FBR REFUNDS RS5BN TO TRADER IN ONE MONTH INSTEAD OF SCHEDULED 10 YEARS
Malik Asad Updated 04 Jun, 2020
ISLAMABAD: The Federal Board of Revenue (FBR) refunded Rs5 billion to a trader in connection with export of food items, including nuts and sweets, during the last financial year.
Mohammad Ibrahim Khan, a member of the Public Accounts Committee from the ruling Pakistan Tehreek-i-Insaf (PTI), raised the issue during a meeting of the PAC held in the Parliament House on Wednesday.
Mr Khan said the FBR refunded the huge amount to Usman Trade Linker, Multan. He said the trader was not well-known and had been living in a five-marla house in Multan.
He said the money was to be paid over a period of 10 years, but the payment was made in a single month.
PAC told that trader belonging to Multan lives in a five-marla house
Mr Khan said an audit para was raised on this refund last year and the matter was referred to the Regional Tax Office, Multan Zone, but its reply was still awaited.
He also handed over a letter related to the refund to the committee.
PAC chairman Rana Tanvir Hussain referred the matter to the auditor general of Pakistan and directed him to take it up with the FBR and submit a report to the committee next month.
Another PAC member Noor Alam Khan of the PTI shared a development with the committee related to the purchase of a luxury vehicle for official use by the Oil and Gas Development Company Limited (OGDCL).
He said the government had imposed a ban on the purchase of luxury vehicles for official use. However, the incumbent OGDCL managing director purchased a Toyota Camry for Rs12 million disregarding the ban.
The PAC referred the matter to the auditor general.
The committee also examined the audit paras related to the alleged irregular award of contracts, overpayments and price escalation of different closed and ongoing projects of the National Highway Authority.
The PAC took up a matter related to functioning of its 18 subcommittees. The PAC was told that because of Covid-19 these subcommittees have become dormant. It was decided to hold meetings of the main PAC and its subcommittees on regular intervals.
The auditor general office was asked to expedite its functioning, especially convening the departmental accounts committee well before the PAC meeting.
The committee decided to continue meeting during the National Assembly session while observing all precautionary measures to avoid Covid-19.
Published in Dawn, June 4th, 2020
EXPORTS REGISTER MASSIVE DECLINE
Abdul Rasheed Azad Updated 13 Jun, 2020
ISLAMABAD: The country’s exports on year-on-year (YoY) basis have witnessed a decline of 33.64 percent, from $2.096 billion to $1.4 billion during May 2019-2020, the Pakistan Bureau of Statistic (PBS) said.
According to the PBS, the country’s imports during the period also witnessed a decline of 43.17 percent, from $5.017 billion to $2.85 billion.
The country’s balance of trade during on annual basis witnessed an improvement of 50.02 percent, from $2.92 billion to $1.46 billion, the PBS said.
On quarterly basis, from July-May 2019-20, Pakistan’s exports witnessed a decline of 6.87 percent, from $21.26 billion in July-May 2018-2019 to $19.8 billion in July-May 2019-2020.
The imports of the country on quarterly basis witnessed a decline of 18.96 percent during July-May 2019-2020 against the same period of the past financial year from $50.4 billion in July-April 2018-2019 to $40.85 during July-May 2019-2020.
The balance of trade on quarterly basis improved by 27.77 percent from $29.154 billion in July-May 2018-2019 to $21.058 billion in July-May 2019-2020.
On month-on-month (MoM) basis, the country’s exports witnessed an increase of 45.35 percent from $957 million in April 2020 to $ 1.4 billion in May 2020, the PBS added.
While on MoM basis, the imports of the country went down by 11.02 percent, from $3.204 billion in April 2020 to $2.85 billion in May 2020.
The country’s balance of trade on monthly basis, improved by 35.02 percent, from $2.25 billion in April 2020 to $1.46 billion in May 2020, the PBS said.
Copyright Business Recorder, 2020
ASTRAZENECA CONTACTED GILEAD OVER POTENTIAL MEGAMERGER
08 Jun, 2020
LONDON: Britain’s AstraZeneca has approached US rival Gilead Sciences about a possible merger to form one the world’s largest drug companies, Bloomberg News reported on Sunday, citing people familiar with the matter.
Such a deal would unite two of the drugmakers at the forefront of the industry’s efforts to fight the new coronavirus and could be politically sensitive as governments seek control over potential vaccines or treatments.
AstraZeneca contacted Gilead last month, but its US rival was not interested in combining with another big pharmaceuticals company, the Bloomberg report https://bloom.bg/3h2GU9e said.
