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The European Commission has drawn up a list of US imports worth around 20 billion euros ($22.6 billion) that it could hit with tariffs over a transatlantic aircraft subsidy dispute, EU diplomats said on Friday. President Donald Trump on Tuesday threatened to impose tariffs on $11 billion worth of European Union products over what Washington sees as unfair subsidies given to European planemaker Airbus.

The EU measures would relate to the bloc’s World Trade Organization complaint over subsidies to rival Boeing. WTO arbitrators have yet to set final amounts of potential countermeasures in each case.

The Commission said earlier this week that it had begun preparatory work on countermeasures in the Boeing case. However, it signalled it was open for talks with the US, provided these were without preconditions and aimed to achieve a fair outcome. EU diplomats said the Commission was expected to publish a list of products on April 17 and begin a process of public consultation, after which the list could then be adjusted.
The final amount decided by the WTO arbitrator could also be lower. The EU had also initially requested that the WTO authorise countermeasures of $12 billion. The arbitrator’s decision may not come before March 2020. In the US case a WTO decision could come in June or July this year.

“You could say the Commission is preparing early, provoked by the US,” one EU diplomat said. The dispute between the US and Europe over mutual claims of illegal aid to plane giants to help them gain advantage in the world jet business has dragged on for year.

The case, which has been grinding its way through the WTO for almost 15 years, is approaching the final stages of arbitration after partial victories for both sides. Trump’s public attack on the EU came as his administration tries to hammer out a trade deal with China after imposing punitive tariffs on $250 billion of Chinese goods.

The EU is expected next week to give final clearance to the start of formal trade talks with the US that could lead to the removal of duties on industrial goods and ease transatlantic tensions. However, those talks face a series of hurdles, not least the US insistence that market access for its farm products feature in the negotiations, something the EU has ruled out.

The talks follow a detente reached last July when Trump agreed not to impose duties on imports of EU cars while the two sides sought to improve economic ties. Germany, whose exports of cars and parts to the US account for more than half the EU total, wants to press ahead with talks to ward off tariffs its carmakers, including Volkswagen , Mercedes maker Daimler and BMW.

France, with few car exports to the US, has resisted, insisting that climate changeFrance, with few car exports to the US, has resisted, insisting that climate change provisions should feature in any deal – a difficult demand given Trump’s withdrawal from the Paris climate agreement.
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The Federal Board of Revenue (FBR) intelligensia is not fair with the government on its reform agenda, said the Board sources. “The FBR intelligensia is not in favour of reforms and managing status quo through bureaucratic tactics,” they said, adding: “The government, on the other hand, is too weak to establish its writ against the adamant tax intelligensia.”

Sources said there was no status of reforms in the FBR and the worst economic situation of the country was also favouring those who prefer status quo. They have further pointed out government’s compulsion of collecting maximum revenue before introducing reforms by expanding tax net. Therefore, the government is also following the policy of go-slow on reform agenda, they said.

According to them, the government is also looking into a sense of urgency and pressing the department for reforms without considering the ground realities and without understanding the working environment of the department. The government policymakers should assess the existing tax machinery, mechanism of tax collection and the mindset of taxpayers.

Sources said the government would have to ensure general public that the reform process would ‘inclusive’ to create their trust on the system. It would have to bring a change in existing system of squeezing weaker ones while letting the influential one scot-free, they stressed.

They pointed out that it is fortunate that Pakistan has a regressive tax system and no one files a return voluntarily. Therefore, the FBR has no option but to adopt regressive measures including unearthing the concealed assets, imposing fines on non-filers and infringing the rights of taxpayers in order to tax them.

They said the existing strength of FBR staff is not only too little to match the agenda of ‘change’ of prime minister but also lacks capacity to perform.

It may be noted that the World Bank-sponsored Tax Administrative Reforms Process (TARP) had led to the creation of the Large Taxpayer Units (LTUs) at the FBR back in early 2000. it is generally believed that the LTUs are highly organized with better working practices comparing to the rest of the FBR. But the ground realities suggest that the situation at the LTUs is much in disarray as compared to the non-corporate sector, as there is no organized system to track tax record of taxpayers there. Most of the files are lying in corridors there and it seems that nothing is in order at the LTU Lahore.

According to the sources, the government should start consultation with other stakeholders including tax bar, trade bodies and other segments of the society to defeat the bureaucratic hurdles in smooth implementation of reforms.

