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An unexpected spell of light rain in different areas of Karachi on Friday night turned the weather pleasant but also troubled people as it caused power outage in various localities and traffic jams due to accumulation of water on roads.

 

“It was development of Cumulonimbus clouds over Lasbela and its surrounding areas of Balochistan, which drifted towards Karachi, creating dust storm, lightning and light rain. It is over now after causing light rain in various areas of the city,” said Sardar Sarfraz of the Pakistan Meteorological Department (PMD).

Weather remained warm and humid on Friday but it started improving in the evening when people observed an overcast sky and experienced a cool breeze blowing. As soon as the sun set, a mild dust storm followed by light rain hit the Surjani Town, Gadap, North Karachi and Sohrab Goth areas. Light rain also occurred in the North Nazimabad, Gulistan-e-Jauhar, Sharea Faisal, Shah Faisal Colony and University Road, where it caused accumulation of water on roads.

A few minutes later, Cumulonimbus clouds covered the entire city and caused light rain in the Saddar, II Chundrigar Road and other areas. Commuters

on Preedy Street and streets of Saddar suffered as the rain caused traffic congestion.

The rain excited the people of Karachi who had been enduring sweltering heat for some days. Many people shared their joy on social media platforms by uploading videos, pictures and messages about the rain.

PMD officials termed it a light spell of rain, saying that hardly 1.2 to 2.4 millimetres of rain was recorded from different areas of the city. The drizzle, however, turned the weather pleasant by dropping the temperature in the city.

“The temperature dropped to 28 degrees Celsius from 32 degrees Celsius following the rain and it is expected that Friday night would be very pleasant in Karachi. Weather 

would remain warm and humid with the maximum temperature ranging between 34 and 36 degrees Celsius on Saturday and Sunday,” Sarfraz said.

PMD officials explained that this unexpected spell of rain had nothing to do with the monsoon season, which is expected to start in the first or second week of July. They said the upper parts of the country were expected to receive slightly above normal rain; whereas, Sindh and Balochistan would have slightly below normal rain in the upcoming monsoon season that would start in July and end in September.

Meanwhile, the light rain did not prove to be a blessing for everyone as different areas of the city suffered power cut. Some areas were without power when this story was being filed. Officials of K-Electric said their teams were working for the restoration of power.

 
 
 
 
 
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ISLAMABAD: The Budget 2019-2020 has proposed 10 percent increase as ad hoc relief in the salaries of civilian and military employees from grade 1 to 16 and 5 percent in the salaries of grade 17 to 20 employees. No increase has been proposed in the salaries of grade 21 to 22 employees.

 

The minimum wage has been set at Rs17,500 per month. Presenting the budget 2019-20 in the National Assembly, Minister of State for Revenue Hammad Azhar announced ad hoc relief of 10% in the salaries of grade 1 to 16 employees, including the armed forces’ employees.

He said the BPS 17 to 20 employees will be given ad hoc relief of 5% in their salaries. Employees in BPS 21 and 22 will receive no increase in pay as they have decided to sacrifice for the sake of improvement in the economic situation of

the country.

“Increase in net pension @10% will be given to all civil and armed forces pensioners of the federal government employees,” he said. Special conveyance allowance for disabled employees will be enhanced from Rs1,000 per month to Rs2,000 per month.

Special pay admissible to SPS/PS/APS to ministers, ministers of state, parliamentary secretaries, additional secretaries, and joint secretaries will be enhanced by 25%. The taxable income has been revised down to Rs600,000 for the salaried class and Rs400,000 for the non-salaried class.

 
 
 
 
 
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ISLAMABAD: The government is unveiling Budget 2019-20 in parliament today with an expected outlay of Rs6.6 trillion, demonstrating its political will to generate revenue and cut expenditure through the austerity drive for achieving economic stability under the IMF’s tight scrutiny.

 

Dr. Hafeez Pasha — Pakistan’s economic czar — will share a tough roadmap for economic stability under the 39-month IMF programme, with prescription of generating tax revenue in the shape of taking additional measures and improving administration as well as curtailing expenditures through the austerity drive with the help of all segments of society.