A spokeswoman for AstraZeneca said the company does not comment on rumours or speculation.
Gilead, the world’s largest maker of HIV drugs, declined to comment on the report.
If combined, the two companies would have a market capitalisation of about $232 billion, based on Friday’s closing share prices.
That would exceed Merck & Co and Pfizer at $207 billion and $200 billion respectively.
Two sources familiar with AstraZeneca’s thinking questioned the rationale of a tie-up, telling Reuters that Gilead’s remdesivir drug for COVID-19 patients was insufficient to justify pursuing a multibillion-dollar deal that would detract from AstraZeneca’s work on a coronavirus vaccine.
One of the sources questioned the timing. Given the potential impact a successful vaccine would have on AstraZeneca’s share price, it does not need the additional strain of pursuing a record-breaking deal, especially when travel constraints make face-to-face meetings difficult.
While Gilead may look cheap with its price-to-earnings ratio of 12 times and AstraZeneca may be attracted by the potential cost-cutting and decent free cashflow, Jefferies analysts said they do not view a deal as likely.
“We think Gilead believes its HIV business is very underappreciated,” they said in a note, adding that the company “would prefer to build value over time and do its own tuck-in deals”.
Gilead’s biggest blockbuster drug is HIV drug Biktarvy, with sales of $1.69 billion in the first quarter.
AstraZeneca’s top-selling product is its lung cancer drug Tagrisso, which generated first-quarter revenue of $982 million.
Both companies’ shares have jumped this year as the healthcare sector has drawn fresh investor interest as drugmakers race to develop treatments and vaccines to counter the pandemic.
AstraZeneca’s shares hit record highs in late April while Gilead’s stock is up 20% since the start of the year.
Gilead, AstraZeneca and other drugmakers, including Eli Lilly and Co, Pfizer and Merck & Co, are racing to develop vaccines or treatments for COVID-19, the respiratory illness caused by the novel coronavirus.
More than 6.9 million people have been reported infected with the coronavirus globally and 399,025 have died, a Reuters tally showed on Sunday.
It is unclear whether a vaccine will work, but AstraZeneca’s partnership with Oxford University to develop one is among a handful of initiatives US President Donald Trump’s COVID task force has backed.
Copyright Reuters, 2020
TRADERS, EXPORTERS TERM BUDGET DISAPPOINTING, MERE LIP SERVICE
Recorder Report 13 Jun, 2020
KARACHI: Traders and exporters on Friday dubbed the federal budget 2020-21, ‘disappointing’ for the lockdown affected businesses, saying that “it [budget] will follow more budgets this fiscal year”.
Calling the budget discourse a ‘lip service’, traders reacted that the country’s next financial plan widely ignored the traders who are in ‘deep’ recession from Covid-19 lockdown, for economic relief. “No financial package for small traders and the cottage industry,” All Pakistan Organization of Small Traders and Cottage Industry president Mehmood Hamid termed the fiscal plan as ‘fruitless’.
Reacting to the budget propositions, he said the government has also failed to understand the problems of small traders and cottage industry as the lockdown poured in economic troubles for them ‘unprecedentedly’. “This is not a budget. Original budgets will come later,” he opined.
However, he lauded the PTI government for increasing the slab of turnover tax from Rs 50, 000 to Rs 100,000, saying that the finance ministry should also abolish the condition of identity card for traders on their turnover tax. Mehmood Hamid said the government, although did not add new taxes to the budget, increased the taxation target, which it will try to meet at any cost.
He expressed concerns over the proposed budgetary subsidy for K-Electric, which is a private power supply entity, and called the proposition as ‘usurp’ of public wealth. He urged the government to complete the Green Line project on M.A. Jinnah Road, which not only disturbed the public commuting but also affected trade and businesses. He also sought Rs200 billions of development package for Karachi.
“Benefits of fuel oil price slump on the world market should be extended to the industries,” Council of All Pakistan Textile Associations chairman Zubair Motiwala reacted to the budget 2020-21, saying that the financial plan has to play a role to reduce the cost of production, which is very ‘important’. He said “No propositions are seen in the budget to focus on reducing the cost of industrial output,” he showed sorry.
Motiwala said the cost of industrial production should be reduced by 40 percent if the government wants jobs and better output from the industrial sector. Similarly, he said, the budget also failed to seek a reduction in unemployment. However, he appreciated the government for scaling down duty on the import of raw material and industrial machinery.
