plus, trade relations of Pakistan with European countries will further strengthen. He congratulated those who made efforts for achieving Pakistan GSP Plus status for Pakistan.

Federal Secretary, Ministry of Commerce and Textile Industry, Rukhsana Shah observed that the value-added textile industry, which is very important in terms of export as well as employment generation, needs to offer more diversified products to benefit from the GSP plus. 

Addressing the PRMGEA Managing Committee Secretary Textile Industry Division assured Pakistan Readymade Garments Manufacturers and Exporters Association of having separate Statutory Regulatory Orders (SROs) for readymade garments industry very soon. Rukhsana Shah said the development of synergies between local and international textile sectors is crucial for Pakistan to get advantage from the generalized system of preferences status.

PRGMEA Senior Vice Chairman Jawwad A. Chaudhary said that the EU move to grant duty free market access to Pakistan would help give considerable boost to exports and create new jobs in the country.

Jawwad, however, demanded the liberal import policy for raw materials for re-export like duty-free import of fabrics and accessories same as Bangladesh, besides simplifying MINTEX Registration procedure. “We suggest the government to make it mandatory that all export invoices be attested and recorded by the Associations before Customs. This way all export commodities will be recorded in respective HS Code and export data will be compiled appropriately.” 

The Lahore Chamber of Commerce and Industry welcomed European Parliament decision to grant duty free market access to Pakistan that would help give boost to exports and create new jobs in the country. LCCI Acting President Mian Tariq Misbah said that approval of GSP Plus status to Pakistan by European Parliament has proved all international conventions relating to human and labor rights, environment and good governance have been implemented by the Pakistan to the satisfaction of the European Parliament.

APTMA Punjab chairman SM Tanvir said that exporters from various industries in Pakistan were anxiously hoping for access to European markets, which promises huge potential for multiplying the country’s current exports.

PIAF Chairman Malik Tahir Javaid said that the GSP Plus status would not only help expansion in existing businesses but would also encourage foreign businessmen to put their money in new ventures in Pakistan.

He said that the boost to the manufacturing sector would also create new jobs that would definitely help bring down the graph of unemployment that was going up with every passing day.

The business community, meanwhile, urged the government to ensure uninterrupted supply of gas and electricity to the industry to enable it to fulfill foreign orders after January 1, 2014 when the status would be implemented.