ECONOMIC TIMES OF PAKISTAN
Pakistan lacks a consolidated system
Pakistan lacks a consolidated system for recording and reporting its debt and there is also no mechanism to regulate public assets that results in discrepancies and non-reconciliation of hundreds of billions of rupees worth of funds.
The final draft report of the Public Expenditure and Financial Accountability Assessment (PEFA) 2019 of the World Bank has pointed out glaring deficiencies in the management of government assets and liabilities.
These findings are tantamount to charge-sheeting the Ministry of Finance. The report covers three fiscal years from 2015-16 to 2017-18 but the bureaucrats responsible for executing these functions still occupy their positions in the Ministry of Finance. The problems that have been identified in the report also remain largely unaddressed.
The World Bank draft report showed that Pakistan performed poorly on the pillar of management of assets and liabilities. Four critical indicators fall under this pillar. These are fiscal risk reporting where the country got B grade, public investment management (D plus), public asset management (D) and debt management (B plus).
[divider style=”normal” top=”20″ bottom=”20″]
Govt probable to abolish deemed duty on diesel
The government is likely to scrap deemed duty on the sale of high-speed diesel and introduce refinery margins for oil refineries in the new proposed Pakistan Oil Refining and Marketing Policy 2019.
The government is working on the new policy under which some changes are being proposed in arrangements for the refineries.
At present, the oil refineries are collecting deemed duty on the sale of high-speed diesel (HSD) to consumers. The duty was introduced in 2002 when the refineries were asked to upgrade their plants by utilising the collection. However, the refineries are still unable to compete with counterparts around the world.
“Current deemed duty of 7.5percent on high-speed diesel may be discontinued and instead refinery margins may be introduced. Fifty percent of OMC (oil marketing company) margins on HSD and motor spirit (petrol) are being worked out on the basis of annual Consumer Price Index (CPI) reading,” a senior government official told.
[divider style=”normal” top=”20″ bottom=”20″]
[divider style=”normal” top=”20″ bottom=”20″]
United States assures Pakistan of softening travel advisory
The United States has assured Pakistan that it will soften its travel advisory, enabling Islamabad to attract foreign investors. A travel advisory is a formal warning issued by a government or international organisation, which advises caution to travellers going to specified countries due to various reasons.
The US had imposed the travel advisory, which is hurting the economy of Pakistan.
Talking to journalists on Friday, Adviser to PM on Commerce Abdul Razak Dawood said the US was going to soften the travel advisory on Pakistan. “I have discussed this matter with my counterpart during the US visit and he has assured me that they will look into this matter,” the PM’s close aide said, adding, “I came to know that they are going to be soft on this issue.”
Dawood said if the US withdrew its travel advisory, then Pakistan would be able to initiate business activities with America. Pakistan had requested the US to make investment in the country, especially in food technology, as there were vast opportunities in the sector, he said.
He revealed that both the countries had agreed to hold a meeting on the Trade and Investment Framework this year to explore business opportunities in Pakistan.
He said the Pakistani side requested them to give market access for textile and leather products as textile was not included in the Generalised Scheme of Preferences (GSP) facility, which America had granted to Pakistan.
[divider style=”normal” top=”20″ bottom=”20″]
Sindh government poised to invite bids for Dhabeji Sez
The Sindh government is all set to invite developers to participate in competitive bidding for the Dhabeji Special Economic Zone (SEZ).
“Sindh government has completed all the homework for inviting private investors to work on one of the three SEZs of the country, which will be operational in the near future,” said Sindh Economic Zones Management Company (SEZMC) CEO Abdul Azeem Uqaili.
In 2012, the federal government passed the Special Economic Zones Act according to which nine SEZs had to be built across Pakistan.
The government had incentivised these SEZs by giving income tax holidays for 10 years to the companies which set up units in the area. Moreover, it had also allowed duty-free import of machinery for installation in plants of the companies established in the SEZs.
[divider style=”normal” top=”20″ bottom=”20″]
Pakistan, Germany ink €22.4mn agreement
Pakistan and Germany on Friday signed an agreement under the Pakistan-Germany Development Programme for financial assistance of €22.4 million for existing projects of renewable energy, better grid connections and improved access to financial services through the microfinance initiative of the Pakistan Microfinance Investment Company (PMIC).
Economic Affairs Division Secretary Noor Ahmed and German Embassy Charge d’Affaires Dr Jens Jokisch signed the agreement. Federal Minister for Economic Affairs Hammad Azhar was present at the ceremony.
