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How will Pak-Turkey trade ties be bolstered?
By Ghulam Abbas
Pakistan and Turkey reviewed the proposed Preferential Economic Agreement (PTA) in products on Thursday in order to promote trade liberalisation and bilateral trade. According to a statement issued by the Ministry of Commerce, both parties stressed the necessity of completing the PTA in goods as soon as possible since it would open up new chances to expand bilateral trade across all sectors and would be mutually beneficial. During the last 25 years the exports of Pakistan to Turkey have increased at an annualised rate of 4.01%, from $148M in 1995 to $394M in 2020. In 2020, Turkey exported $630M to Pakistan. The main products that Turkey exported to Pakistan were Hot-Rolled Iron ($53.5M), Compasses ($38.5M), and Non-Retail Pure Cotton Yarn ($36.1M). During the last 25 years the exports of Turkey to Pakistan have increased at an annualised rate of 8.11%, from $89.8M in 1995 to $630M in 2020. In 2020, Turkey did not export any services to Pakistan.
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In 2020, Pakistan exported $394M to Turkey. The main products that Pakistan exported to Turkey are Electric Generating Sets ($92M), Heavy Pure Woven Cotton ($79.7M), and Non-Retail Pure Cotton Yarn ($31.9M). During the last 25 years the exports of Pakistan to Turkey have increased at an annualised rate of 4.01%, from $148M in 1995 to $394M in 2020. In 2020, Pakistan did not export any services to Turkey.
In 2020, Pakistan ranked 93 in the Economic Complexity Index (ECI -0.71), and 65 in total exports ($25.5B). That same year, Turkey ranked 38 in the Economic Complexity Index (ECI 0.58), and 29 in total exports ($177B).
Speaking with Pakistani and Turkish business persons, Commerce Minister Syed Naveed underlined the importance of increasing business-to-business interactions in order to develop trade and investment links between the fraternal countries of Pakistan and Turkey.
During Prime Minister Muhammad Shehbaz Sharif’s visit to Turkey, the Ministry of Commerce co-hosted a business-to-business meeting attended by about 150 Pakistani and
The delegation of Pakistani business people, assembled by the Ministry of Commerce and Trade Development Authority of Pakistan, represents sectors with significant export potential to Turkey, including engineering, agro-food, pharmaceuticals, rice, information technology (IT), textiles, and others. Syed Naveed Qamar, Federal Minister for Commerce, who is accompanying the Prime Minister, also met with his Turkish counterpart, Dr. Mehmet Mus, Minister of Commerce, and discussed how to improve bilateral trade.
The petrol price hike - necessary if painful
The federal government has decided to raise the price of petrol by another Rs30, taking it to its highest ever Rs209 per litre, to meet the International Monetary Fund (IMF) demands. The federal finance minister Miftah Ismail on Thursday night announced that the federal government has decided to raise the prices of petroleum besides ending the tax amnesty for the construction sector announced by the last PTI government.
The new price of petrol, after the latest hike, will be at Rs209.86, diesel at Rs204.15, kerosene oil at Rs181.94 and light diesel at Rs178.31, he announced and the new prices will come into effect from midnight tonight. The Finance minister said that the government is still facing a loss of around Rs9 in petrol despite a hike of Rs30 as we are not collecting any tax on the fuel.
He said that the government will reach an agreement with the IMF in June and we are making negotiations with the lender on a daily basis. The IMF had demanded to withdraw subsidies on petrol and electricity, he added. Miftah also said that the government will have to end the subsidies announced by the last government, however he claimed that the government will not impose any new tax in next year’s budget.
Miftah also said that the PTI government took huge loans in the last four years comparable to loans taken by successive governments in the last 71 years. He also said that the government will not increase tax on salaried classes in the next budget. The finance minister said that Pakistan has also requested the IMF for extension in the program.
According to him, the lender is agreed as Pakistan will start repaying the IMF loan from next year so it’s important to us to be in the program. In one question, he said that the one month expenditure of the government is Rs 40 billion and if we minimised the expenditure then we can reduce just Rs4 billion. He again reiterated that the government will not impose any new tax in June and the government of Pakistan cannot sell the petrol at a loss.
The finance minister said that Hammad Azhar wrote a letter to Russia and when Imran Khan returned back to Pakistan they wrote a letter asking for gas as well as wheat on discount but the Russian never replied so far. Pakistan would be open to buy Russian oil at cheaper rates if the opportunity arises, provided that no sanctions are imposed because of the deal, he maintained. n
Real estate sector demands provincial govt step up
By Shahzad Paracha
Pakistan’s Real Estate sector has asked the government to transfer the decision of determination of Property Valuation from federal to provincial governments. Pakistan’s Real Estate sector in its budget proposals for the next fiscal year asked the federal finance minister to exclude Section 68(4) of Income Tax Ordinance 2001 immediately besides Property Valuation should only be done by Provincial Govt who are already practising it and capable of doing it as they already have Field Force Revenue Department. Similarly, the provincial government is charging Stamp Duty according to their DC Rates and It is suggested that the Federal government should also charge Gain Tax/Advance Tax according to their DC Rates. Meanwhile, Property Valuation should only be done every year and once in a financial year. The real estate also in its recommendations stated that presently Filer is paying 1% and Non-Filer is paying 2% advance income tax on the purchase of the property. It is suggested that this tax should be reduced to 0.25% for ‘Filer’ and for non-filer it should remain 2% because the advance tax can be claimed in a tax return by ‘Filer’, it will be helpful to increase the economic activity in the country.