It may be noted that both the tax avoidance and tax evasion are plaguing the tax collection machinery in Pakistan. In order to get rid of it, there is a dire need of trust building on the part of taxpayers that the tax they paid by them would be utilized for their betterment and not misused by the state, the departmental, the sources concluded.
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ISLAMABAD:
The Secur­ities and Exchange Commission of Pakistan (SECP) has allowed the stockbrokers to provide advisory services without obtaining any licence, but forbade them to receive any charges for this service.

The regulator on Friday notified the amendments to the Securities and Futures Advisers (Licensing and Operations) Regulations, 2017 by accepting the demands of the stockbrokers to make the advisory regulatory regime practicable and conducive.

The SECP has said that the rationalised licensing regime for securities brokers coupled with other SECP measures would definitely contribute to reducing regulatory burden and the cost of doing business for capital markets, ultimately promoting the ease of doing business.

Earlier, it was mandatory to obtain advisory licence even for the stockbrokers. The new regulations allow the stockbrokers to provide securities advisory to their customers, without receiving any separate compensation for it.

 

The stockbrokers have also been permitted to distribute units of mutual funds and voluntary pension funds of multiple asset management companies (AMCs).

Under the new regulations, the advisory regime has been segregated into two segments: one includes advisory with portfolio management to be governed under the non-bank finance companies (NBFC) scheme whereas advisory with distribution of units of mutual funds.

The other segment includes voluntary pension funds of multiple AMCs to be dealt under the amended Securities and Futures Advisers (Licensing and Operations) Regulations, 2017.

The SECP said that in view of the local conditions related to capital market, it has been decided to grant licences only to corporate entities for undertaking any regulated activity in the capital markets and such a licence would not be issued to any individual.

Apart from the stockbrokers, entities registered under the Companies Act for the purpose of providing advisory and distribution of Collective Investment Schemes and/or Voluntary Pension Fund units of multiple AMCs as well as the banks are eligible to benefit from the new policy.

At the same time the regulations have detailed and strict codes over the issues of ‘Conflict of Interest’ and ‘Confidentiality’.

They also permit banks to distribute units of mutual and voluntary pension funds of multiple AMCs with the view to broaden the investor base.

However, this permission to the banks is subjected to certain regulatory requirements.

The deadline to obtain licence has been extended to June 30, 2018, so that the existing distributors can avail the facility.

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NORWAY / OSLO: 

Pakistan has become one of the top five emerging economies in the world, said Minister for Planning, Development and Reform Ahsan Iqbal.

Iqbal, who is on an official visit to Norway, said Pakistan has exhibited one of the fastest growth rates in the last five years. He was interacting with Pakistani-Norwegians at an event organised by the Embassy on Friday.

Highlighting Pakistan’s rapid economic development, the minister said a few years ago, Pakistan was not considered the safest place in the world, but now it is ranked among the fastest emerging economies in Asia. 

“Economic growth had stagnated at 3% when this government came into power. Last year, we achieved a growth rate of 5.3% and we are expecting it to reach 6% this year,” said the minister, adding that the industrial growth had increased significantly due to the addition of 11,000MW of electricity to the national grid.

Referring to the greatly improved law and order situation in the country, Iqbal said, “Karachi had lost its status as a business and investment hub, but now target killings, land mafias and the culture of extortion are becoming a thing of the past. More than a hundred factories have resumed operations, reviving the entire economy of Karachi.”

Talking about Balochistan, he said the situation had improved due to an unprecedented number of development projects initiated in the province. “The China-Pakistan Economic Corridor (CPEC) is a game-changer.”

He said that major infrastructure projects related to CPEC were being completed on schedule in-line with the policy of economic integration of the region as envisioned in the Pakistan Vision 2025.

Highlighting the important role of the diaspora in building Pakistan’s economy, the minister termed foreign remittances ‘a lifeline’ for the country. Iqbal encouraged increased foreign investment by Pakistani-Norwegians and called upon them to become ambassadors of a rising Pakistan by prioritising research for the attainment of “knowledge supremacy” and to present a forward-looking image of Pakistan to the rest of the world.

 

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The State Bank of Pakistan (SBP) has restricted cash US dollar import by Exchange Companies (ECs) at 35 percent of total export of permissible foreign currencies in a month. Previously, there were no limitations on cash import of US dollar and exchange companies were importing US Dollars against export of permissible foreign currencies in shape of cash or directly in their foreign currency accounts maintained with banks in Pakistan without any restrictions.