The government has estimated budget deficit slightly below 6 percent of GDP equivalent to Rs2.5 trillion. The government has accepted a challenging task to generate Rs5,550 billion revenue in the next budget against revised estimates of Rs4,150 billion, which requires over 35 percent growth. The non- tax revenue target has been envisaged at Rs1.2 trillion.

Pakistan’s expenditures revolve around three Ds including debt servicing, defence anddevelopment. Out of total revenue, more than Rs3 trillion will be transferred to the provinces under the National Finance Commission Award (NFC), while the remaining share of federal government amounting to Rs2.5 to 3 trillion could hardly meet the requirement of debt servicing in the next budget. With this kind of financial straits, the Centre is left with no option but to borrow to meet the requirements of defence, development, subsidies and running government affairs.

Former finance minister Dr Hafeez A Pasha told this reporter that the Ministry of Finance used to understate the budget deficit and they were doing the same in the revised budgetary estimates for the outgoing fiscal year 2018-19.

He said the revenue increase of Rs1,550 billion for achieving the annual target of Rs5,550 billion would be highly unfeasible. He said freeze on the defence expenditure at the level of outgoing fiscal year was a welcome move.

However, he said the overrun in expenditures could not be ruled out in the next budget as well. He said the government played a trick to show inflated figure of development programme by inserting Rs250 billion into the mode of public private partnership (PPP), adding that the provinces allocated Rs912 billion for annual development outlays out of which it would be hard to utilise Rs500 billion in the next fiscal year.

There has been a trend over the years towards the federal budget being unsustainable. There is a need to understand what do we mean by “unsustainable”. The budget is unsustainable when after meeting the unavoidable or legally required expenditures, there is little or no room left in the budget for other expenditures which, though not legally required, are very important to provide for public services and public investment.

These expenditures are called “discretionary”. In practice, there is no absolute distinction between “discretionary” and “non-discretionary” areas of expenditure. But for practical purposes, the non-discretionary areas of public spending should be considered to include: (i) the legally “charged” expenditures required to finance the constitutionally established bodies; (ii) debt service on domestic and external debt, (iii) transfers to the provinces under the National Finance Commission awards, (iv) spending on the security forces, and (v) meeting the salary costs of established public sector employees.

The problem of fiscal sustainability

The problem of fiscal sustainability which the federal government is facing is that the amount of space in the budget remaining for “discretionary spending” after meeting the non-discretionary items, has been declining year after year. This has happened for several reasons: first, federal revenues have risen only modestly and from a base which is very low by international standards (as measured, for example, by the tax to GDP ratio); second, the share of the budget used to meet debt service obligations has risen at an alarming pace; third, the size of public sector workforce continues to grow, and this is in spite of provisions of the 18th Amendment, which in principle should have led to a reduced federal work-force, as important service delivery responsibilities of the federal government were transferred to the provinces.

The steady erosion of discretionary space in the federal government budget can be most clearly seen in reduction in the size of Public Sector Development Programme (PSDP) when measured as a share of GDP. This ratio has fallen over the years, as it used to range at 4.7% in 2006-07 but now it has nosedived to less than 2 percent of GDP in the outgoing fiscal year. It will further shrink in percentage of GDP in the next budget for 2019-20. However, it has also led to chronic pressure on the non-salary component of recurrent budget, and is reflected in divisions having inadequate operation budgets to provide quality services.

Clearly, it will not be easy to reverse the existing trend towards reduced fiscal space. Any solution will necessarily involve politically difficult policies aimed at addressing the underlying causes of the problem. Such policies include “right-sizing” of the federal public sector staffing in the light of 18th Amendment, more effective policies and administrative systems to increase federal revenues and/or several years of fiscal restraint to reduce the magnitude and growth of debt-service obligations.

There are many off-budget items and the main areas of under-estimation usually relate to the likely “contingent liabilities” which in all probability will arise during the budget year. These are liabilities which sometimes cannot be forecast accurately in advance, but which are highly likely to be met during the year.