Capital Gain Tax-(236-C) For Immovable Property Presently Sellers (Filer) are paying 1% gain tax at the time of transferring
the property and 2% by the ‘Non-Filers’ it is suggested that for ‘Filer’ it should be reduced to .25% (point Two Five Percent) and for non-filer, it should remain 2% (Two Percent). Capital Gain Tax- For Immovable Property The maximum period for determining gain tax may be fixed at 3 years instead of 4 years, with a 5% (Five Percent) flat rate.
Reduction in the maximum period for determining Gain tax to 3 years with 5% (Five Percent) will enhance the Sale/Purchase activity and boost the economy. Real Estate Regulatory Authority RERA The government has passed Real Estate Regulatory Authority (RERA) bill 2020 from National Assembly and Senate for Capital Territory (ICT) only, but still not implemented. If it is implemented then at least 70 to 80% of issues in the Real Estate Sector will be settled.
There is a dire need for the formulation of RIM and its proper implementation just on the lines of other developed countries. Such a step by the government will facilitate removing different hurdles in the Real Estate Sector.
Special Relief Package For Real Estate Sector It is suggested that strong measures/ announcements from the Prime Minister should be made to further boost the prevailing Real Estate Sector. In this regard, Membership fee, Transfer fee, and Possession/Site Plan charges must be reduced at least 50%. The government should legalise the Two Percent (2%) service charges (Commission) on the Sale/purchase transactions from each side and One (1) Month Rent on Lease/ Rental deals from each side by ordering all registration/Mutation/Transferring Authorities and Societies. It is strongly emphasised that keeping these considerations while finalising the Federal Budget 2022-23 for the Real Estate Sector. n
MoIP set to tackle ‘on-money’ problem
By Ghulam Abbas
The Senate Standing Committee on Industries and Productions has directed the concerned ministry to take solid measures against the illegal business in the auto industry known as premium or On-Money.
The Senate Committee on Industries and Production met on Friday under the chairpersonship of Senator Khalida Ateeb here at the Parliament Lodges to take briefing on the role and functions of the Engineering Development Board with particular references to the aims and objectives of its establishment as delineated on its terms of reference.
The committee which met here on Friday was informed by the Engineering Development Board (EDB) on the question of own money on car bookings and purchase raised by Senator Dr. Asif Kirmani that in case of failure in the delivery of car within 60 days of the booking, the purchaser can claim back the own money payment as well as can impose a 3 percent plus Kibor fine.
It was further informed that the purchaser has to pay only 20 pc of the total price of the car at the time of booking. On the point of standardisation and quality of production and parts of the auto-mobiles the committee was informed that the accessories of Honda Company are locally manufactured affecting the quality of products. It was further informed that the EDB has no role to play as a regulator or in the standardisation of Production.
The Pakistan Standards & Quality Control Authority (PSQCA) which is an autonomous body subordinate to the Ministry of Science and Technology has the mandate to regulate and enforce quality standards in Pakistan. The committee also showed concern over the procedure through which a car is cleared for road test and also inquired whether or not the procedure is counter checked by another authority other than the company itself.
The committee also raised questions from the EDB on the delayed delivery time of the automobiles. During the meeting the officials of EDB while giving briefing to the committee apprised that the EDB was established in 1995. The Federal Cabinet re-constituted the Board of Management (BoM) of EDB in Feb 2019 which has 06 members from Government and 12 Twelve private members representing leading engineering sectors.
The committee was briefed on some of the policy and regulatory functions it performs including, secretariat automotive Industry Development and export Committee (AIDEC) under AIDEP 2021-26, secretariat for the Mobile Device Manufacturing Policy and focal point for engineering industry inputs for annual Budget and Competitiveness exercise ( Tariff and Taxes Rationalization ). It was also informed that in addition to a policy formulation role, EDB is the lead organization for implementation of various government regulations for industry facilitation, including determination of price preference to be accorded, under import of engineering Goods (Control) Order, 2001.
The EDB officials further apprised the committee that the importance of the role assigned to EDB can be gauged from the fact that the engineering industry is the largest sector of trade in the world. In 2020, out of total global trade of $17.3 trillion, 56 percent or $9.7 trillion was of engineering goods. It was further informed that Auto Development Policy was successfully concluded in June 2021 in which 21 companies were awarded Greenfield status, whereas under the Mobile device Development Policy approved in June 2020, 31 licenses have been issued by PTA in 2020-21 and major internationals companies like Samsung, Nokia, VIVO OPPO, XIAomi, Tecno , infinix etc have invested and started local manufacturing /assembly In Pakistan.
Local assembly of mobiles reached to about 24.66 million during 2021 and commercial imports of CBU units are decreasing rapidly. The committee was also apprised of the Auto Industry Development and Export Policy (AIDEP 2021-26) which gave incentives to the auto sector under Auto Industry Development and Export Policy (AIDEP 2021-26). It was informed that all taxes are removed on locally manufactured cars up to 1000cc (meri gari scheme). The prices of locally manufactured cars have also been brought down (above 1000 cc) through reduction of FED by 2.5 percent on each category of cars /SUVs /LCVs.
The meeting was attended by Senators Fida Muhammad, Hidayat Ullah, Dr. Asif Kirmani, Mohammad Abdul Qadir, and Senator Shaheed Khalid Butt. Secretary Ministry of Industries and Production, CEO Engineering Development Board and other senior officers were also in attendance. n