Until July 2015, ECs were permitted to export permissible foreign currencies against repatriation of equivalent US dollars in their foreign currency accounts maintained with banks in Pakistan. However on request of exchange companies, SBP as on July 25, 2015 allowed ECs for import of cash US dollars against export of permissible foreign currencies.

Initially, ECs were allowed to import cash import US dollar against export of permissible foreign currencies without any limit and the facility was announced for 75 days and later several extensions were granted. Now, the SBP has decided to grant extension without any timeframe with restricted cash import of US dollar.

According to EPD Circular Letter No. 01 of 2018 issued on Monday, as the last extension of cash US dollar import was expired on December 31, 2017, it has been decided that Exchange Companies can continue to import cash US Dollars against export of permissible foreign currencies unless advised otherwise.

However, as per new directives, ECs have been asked that total import of cash US dollars should not exceed 35 percent of total export of permissible foreign currencies during a month.

ECs major part of US dollar import was in the shape of cash. Therefore, in order to further streamline the import of US dollar, SBP has decided to limit the cash import at 35 percent. Now ECs are required to import the remaining 65 percent US dollar against export of permissible foreign currencies in their foreign currency accounts maintained with banks in Pakistan.

SBP said that all other terms and conditions on the subject will remain unchanged and failure to comply with the above instructions will attract a strict regulatory action under related rules & regulations.

As per procedure cash US dollars must be brought into Pakistan within two working days from the date of export of foreign currencies. The practice of repatriation of USD through credit to bank accounts of ECs with banks in Pakistan will remain unchanged.

In addition, representatives of ECs will be required to declare the import consignment of cash US Dollars, upon their arrival into Pakistan, to the SBP staff at SBP Booth located at airport along with original deal ticket of foreign bank/exchange company clearly showing the amount of cash USD.
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ISLAMABAD: 

Pakistan and Russia are set to ink agreements this week on laying an offshore gas pipeline and the North-South liquefied natural gas (LNG) pipeline – the two projects in which Moscow will pour an investment of over $10 billion, indicating a major shift in foreign policy of Islamabad.

“A Pakistani delegation will leave for Russia on December 20 to sign these deals in order to execute the two gas pipeline projects,” said a senior government official while talking to The Express Tribune.

Inter State Gas Systems (ISGS) – a state-owned company established to handle gas import matters – is working on different gas pipeline projects and its managing director and the petroleum secretary will be part of the delegation.

 

ISGS is also working on the $10 billion Turkmenistan, Afghanistan, Pakistan and India (Tapi) gas pipeline to connect South and Central Asia and construction work on the scheme in Pakistan will start in March next year.

These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet energy needs of the country.

Amid a long-running tussle with Europe and the United States over the annexation of Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalise on the growing demand in South Asia.

Russia, which controls and manages huge gas reserves in energy-rich Iran, plans to export gas by laying an offshore pipeline through Gwadar Port to Pakistan and India, which are seen as alternative markets because Moscow fears it may lose energy consumers in Europe over the Crimea stand-off.

Russia has been a big gas exporter to European Union (EU) countries and Turkey since long and despite US anger the European bloc has continued to make imports to meet its energy needs.

Moscow receives gas from Turkmenistan and then exports it to EU states. Later, it has got gas deposits in Iran as well and is looking to gain a foothold in the markets of Pakistan and India.

Earlier, Pakistan and Russia had reached an understanding on signing the offshore gas pipeline deal during Prime Minister Shahid Khaqan Abbasi’s visit to Sochi, Russia. Now, during the upcoming trip, the two sides are poised to ink memoranda of understanding (MoUs) for the offshore pipeline and the North-South (Lahore-Karachi) LNG pipeline.

Pakistan has been experiencing gas shortages, particularly in winter, for the past many years as domestic production has stood static with new additions being offset by depleting old deposits.

In a bid to tackle the crisis, the present government kicked off LNG imports from Qatar under a 15-year agreement two and a half years ago and is bringing supplies through other sources as well.

“Such massive business deals will open a new avenue for closer diplomatic ties between Russia and Pakistan,” the senior government official commented.

On the other hand, Pakistan and the US are going through a critical phase in their relations in the wake of President Donald Trump’s new policy on Afghanistan, which proposes a vital role for India in this region. Pakistan has rejected the suggestion.