The most important examples are “circular debts” arising from operations in the energy and other sectors – e.g. commodity financing. The present practice is not to make provision in the approved budget 

for such expenditures. The second type of off-budget items are the periodic expenditures required to support loss-making public sector enterprises (PSEs).

 
 
 
 
 
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The Goods clearing process has resumed at Tokham border as customs clearing agents on Tuesday ended their protest after successful negotiations with officials’ customs department. The clearing of a large number of vehicles, loaded with good items, was remained suspended for last 24 hours due to strike of customs clearing agents against one Goods Declaration (GD) form one truck policy, introduced by the Customs centre at Torkham border.

However, the customs agents and officials held a successful negotiation after which the protest was ended. The Torkham border will remain open till 12:00 pm today night as long queues of vehicles, loaded with goods items stuck up at the Pak-Afghan sharing border. According to Customs clearing agents, they are facing difficulties in Web-based One Custom (WeBoC) system but the customs authorities didn’t clear vehicles, loaded with goods items without the WeBoC system.

Whenever, the customs agents said the issue of WeBoC raised so the goods clearing process was carried by manual system. They said that authorities assured them the old system of goods clearing will be reactivated after the Eid-ul-Fitr. Officials of customs department said that the customs agents were against the submission of duty and checking of goods through WeBoC system, which aimed at to make the modern goods clearing system non-functional. Assistant Collector Customs Torkham said that the WeBoC is modern online goods clearance system, which has remained operational around the clock at the border. He said that all details of goods cargo registered and goods pictures also attached with form under the WeBoC system, preventing the any chance of corruption and other corrupt practices.But, the officials said that some customs clearing agents and importers were unhappy with this modern system because they were aimed to earn millions of rupees by smuggling and fake declaration, therefore they [clearing agents] are strongly opposing the WeBoC and showing resistance in implementation of the modern goods clearing system and held strike against WeBoC.
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ISLAMABAD: The government on Sunday increased prices of all petroleum products by up to 6.45 per cent for the month of April as the international crude price inched up by less than 2pc over the last month.

Petrol and diesel prices were increased by Rs6 per litre while kerosene and light diesel oil (LDO) were jacked up by Rs3 per litre with immediate effect, according to an official announcement.

With the decision, the ex-depot price of high speed diesel (HSD) was set at Rs117.43 per litre — the highest since July 2018 — instead of existing rate of Rs111.43 per litre, up by 5.36pc.

Likewise, the ex-depot price of motor spirit (petrol) was fixed at Rs98.89 per litre — also a nine-month high — instead of current rate of Rs92.89, showing an increase of 6.45pc.

The ex-depot price of kerosene oil was increased to Rs89.31 per litre — the highest since October 2014 — from Rs86.31 per litre, indicating an increase of almost 3.5pc.

The ex-depot price of LDO was increased to Rs80.54 per litre — a five-month high — from the previous rate of Rs77.54 per litre, up by 3.9pc.

However, the government did not pass on the full price hike calculated by the Oil & Gas Regulatory Authority (Ogra) last week and reduced tax rates to minimise political backlash.

Based on import parity price of Pakistan State Oil (PSO) for purchases in March, Ogra had worked out about Rs11.17 increase in the price of HSD per litre, Rs11.91.71 hike in petrol price, Rs6.65 rise in kerosene price and Rs6.49 increase in LDO price.

Crude price (Brent) had increased by less than 2pc over the last month from $66.57 on Feb 28 to $67.86 per barrel on March 28.

The government had already increased general sales tax (GST) on all petroleum products to standard rate of 17pc across the board to generate additional revenues. Until January 2019, the government

had been charging 0.5pc GST on LDO, 2pc on kerosene, 8pc on petrol and 13pc on HSD.

Besides the 17pc GST, the government had more than doubled the rate of petroleum levy on HSD in recent months to Rs18 per litre instead of Rs8 per litre, while levy on petrol had also been increased by 40pc to Rs14 per litre instead of Rs10 per litre.

Over the last two months, the government started increasing petroleum levy rates to partially recoup a major revenue shortfall faced by the Federal Board of Revenue (FBR). The petroleum levy remains in the federal kitty unlike GST that goes to the divisible pool taxes and thus about 57pc share is taken by the provinces.