The agreement included support for social health protection schemes in Khyber-Pakhtunkhwa and Gilgit-Baltistan by providing health insurance to underprivileged people and investment in polio eradication in collaboration with the Ministry of National Health Services, Regulation and Coordination.
[ads1]
According to a statement issued by the Economic Affairs Division, the development cooperation between Pakistan and Germany dated back to 1961 with total financing to date amounting to more than €3 billion.
The two sides looked forward to strengthening cooperation and having meaningful deliberations in forthcoming government-to-government negotiations in Berlin in order to commit funds to future projects and proposals.
Speaking on the occasion, Azhar thanked the German government for the grant assistance geared towards betterment of people in Pakistan.
He was of the opinion that the financial assistance would support key priority sectors of the economy like renewable energy, social health protection and access to financial services.
[divider style=”normal” top=”20″ bottom=”20″]
Pakistan’s budget has lost credibility: WB
Pakistan’s budget has further lost its credibility and the public finance management system has also deteriorated, according to a draft report of the World Bank (WB) that has downgraded the country’s ranking on almost all 31 fiscal management-related indicators.
The Washington-based lender shared the final draft of the Public Expenditure and Financial Accountability (PEFA) report with the Ministry of Finance in June. The report carries an objective assessment of Pakistan’s public finance management system and its budgets from fiscal year 2015-16 to 2017-18.
But the findings reflect extremely poor performance of the Ministry of Finance that failed to carry out its responsibility and let the fiscal rules violated.
[divider style=”normal” top=”20″ bottom=”20″]
Sindh govt imposes 19.5pc sales tax on internet
Internet and broadband services, which are considered basic necessities and the backbone of developed economies worldwide, are going to become expensive in Sindh as the provincial government has slapped sales tax on them.
“The Sindh Revenue Board has withdrawn the exemption of sales tax on services from internet and/or broadband services with effect from July 1, 2019,” said a notification of the Sindh Revenue Board (SRB).
The notice has informed service providers that from July 1, all internet and broadband customers, irrespective of their speed or charges, will pay sales tax at the statutory rate of 19.5percent.
“Internet and broadband services of up to 2 mbps speed and 4 mbps speed, the charges for which did not exceed Rs1,500 per month and Rs2,500 per month respectively, were exempt from sales tax, the said exemption has been withdrawn with effect from July 1, 2019,” added the notice.
The notice pointed out that in 2011, the internet and broadband services were given exemption from sales tax while in 2013 and 2016, notifications were issued for the imposition of partial sales tax on digital services.
When the SRB was contacted, an official on condition of anonymity said sales tax on internet and broadband services had already been imposed in Punjab, K-P and Balochistan at the rate of 19.5percent and the same rate was applied in Sindh.
[divider style=”normal” top=”20″ bottom=”20″]
[divider style=”normal” top=”20″ bottom=”20″]
PKR weakens against $
The rupee weakened against the dollar at Rs160.3/160.8 in the inter-bank market on Friday compared with Thursday’s close of Rs160.25/160.75, according to forex.pk. Earlier, the SBP let the rupee depreciate massively in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12. The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar and other major world currencies. Also, the World Bank, which finances some of the infrastructure and social safety net projects in Pakistan, has supported the idea of leaving the rupee free from state control in a bid to give much-needed boost to exports and fix a faltering economy.
[divider style=”normal” top=”20″ bottom=”20″]
BOI welcomes $20mn investment
Board of Investment (BOI) Chairman and State Minister for Investment Zubair Gilani on Friday welcomed the $20-million investment for the services sector of Pakistan. “BOI is committed to supporting foreign investment and providing facilities to foreign investors through the ease of doing business,” he said while meeting Donald Li, Chief Executive Officer of integrated services company – Timesaco. The minister for state vowed to provide all possible facilities to the information technology sector and said the sector had a huge potential and in future it would be the largest economic field in Pakistan. He offered full support to the foreign investment and hailed efforts of the integrated services company for introducing a new taxi service ‘Buraq’, besides five other services. On the occasion, Donald Li said the company was establishing an e-services platform in Pakistan. He said Timesaco offered five different services in Pakistan including the taxi service, instant delivery service Fema and city freight service Cargo+. Initially, these services were available in six big urban centres including Karachi, Lahore, Faisalabad, Rawalpindi, Islamabad and Peshawar, he added.