Exporters, businessmen jubilant after government’s reforms package

Federal Minister for Finance, Revenue and Economic Affairs Asad Umar is addressing the National Assembly of Pakistan on Wednesday. (Photo credit: PID)
Updated 24 January 2019

Exporters, businessmen jubilant after government’s reforms package

  • Promissory notes to solve liquidity problem of export-oriented industry
  • Positive impact of tax incentives on industry will take some time

ISLAMABAD: Exporters and businessmen on Thursday expressed optimism that the new tax incentives introduced in the mini-budget for industry, stock market and agricultural sector would lead to the revival of the economy and boost exports.
Finance Minister Asad Umar on Wednesday presented the third finance bill for the current fiscal year in the National Assembly of Pakistan, claiming it would boost investment, manufacturing and exports, and facilitate agricultural financing to promote economic activities in the country.
Reacting to the incentives introduced in the budget, Chairman Pakistan Apparel Forum, Javed Balwani, said that the liquidity problem of the export-oriented industry will be addressed if the government – as promised in the mini-budget —   issues them promissory notes as a refund for withholding tax amounting to around Rs200 billion.
“This is for the first time in a decade that a government has promised to clear all our outstanding dues in one go. This is going to be a major relief to the industry,” he told Arab News.
Balwani said the promissory notes and abolition of withholding tax on banking transactions would help revive the economy and boost exports. He also hailed the government for allocating separate electricity and gas tariffs for the industry.
Stockbrokers said the new incentives and reduction in different taxes would contribute toward ease of doing business.
“We accentuate that with this budget, the government has underpinned support for the domestic industry, incentivize export-oriented sectors to boost trade and improve ease of doing business in the country,” Head of Research Arif Habib Limited Samiullah Tariq told Arab News.
“Proposals put forth by the broker community have also been accepted and steps would now be put in place to improve sentiment and encourage volumes at the index,” he said.
“The removal of 0.02 percent advance tax on the sale and purchase of shares, collected from brokerages, will increase trading activities in the market,” he added.
Ahmed Hassan Moughal, President Islamabad Chamber of Commerce and Industry, said that the tax reduction on agricultural sectors and Small Medium Enterprises (SMEs) is expected to revolutionize the economy as both of them are considered to be the backbone of the financial system.
“Basically the government has introduced major reforms in the taxation system to fix the past anomalies, but it will take some time to see overall positive impact of all these measures on the industry and exports,” he told Arab News.
On Wednesday, the finance minister also announced that he would present the “Medium Term Economic Framework” in parliament next week to boost investment, manufacturing and agricultural produce in the country.
“We are committed to helping the deprived segment of the society and it is our constitutional responsibility to bridge the gap between the rich and the poor,” he said.
Umar said that his government had identified four variables to fix Pakistan’s ailing economy. These included: balancing government’s revenues and expenses; increasing exports that recently plummeted from 14 percent of the GDP to seven percent; encouraging foreign direct investment; and boosting national savings from 10.4 percent which, he added, were the lowest in the world.
To achieve all these targets, he announced plans to slash tax on SMEs and agricultural loans from 39 percent to 20 percent, abolish withholding tax on banking transactions for tax filers, and remove import duty on newsprint.
He said that duty on diesel engines for agricultural purposes was also decreased to five percent. Other than that, abolition of the Gas Infrastructure Development Cess on fertilizers would help reduce prices of urea for 200 rupees per bag.
Following the approval of the Finance Supplementary (second amendment) Bill 2019, non-tax filers will be able to purchase cars up to 1300cc, though the tax will be increased for them.
The minister announced plans to abolish super tax for non-banking companies and on bids for sports franchises until profitability, while withholding tax on trading in the stock exchange, he said, had also been abolished.

Pakistan says in touch with 150,000 nationals in virus-hit Italy

Updated 21 March 2020

Pakistan says in touch with 150,000 nationals in virus-hit Italy

  • Says diplomatic mission in Italy is in touch with the nationals, 2,000 of whom are students
  • Italy has so far reported more than 3,400 deaths, including one Pakistani

ISLAMABAD: Italy is home to about 150,000 Pakistani nationals, concentrated mostly in the the country’s north — Lombardy region with Milan as its capital, the Foreign Office (FO) said on Thursday.

 “Our Embassy in Rome and Consulate General in Milan are in constant contact with the Pakistani community,” FO spokesman Aisha Farooqui, said in an official handout.
The statement comes at a time when the death toll in Italy from the deadly virus has surpassed that of China.
“The Embassy as well as Consulate General had set up 24/7 help lines to provide services and information to the Community at the start of the outbreak.” Farooqui said.

Pakistani diplomats are also coordinating with education institutes across Italy where nearly 2,000 students from the South Asian country are currently enrolled, the statement read.

The death of first Pakistani national, Imtiaz Ahmed, from the contagion was also reported in Italy on March 11. With a population of 60 million, the European country has so far reported more than 3,400 deaths.

According to media reports, a visiting Chinese Red Cross team slammed Italy for not taking the quarantine requirements seriously, making it difficult for health authorities in the country to limit the spread of the virus.

Given that China has reportedly managed the viral outbreak, Italy has seemingly emerged as COVID-19’s new global epicenter.

Meanwhile, the total number of confirmed coronavirus cases in Pakistan jumped beyond 440 on Thursday after a sharp spike in numbers in Sindh and Balochistan.