Petrol and HSD are two major products that generate most of the revenue for government because of their massive and yet growing consumption in the country. Total HSD sales are touching 900,000 tonnes per month against monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

The petroleum prices have been on the rise since early 2017, barring only a couple of times when they were reduced.

For the past two weeks, the international benchmark Brent prices have been inching up and the government has also been mopping up tax rates in run up to finalisation of an IMF-assisted stabilisation programme.The government has already announced that it will gradually increase electricity and gas rates over the next few months

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Over 64 customs officials, including customs appraisers have been fully trained for interdiction techniques and methodology of intercepting counterfeit goods at the ports and customs stations. In this regard, a training programme has been concluded here on Thursday which would ensure prevention of import of counterfeits in Pakistan.

Under the special directions of Director General, IPR Enforcement Dr Arslan Subuctageen, the Directorate General of IPR Enforcement, Islamabad arranged an exclusive training programme on “Interdiction Techniques and Methodology of Detecting Counterfeit Goods” for the officers of MCC Islamabad and MCC Peshawar (Appraisement & Preventive). The officers and staff working in IPR Directorates (Central & North) also attended the training. A total of 64 officers, appraisers, inspectors, and examiners posted at various field formations in Islamabad and Peshawar attended the training. Customs IPR’s external outreach programme focuses on raising 1PR awareness at the grassroots level. Amer Rashid Sheikh, Director Customs IPR (South), was specially invited to impart the training. The participants greatly appreciated the initiative. The external outreach programme was rolled out during the training.

Sources said that the role of Pakistan Customs is multi-faceted, ranging from border trade revenues to import and export controls. All these functions are rooted in the term ‘trade facilitation’, which is synonymous with ease of doing business. Trade facilitation is for trade in genuine goods only; it does not extend to trade in counterfeit products. This is the spirit of the TRIPS and WTO’s Agreement on Trade Facilitation. The Directorate General of Customs IPR Enforcement ensures that counterfeit goods do not cross our national borders, and that the public is protected from their hazardous use. These efforts by Pakistan Customs have improved Pakistan’s image and its international ranking Sources said that the role of Pakistan Customs is multi-faceted, ranging from border trade revenues to import and export controls. All these functions are rooted in the term ‘trade facilitation’, which is synonymous with ease of doing business. Trade facilitation is for trade in genuine goods only; it does not extend to trade in counterfeit products. This is the spirit of the TRIPS and WTO’s Agreement on Trade Facilitation. The Directorate General of Customs IPR Enforcement ensures that counterfeit goods do not cross our national borders, and that the public is protected from their hazardous use. These efforts by Pakistan Customs have improved Pakistan’s image and its international ranking in the Global IP Index, which would continue to grow further.

By preventing the import of counterfeits at our national seaports, airports and land border stations, the FBR is facilitating large-scale manufacturing in Pakistan to expand its domestic and international market share and speed up the economy. FBR is continuously striving to enhance ease of doing business in Pakistan, attract large-scale FDI and provide the platform for robust economic growth. FBR, through its pursuit of protecting large-scale manufacturing from the import of counterfeit products, is playing a vital role in the economic development of the country.
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Karachi Customs Agents Association (KCAA) has demanded the customs department to defer the implementation of deactivation User ID option of WeBOC Glo by the end of holy month.

Arshad Khursheed, General Secretary, KCAA said that Pakistan customs had launched the first phase of WeBOC Glo on May 13, 2019 and introduced deactivation User ID option in it.

He said that the WeBOC Glo had defined the period for deactivation User ID and added that inactive user ID of traders and clearing agents would be deactivated after 60 days and 15 days, respectively.

He said that some 15 to 16 user IDs of clearing agents were so far deactivated, causing delays in the clearance of the consignments.

Replying to a question, he said that reactivation of user IDs was not being done after at least two days due to short-working hours in Ramadan and urged the customs department to defer the implementation of deactivation User ID option in WeBOC Glo by the end of holy month to facilitate the trade.