According to the government official, after signing of the MoU for the offshore pipeline, work on feasibility study will begin in an attempt to assess viability of the project. Russia is even ready to finance the study.

Russian gas exports touched an all-time high in 2017. According to its energy giant Gazprom, gas flows to Europe and Turkey, excluding ex-Soviet states, hit a new daily record at 621.8 million cubic metres.

Annual exports touched 179.3 billion cubic metres (bcm) in 2016, a significant jump from the previous high of 161.5 bcm in 2013 and well above the 2015 total of 158.6 bcm.

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Taxation, Uncategorized
Federal Board of Revenue has extended the date of filing of returns/statements for the Tax Year 2017 upto December 15, 2017. According to FBR circular issued late Thursday night, n exercise of the powers conferred under Section 214A of the Income Tax Ordinance, 2001, the Federal Board of Revenue is pleased to extend the date of filing of Returns/Statements for the Tax Year 2017 as under:-

1. The date of filing of Returns of Total Income and Statements of Final Taxation which was due on 31stAugust. 2017 and extended up to 30th November, 2017 is hereby further extended up to 15thDecember, 2017.

2. The date of filing of Income Tax Returns and Statements of Final Taxation for Individuals and Associations of Persons, which was due on 30th September 2017 and extended up to 30th November, 2017, is hereby further extended up to 15th December, 2017.
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ISLAMABAD: The Senate was told on Friday that 91 per cent of the revenues to be generated from the Gwadar port as part of the China-Pakistan Econo­mic Corridor (CPEC) would go to China, while the Gwadar Port Authority would get 9pc share in the income for the next 40 years.

This was disclosed by Federal Minister for Ports and Shipping Mir Hasil Bizenjo after senators expressed concern over the secrecy surrounding the CPEC long-term agreement plan, with many observing that the agreement tilted heavily in China’s favour.

The minister said that the agreement was based on a build-operate and transfer model spread over 40 years. That means that Pakistan will take over the operation of the port along with the infrastructure to be built on it during the period to enhance the port’s cargo-handling capacity.

However, Senator Kal­soom Parveen of the ruling Pakistan Muslim League-Nawaz (PML-N) pointed out that the agreement had not been signed on the basis of equality as had been done with India. She asked Senate Chairperson Raza Rabbani to convene a meeting of the committee of the whole of council, in which all relevant departments which signed the pact would be called. Mr Rabbani, however, pointed out that there were already two committees on the CPEC, including a Senate committee and a parliamentary panel. He advised her to take up the issue at the Senate committee on CPEC.

 

PPP leader warns defence minister against committing to terms of Saudi-led coalition without first informing Senate

Senator Sardar Azam Musakhel of the Pakhtunkhwa Milli Awami Party (PkMAP) lamented that neither of the chairmen of the two committees was from Balochistan, and alleged that they had given China a ‘concession’. Senator Mohsin Aziz of the Pakistan Tehreek-i-Insaf stressed that the business community must be involved in signing such business agreements, a task which, he claimed, should not be left to bureaucrats with no business savvy.

Senator Javed Abbasi of the PML-N, however, defended the agreement saying it would greatly benefit Pakistan. He added that the power projects under the CPEC would alleviate Pakistan’s severe energy crisis. He pointed out that most of the power projects would be constructed in Balochistan and Sindh. The project would bring $56 billion investment into Pakistan, he said, adding that the CPEC would include infrastructure projects as well as industrial zones that would generate employment opportunities.

While speaking on a point of order, Senator Farhatullah Babar of the Pakistan Peoples Party (PPP) warned the defence minister not to commit to the terms of the Islamic Military Counter Terrorism Coalition (IMCTC) without bringing it to the notice of the Senate first.

He reminded the government that the defence minister had assured the house that he would share the terms of reference for participation in the alliance with the Senate before taking any decision.

He said the military commander of the coalition had been quoted as saying that the coalition ‘encompassed four key areas of ideology, communications, counterterrorism financing and military to fight terrorism and to join other international security and peace keeping efforts’.

Each of these areas, particularly the one pertaining to ideology, presented potential pitfalls and challenges with far-reaching consequences for Pakistan, he said, and demanded clarity on issues involved and stressed the need to lay down all the facts before parliament.

Senator Rabbani endorsed this demand, and said that then defence minister Khawaja Asif, now the foreign minister, had assured them that the house would taken on board before the government became party to any such venture with the Saudi-led military alliance. The alliance announced in December 2015 has 41 members, and Pakistan was a part of the first 34 countries to join the coalition.