“This budget is disappointing for the export sectors,” Pakistan Apparel Forum’s Muhammad Javed Bilwani said while reacting to the new financial plan 2020-21, saying that the government unheard several of the proposals the textile apparel sector had set forth for the budget. “The exports sectors really demanded of the government to restore zero-rating status,” that was also shrugged off. He said that if the government could not restore the zero-rating status to the exports sectors then it should have reduced the sales tax to four percent at least.
“Absolutely, ridiculous budget with a reference to the textile and overall manufacturing sectors,” leading textile exporter, Fawad Anwer of Alkaram Textile said, adding that the growing issues from Covid-19, the country’s textile exports will collapse under the 17 percent sales tax burden. “No systems in place for a refund whatsoever,” he said.
“Energy cost is not sustainable,” to support the industrial growth, he said, adding that the companies under huge financial losses from Covid-19 will have to pay turnover tax as well. “This will result in a lot of companies going bankrupt,” he said, adding that the making of tax target achievable without stimulus will remain ‘impossible’. He was of the view that the budget 2020-21 will only benefit the construction sector of the country.
Copyright Business Recorder, 2020
CHINA BANS SOME US CHICKEN, SHUTS PEPSI PLANT TO FIGHT VIRUS
BEIJING: China banned imports from a top US poultry producer and ordered a Beijing Pepsi factory to close on Sunday as authorities clamped down on food production and distribution amid a new coronavirus cluster in the capital.
Health officials also reported 22 new virus cases in Beijing, where they have tested more than two million residents as they seek to contain a wave of new infections linked to a wholesale market in the capital.
Imports of frozen chicken from Tyson Foods have been `temporarily suspended`, the GeneralAdministration of Customs said, after a virus outbreak was found at one of the company`s production facilities in the US.
Products from the firm that have already arrived in China will be confiscated, the statement said.
US food and drinks giant PepsiCo was also ordered to shut down one of its snack-making plants in Beijing after several employees tested positive, company spokeswoman Fan Zhimin said.
She added that 87 close contacts had been traced and quarantined.
More than 220 people have so far tested positive from the newBeijing clusters that have been traced to chopping boards used to handle imported salmon at the city`s Xinfadi market.
The marl(et supplies more than 70 percent of Beijing`s fresh produce and has been closed, with officials on Friday advising citizens to dispose of frozen seafood andbeanproductsboughtthere.
Officials on Friday also announced a nationwide campaign toinspect allfreshproducts coming from `high-risk countries` following reports of new virus clusters at plants in Germany and the US.
Authorities are targeting thosewho work in restaurants, supermarkets, markets and food delivery couriers for testing, according to Gao Xiaojun of the Beijing Municipal Helth Commission.
Dozens of communities have also been sealed offin the city to contain the spread, with residents told to avoid non-essential travel and schools closed.
Authorities are conducting tests in batches, according to Gao, allowing them to process up to one million per day.
The new infections reported Sunday include a nurse the first health worker to test positive since the re-emergence of the virus justover a week ago.
The chief epidemiologist at the Chinese Center for Disease Control and Prevention told reporters Friday that the new outbreak had been `brought under control`, but Beijing would still see new cases.
The outbreak has also spread to Tongzhou, the administrative hub in Beijing where key government offices are located, health officials said.
Infections brought in by Chinese nationals returning home had accounted for the majority of recent cases until the Beijing cluster.-AFP
GLOBAL TRADE SET TO SHRINK 18.5PC IN Q2: WTO
AFP 24 Jun, 2020
GENEVA: Global trade is expected to drop around 18.5 percent year-on-year in the second quarter of this year in a huge coronavirus-driven plunge which nonetheless could have been much worse, the World Trade Organization said Tuesday.
The WTO said that in the first quarter, the volume of merchandise trade shrank by three percent compared to the same three months in 2019.
“Initial estimates for the second quarter, when the virus and associated lockdown measures affected a large share of the global population, indicate a year-on-year drop of around 18.5 percent,” the global trade body said in a statement.
However, it said the expected plunge was better than the WTO’s worst-case scenario for the COVID-19 pandemic’s impact on global trade – and that the world economy may have bottomed out in the second quarter of the year.
“The fall in trade we are now seeing is historically large – in fact, it would be the steepest on record. But there is an important silver lining here: it could have been much worse,” said outgoing WTO director-general Roberto Azevedo.
“This is genuinely positive news but we cannot afford to be complacent.”
In its annual trade forecast issued in April, the WTO forecast that volumes would contract by between 13 percent at best and 32 percent at worst in 2020.