Furthermore, he also proposed the customs department to extend the period for deactivation User IDs up to 6 months for traders and a month for clearing agents.
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ISLAMABAD: Pakistan has signed an agreement with Bulgaria on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

The agreement was signed at the sideline of the Second Session of Pakistan–Bulgaria Inter-Governmental Commission (IGC) which concluded on Tuesday.

Director General FBR Muhammad Ashfaq Ahmad and Deputy Minister of Economy Republic of Bulgaria Liliya Ivanova signed the agreement on behalf of their respective governments.

The agreement would not only provide safeguards against double taxation of income of Pakistani and Bulgarian residents but also promote economic cooperation, investment and further strengthen the existing economic relations.

Enhance bilateral trade

Meanwhile, the second session of the IGC concluded with a resolve to enhance bilateral trade between Pakistan and Bulgaria.

Secretary Economic Affairs Division (EAD) Noor Ahmed and the Bulgarian deputy minister of economy led their respective delegations.

According to an official announcement, the IGC discussion focused on enhancing trade, economic cooperation in ICT, agriculture, livestock, tourism, culture, maritime and railways sectors.

The two sides agreed to work together for promotion of bilateral trade and investment.

The Bulgarian side agreed to facilitate the export of Pakistani citrus fruit, mango, rice, raw cotton, dates, fruits and marble to Bulgaria and other East European countries, while Pakistan said it would facilitate export of Bulgarian products in the country.

Both sides also agreed to encourage their businessmen 

for participation in trade fairs and exhibitions and to work for establishment of joint ventures in automotive, engineering and food processing.

Secretary EAD in his concluding remarks said the two countries will continue to strengthen economic and trade relations in future for mutual benefit of two countries.

Mrs Ivanova assured that Bulgaria will enhance cooperation with Pakistan in the identified areas.

Representatives of various ministries and organisations also participated in the event.During her stay in Pakistan, Mrs Ivanova called on the Minister of National Food Security and Research Sahibzada Mehboob Sultan and Adviser to the Prime Minister on Commerce and Textile and Investment Abdul Razak Dawood.

 

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Chairman, Pakistan Ship’s Agents Association and former vice president FPCCI Tariq Haleem has urged the Chairman Federal Board of Revenue (FBR) Shabbar Zaidi to appoint a task force/ JIT to address issues of under/over invoicing, misdeclaration and smuggling on war footing and all these culprits should vigorously be pursued, caught and prosecuted. In a letter to the chairman FBR, he pointed out that this menace is causing massive losses to the national exchequer.

He noted that none of these nefarious activities can be carried out without facilitators. Customs intelligence, FIA, all border authorities, ministry of Interior etc should form special JITs to finish this menace under the direct monitoring of prime minister. These JITs should report to prime minister on a biweekly basis, he suggested.
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President Donald Trump vowed Tuesday to help hard-hit American farmers caught in the middle of the escalating trade war between Washington and Beijing.

China on Monday hit back against the United States, announcing it will sharply increase duties on thousands of US agricultural and manufactured goods to retaliate against Trump’s decision last week to more than double the punitive duties on hundreds of billions of dollars in Chinese merchandise.

“Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now,” Trump said on Twitter. “Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy.”

Since last year, the trade war has gutted US farm exports to China and weighed on both countries’ manufacturing sectors.

The Trump administration last year offered $12 billion in compensation to American farmers and has vowed to do more, using the revenues from the new tariffs – which he incorrectly claims is paid by China rather than US importers.

“This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been ‘forgotten’ for many years. Their time is now!”

Trump launched the trade war last year to extract profound economic reforms from Beijing and reduce the US trade deficit. He accused China of seeking to dominant global industries through massive state subsidies and theft of American technology – in violation of its commitments upon joining the World Trade Organization in 2001.The United States and China have so far exchanged tariffs on more than $360 billion in two-way trade.

Trump also is considering extending tariffs to virtually everything American companies import from China, which economists warn would spill over into the global economy and US industries say would be catastrophic. The US Trade Representative office announced the start of a process to impose new duties on another $300 billion worth of Chinese merchandise, with a hearing scheduled for June 17. Trump said Monday he had not decided whether he would ultimately impose those levies.

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