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News Clips 20 November, 2014

[ Strict monitoring system adopted to check fake DTRE applicants ]
[ Effort fortification GSP plus compliance soon ]
[ Decision to exempt industries from loadshedding hailed ]
[ From mid-December to end-January: government may suspend gas supply to textile ]
[ Faulty e-filing system irks taxpayers ]

Strict monitoring system adopted to check fake DTRE applicants   [ top ]

Business Recorder, November 20, 2014
Customs department in order to check misuse of the facility of Duty and Tax Remission for Export (DTRE) scheme has adopted strict monitoring system to detect fake applicants of the DTRE, it was learnt here on Tuesday. According to sources, the imported raw material, under the scheme, would be utilised for manufacturing and exporting output goods within prescribed period starting from the date of approval of DTRE application. 

They said that as per said arrangement, the whole process of DTRE approval; opening of LC; processing of documents; import of input goods; manufacturing of products and exports will be accomplished within the prescribed period. 

However, some `unscrupulous' importers have been availing the facility of DTRE scheme on the imports of different industrial raw materials for commercial purpose although the scheme is meant foor manufactures-cum-exporters However, the Customs Exports Collectorate with a view to detecting fake applicants has now taken foreign buyers on board to verify the veracity of the information provided by DTRE applicants for tax benefits. They said that department asked the foreign buyers to provide complete details of their orders for comparing with the information provided by DTRE applicants. 

"With the beginning of the exercise about four months ago, the number of DTRE applications had declined by 29 per cent," sources said, adding that in fiscal year 2012-13, department had received 300-350 DTRE applications, while the number of such applications in the fiscal year 2013-14 stood at 132 only 16 in the last four months. 

Effort fortification GSP plus compliance soon   [ top ]

Daily Times, November 20, 2014
ISLAMABAD: A consultative meeting with secretary Ministry of Textile (MINTEX) in chair would finalise the names of major international buying chains as well as focal persons from Pakistan side to attend the buyers’ conference. 

The Netherlands Embassy, International Finance Corporation (IFC) and the International Labour Organisation (ILO) in collaboration with government of Pakistan are convening Buyers ‘Forum in mid December.

Buyers’ forum is a joint effort from all stakeholders with the sole aim of strengthening Generalised System of Preferences (GSP) plus status compliance for sustainable textile industry.

The GSP-Plus is conditional to ratification and compliance to 27 international standards and covenants on labour, human and women rights, environment, narcotics and corruption.

These 27 standards comprise eight ILO core labour conventions, six United Nations (UN) conventions on human rights and gender and racial discrimination, nine UN protocols on environment and four UN conventions on narcotics and corruption. 

Decision to exempt industries from loadshedding hailed   [ top ]

Business Recorder, November 20, 2014
Exporters and industrialists have hailed the government's decision of exempting industries from electricity load-shedding. They also lauded the State Bank of Pakistan's decision of reducing rate of interest in its recent monetary policy. They said that the prime minister's directive to exempt industrial sector from power load shedding as well as the reduced mark-up rate would keep the wheels of industries moving, create employment opportunities, besides reducing the high cost of living. 

Hailing the decision, President of Karachi Industrial Alliance, Mian Zahid Hussain, said that uninterrupted power supply to industries would, on the one hand, boost the confidence of the industrial community and, on the other, would help increase production. 

He suggested that a committee comprising all stakeholders, including power producers and distributors, should be set up to implement the decision of uninterrupted power supply to industries in letter and spirit. 

Chief Executive of Trade Development Authority of Pakistan, S. M. Muneer, said that Prime Minister Mian Nawaz Sharif, who is trying his best to bring prosperity in the country, has directed to ensure uninterrupted power supply to industries. He said that the present democratic government, under the leadership of prime minister, was taking concrete economic reforms and his positive steps have boosted the investors' confidence as well as of the country's stock exchanges. 

He said that Pakistan despite being an agricultural country has the ability to increase its exports of textile, garment, leather, ready-made garments and agricultural commodities, specially the rice. He said that the premier's directive of ensuring interrupted power and gas supply to industries and factories will increase exports, besides brightening the chances of getting more export orders. 

Lauding the prime minister's directive of ensuring uninterrupted power supply to industries, Korangi Association of Trade and Industry's (KATI) President Rashid Ahmed Siddiqui, said that the premier's steps would help exporters to get benefit of GSP Plus status. He also hailed the State Bank of Pakistan's decision of reducing interest rate in its monetary policy. 