“As things currently stand, trade would only need to grow by 2.5 percent per quarter for the remainder of the year to meet the optimistic projection,” it said.
“However, looking ahead to 2021, adverse developments, including a second wave of COVID-19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections.”
The WTO said the outlook for the global economy over the next two years remained “highly uncertain”.
Azevedo said policy decisions had softened the ongoing blow and would help determine the pace of economic recovery from the crisis.
“For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction,” said the Brazilian career diplomat, who is leaving his post a year early at the end of August.
Looking at the pandemic and its impact on trade, the WTO said that measures to suppress the spread of the virus, such as physical distancing and restrictions on travel and transport that were in full effect in March, April and May were now increasingly being relaxed.
“These developments are reflected in a variety of economic indicators which, taken together, suggest trade may have possibly bottomed out in the second quarter of 2020,” it said.
It said commercial flights, which carry much international air cargo, were down by 74 percent between January 5 and April 18, but had since risen by 58 percent through to mid-June.
Container port throughput also appeared to have staged a partial recovery in June compared to May, it said.
The 164-member WTO said fiscal and monetary policies had arguably been rolled out more quickly and on a larger scale during the pandemic than they were in the global financial crisis of 2008-2009.
It said much of the decline in output had been concentrated in non?tradeable services such as hospitality and entertainment, which were less import-intensive than manufacturing.
Increased purchases of consumer durables could be seen as a bellwether, signalling renewed consumer confidence as lockdowns ease, the WTO said.
FIVE-YEAR TRADE POLICY FINALISED
Mubarak Zeb Khan 27 Jun, 2020
ISLAMABAD: The commerce ministry on Friday finalised five-year Strategic Trade Policy Framework (STPF) draft with measures to diversify exports from traditional sectors to high quality and globally-competitive engineering products.
The announcement came following a review meeting led by Adviser to PM on Commerce Razak Dawood to discuss the framework at the Commerce Division.
“The final STPF draft will be placed before the Economic Coordination Committee of the cabinet shortly”, the adviser said while adding that the draft is being reviewed by stakeholders.
In March, PM Imran Khan had asked the Commerce Division for early finalisation of five-year STPF and Textile Policy in consultation with stakeholders to make it more inclusive for boosting exports.
PM Khan had directed the Commerce Division to finalise the draft five-year plan with a deadline of Dec 31, 2018 to accelerate exports. However, the division failed to prepare a plan within the said time, missing the deadline by almost one-and-a-half year.
Under the proposed STPF 2020-25, special focus has been directed to increase exports of textile, leather, surgical and sports goods, carpet, rice and cutlery were included along with non-formal and development sectors like engineering goods, pharmaceuticals, auto parts, process food and beverages, footwear, gem and jewelry, chemicals, meat and poultry, seafood, marble and granite.
Dawood said that Pakistan is rapidly diversifying its exports into high quality and globally-competitive engineering products.
While discussing the policy, he said that one of the objectives of the STPF is to achieve diversification of exports in products other than the traditional ones. He said the exports of new products especially engineering and pharmaceuticals sectors will be promoted.
“We are going to reduce our reliance on five traditional export sectors—textile, sports, surgical, carpet and leather”, he said, adding that this approach of diversifying exports has also been supported in the Budget 2020-21 through reduction of import duties on raw materials and tariff rationalisation.
Talking about the emerging sectors for export opportunities, Dawood said the country’s engineering products, especially home appliances are now producing internationally-competitive products.
He added that in pursuance of the diversification policy, the export of microwave ovens from Pakistan has been confirmed for the first time by Dawlance.
He said that with government support, other engineering products will soon follow suit. In this regard, duties on import of television components have been reduced to promote local manufacturing.
The adviser was optimistic that the results of the first-ever Mobile Phone Manufacturing Policy recently announced by the government would soon become visible in the coming months in the form of an increase in exports of locally-manufactured mobile devices from the country.
In the last decade, the Commerce Division has notified three STPFs in 2009-12, 2012-15 and 2015-18, but none of these were successful in achieving desired objectives due to various reasons. Moreover, past policies also failed to alter the export paradigm over last decade.
The 2009-10 STPF failed mainly due to mismanagement, whereas the 2012-15 framework suffered at the hands of government’s failure to release the allotted funds.
Further, the 2015-18 STPF was announced after a delay of more than nine months and suffered from financial crunch as the government only released Rs500 million of the total budget of Rs20 billion leading to poor implementation.
The ultimate target of the last STPF was to enhance the country’s annual exports to $35bn by 2017-18.
Published in Dawn, June 27th, 2020