Lawmakers from both sides of the aisle expressed concern over the absence of senators, which delayed voting on the delimitation bill pending before the Senate. Some have suggested the possibility of ‘hidden hands’ in preventing passage of the bill which would ensure that elections could be held in a timely manner next year.

Senator Usman Khan Kakar of the PkMAP was blunt in saying that the parliamentary system was under threat, and urged senators from various parties to show up on Monday and pass the bill in order to end the confusion. “Parliament is facing a threat from people who had never accepted this system,” he said, referring to the two-week long sit-in at Faizabad.

Azam Musakhel said that the bill was being delayed on purpose on orders of the ‘hidden powers’. He added that the bill could not be passed for the third consecutive time, and every time, members from all parties, including the PML-N, had stayed mysteriously absent from proceedings.

Senator Rabbani ruled that the Federal Investigation Agency’s (FIA) report on the implementation of the Pakistan Electronic Crimes Act 2016 should be brought in the House, and thereafter be referred to the relevant committee for in-camera discussion on it. Further, he directed the government to provide complete information during the in-camera proceedings. In his ruling, he observed that it was “sorry state of affairs”, that the FIA report did not adhere to the requirements of the law, and directed the government to formulate the rules for preparing reports for submission to the House in 30 days, and place the same before the senate committee on delegated legislation.

The ruling came after a senator asked whether the FIA’s report could be brought before an open house, or if it had to be treated as a classified document for discussion only in in-camera meeting of the IT committee of the senate. The house will now meet on Monday at 4pm.

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Directorate Intelligence and Investigation (DGI&I)-FBR, Quetta on Tuesday claimed to have seized huge quantity of smuggled cell phones worth Rs 20.9 million. According to official sources, the action was taken on a tip-off, which revealed that some unscrupulous elements were planning to transport huge quantity of smuggled cell phones from Afghanistan to the parts of Pakistan via Quetta.

Reacting on this information, Anti Smuggling Organization (ASO) staff of DGI&I-FBR Quetta was directed to mount strict vigilance at all entry and exit points to avoid such activity. Resultantly, a Toyota Hiace bearing registration no BNB-648 was intercepted near Bellaili check-up located at Quetta Chaman road. After thorough examination, around 950 smart phones worth Rs 20.9 million were recovered. Consequent upon recovery, legal action is being initiated. Further investigation was underway.
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The Senate Standing Committee on Finance has strongly recommended restoring sales tax zero-rating on basic educational stationery items including pencils, pens, exercise books, and sharpeners, etc, in the budget 2017-18. Chairman Finance Committee Saleem Mandviwalla took up the issue of sales tax status on stationery items during meeting of the committee on Monday to review Finance Bill 2017.

He said, “I thought that the issue of stationery sector had been resolved last year, but it is still pending. The committee recommends restoring sales tax zero-rating on stationery items through an amendment in the Finance Bill 2017.” The chairman Stationery Association briefed the committee members that these items have never been taxed until Finance Act 2016, which imposed a full 17 percent non-adjustable sales tax on local manufacturing, and it resulted in closing down of local pencil industries. It was further stressed that the Federal Board of Revenue (FBR) is fully cognisant of the gravity of the situation.

The FBR members admitted the fact that the input tax has indeed been made non-adjustable which is a burden on local industry, making it uncompetitive vis-�-vis imports. As an alternate, it was proposed by the FBR that some sort of regulatory duty may be imposed on imports. The idea, however, was not appreciated by the committee members and stakeholders owing to the fact that these items are so important to pursuance of basic education that these cannot even be thought of being taxed at the outset, let alone further adding up to the burden on poor education seekers, by imposing additional customs duty on their everyday requisites.

It was further discussed that state is under a constitutional obligation to provide compulsory education and its requisites free of cost, which include educational stationery. (Articles 25A and 37(b) of the Constitution, read with the National Education Policy, page 13). It was also questioned as to how the government can afford to tax basic items which otherwise the government is supposed to provide free of cost? Senator Mohsin Aziz supported the industry that basic stationery items should be zero-rated to facilitate general masses. The stationary items should be zero-rated or RD to impose on imported items, he suggested. After due consideration to the proposal, the committee agreed to recommend the restoration of sales tax zero-rating on educational stationery.
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