From mid-December to end-January: government may suspend gas supply to textile   [ top ]

Business Recorder, November 20, 2014
The government is likely to suspend gas supply to textile industry from mid-December till end-January 2015 resulting in a huge export loss. According to officials in the Ministry of Petroleum and Ministry of Textile Industry, the government has no option but to suspend gas supply to Punjab based industrial units for at least two months in the winter as gas demand/supply gap on the Sui-Northern Gas Pipelines limited (SNGPL) network will soar to 1.8 billion Cubic Feet per Day (BCFD) by next month. 

Officials said that keeping in view this gap the management of the SNGPL is simply unable to meet the demand of domestic and commercial/industrial consumers. Textile industry is requesting 100 Million Cubic Feet per Day (MMCFD) during winter, but without a commensurate decline in supply to the domestic sector this would not be possible. According to S. M. Tanveer, Central Chairman All Pakistan Textile Mills Association (APTMA), if the government suspends gas supply to Punjab based industrial units the country will suffer $2.5 billion losses. 

Talking to Business Recorder here on Wednesday, he said that about 70 percent textile industry is based in Punjab. The country's textile exports were $13.7 billion last year. Currently about 30-35 percent industry is shut down owing to the energy crisis that has reduced gas supply to only 8 hours per day. If gas supply is suspended for two months the industry would come to a complete standstill, he added. The APTMA chief further said that it costs Rs 7 to produce one unit power for the industry based in other provinces due to "good" gas supply. However, in Punjab, the cost per unit soar to Rs 12.5 due to gas shortages. According to him, in case of total gas suspension it will no longer be viable to operate as the production cost will become too high. 

Huge losses to the textile export would result in making 15 million people jobless - directly or indirectly - which would create serious social and economic unrest. Prime Minister Nawaz Sharif has constituted a Finance Minister Ishaq Dar-led committee to resolve the issue of gas shortage for textile industry in Punjab during winter. The committee failed to reach any agreement on Tuesday. However it was decided that gas would be supplied till a final decision in this regard. The committee is likely to meet again to thrash out a solution for the Punjab-based textile sector. 

The Committee has been tasked to propose mechanisms for a sustainable gas supply to textile industry of Punjab in winter. It has also been asked to address low pressure of gas for industry in Punjab and resolve any other relevant issue. According to some senior officials of the SNGPL: "We have no option but to suspend gas supply to industrial units and CNG outlets of Punjab owing to a serious gas shortage, which has soared to 1.1 BCFD mark against 800 Million Cubic Feet per Day (MMCFD) in October and this gap will surge to 1.8 BCFD in December so the company will not be in a position to supply gas to industry and CNG sector in the province." 

Due to serious gas shortage the government has cut gas supply to three fertilizer plants on the SNGPL system. Out of total national gas production of 4.2 BCFD 3 BCFD is distributed through the networks of the SNGPL and SSGC. SNGPL and SSGC are getting 1.9 BCFD and 1.1 BCFD of gas, respectively. SNGPL's woes have been accentuated by its decision to provide gas connections to 300,000 new consumers, sources maintained. 

Faulty e-filing system irks taxpayers   [ top ]

Dawn, November 20th , 2014
KARACHI: The trade and industry has criticised the Federal Board of Revenue (FBR) for launching an e-filing system without verifying its shortcomings which are creating hurdles in filing of income tax and wealth statements for the tax year 2013-14.

Industry representatives pointed out a number of issues in the new e-filing software, Integrated Risk Information System (IRIS), saying that it was impossible for taxpayers to meet the Nov 21 deadline.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman said that repeated reminders about these hardships had been landed on deaf ears.

If the government acted in such a callous way, no one else would be responsible for hindering in the way of developing tax culture in the country, he said. The country’s tax-to-GDP ratio has already slipped to 8.5 per cent from a little over 9pc, he added.

He said the FBR seemed uninterested in resolving issues in the e-filing system because up to 80pc of the revenue budget is collected through withholding tax regime.

Shabir Ahmed, chairman of Pakistan Bedwear Exporters Association (PBEA), said that the FBR had already extended the deadline three times but flaws still persisted.

If FBR high-ups and Finance Minister Ishaq Dar were not keen to collect revenue from taxpayers, why people should bother meeting this legal and moral responsibility, he questioned.

Towel Manufacturers Association’s Chairman Waqar Alam criticised the FBR for introducing the IRIS software without consulting stakeholders.

The IRIS system did not even give the option of bringing forward last year’s credit, and the option of realising advance tax was also not working, he said, and urged the FBR to further extend the deadline.