PRO 12-07-2012_Layout 1 7/14/2012 4:43 AM Page 1
Saturday, 14 July, 2012
FBR admits missing collection target by Rs 32b ISLAMABAD
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HE Federal Board of Revenue (FBR) has officially admitted its failure to achieve annual collection target of Rs.1952 billion set for financial year 2011-12 as it has collected Rs.32 billion less amount then its target. FBR spokesman Riffat Shaheen said that the tax authority has collected rs.1,920 billion during fiscal year 201112 against its set target of rs.1,952 billion which shows Rs.32 billion shortfall. She said Federal Board of Revenue could not announce collection date officially so far due to books adjustments which in routine takes 10 to 15 days but it would be released in next two to three days. “Credit should be given to tax authorities for crossing the sociological fig-
Japan hosting Pakistan investment seminars in 3 cities ISLAMABAD
faulter taxpayers with the sole aim to achieve annual tax collection target of Rs.1952 billion the FBR also announced amnesty schemes in May 2012 which did not help at large the tax authorities to get its overambitious target of revenue set for fiscal year 2011-12. According to an official tax collection target of rs.1,952 billion was of course much difficult, tough and steep decline in revenues is being witnessed, however, FBR has left no stone un-
ure of Rs.1900 billion revenue collection,” she said, adding that tax collection target did not revise even a single time throughout the financial year 2011-12 whereas it was revised 3 times as compare to last fiscal year. Riffat Shaheen said despite depressive economic situation in the country tax authority collected Rs.1920 billion what she termed a great achievement for Federal Board of Revenue. In order to get billion of rupees from de-
turned to reach its nearest. Independent economists have said that the government missed annual revenue collection target set for the 2011-12 due to challenges ranging from militancy to energy. According to them FBR tax collection target of Rs1952 billion was a non-starter even with the collection of Rs1588 billion in 2010-11. “Tax authorities were insisting throughout the year for achieving its target despite the fact that economy was growing with only 3 per cent then how it was possible for FBR to get its set target,” they added. It may be recalled that during current fiscal year 2010-11, nation had witnessed a baffling situation when on June 30, 2011, the then Chairman FBR Salman Siddique claimed that the collection surpassed the target and collected Rs1, 590 billion, but the irony of fate was that it was proven incorrect.
Introduction of Islamic dirham, dinar urged to get rid of usury
Online
ISLAMABAD
Ambassador of Japan to Pakistan, Mr. Hiroshi Oe on Friday said Japan considers Pakistan as a major development partner and the two countries will continue to support each other as true friends. Japan will continue to provide financial and technical assistance to Pakistan as we believe that this country has a great potential for the future. There are spectacular development and investment opportunities in various fields as few countries are gifted with such natural and human resources, the Ambassador said. Ambassador Hiroshi Oe said this while talking to Chairman FPCCI Standing Committee on Diplomatic Affairs Chairman Sheikh Humayun Sayeed who called on him. Chairman Media FPCCI Malik Sohail, Chairman Coordination Atif Akram Sheikh and First Secretary Takashi Shimokyoda were also present on the occasion. “Pakistan is facing difficult challenges which will be over soon,” he said adding that he will continue to strive to deepen mutual understanding through economic, educational, cultural and political exchanges. Hiroshi Oe said that increasing population and negative perception is a problem that should be tackled on urgent basis. Sixty Japanese companies are operating in Pakistan, 1400 in Thailand and around 400 in India, he added. He informed Japan Government is hosting investment seminars for Pakistan by end August, in Tokyo, Osaka and Nagoya. A delegation of Japanese Chamber of Commerce will start exploring opportunities in Karachi, Lahore and Islamabad from 16th July. The delegation will also meet President Zardari besides meeting different senior officials in a meeting at the Ministry of Commerce, they envoy said. In October, another trade mission is coming to Pakistan comprising representatives of main Japanese companies who will visit Karachi, Islamabad, Sialkot and Lahore. At the occasion, Sheikh Humayun Sayeed said that Japan is an important friend whose role in development of different sectors is laudable.
APP
Renowned Malaysian currency expert Sheikh Umar Ibrahim Vadillo has urged for introducing Islamic dirham and dinar in the economic system to get rid of usury (Riba). Addressing the students and researchers here in his lecture titled “Towards Just Monetary System: Introducing dirham and dinar currency” organized by Islamic Research Institute (IRI) in collaboration with International Institute of Islamic Economics and Shariah Academy, Sheikh Vadillo also urged the government of Pakistan to implement the system of dirham and dinar in the country. He said that the Muslim countries should adopt the system of gold and silver currency which would automatically devalue the US dollar. “It cannot be devalued by government decree, and unlike paper currency, it is an asset which does not depend upon anybody’s promise to pay”, he said adding that with use of gold and silver currency there would be zero inflation. Vadillo said all forms of paper assets including currency, bonds, shares, and even bank deposits are promises to repay money borrowed. Their value is dependent upon the investor’s belief that the promise will be fulfilled. “Gold is not like this. A piece of gold is independent of the financial system, and its worth can not be denied any time”, he added. Vadillo further said Dr. Mahatir Mohammad of Malaysia is also in favor of dinar and dirham system
and he asked the Muslim countries not to sell their precious oil to the world for US dollars but sell it for gold. Dr Masoom Yasinzai Rector International Islamic University said on the occasion that Islam is complete way of living and the Muslim Ummah can introduce new economic system that can be followed by the whole world as people across the world are fed up of the current prevailing so called economic systems. “The world tried socialism that collapsed, the world is now trying capitalism that is also about to collapse”, Dr. Masoom added.
Simple tax procedures will improve tax collection: iCCi ISLAMABAD Online
Islamabad Chamber of Commerce and Industry (ICCI) has urged the newly appointed Chairman Federal Board of Revenue, Ali Arshad Hakeem to take measures for simplifying the complex and complicated taxation procedures, which will help in improving the tax revenue for the country. Yassar Sakhi Butt, President ICCI made these remarks during a meeting at Chamber House. He said that the complicated tax procedures were creating troubles for the businessmen and FBR should facilitate taxpayers for making these procedures more simple and easy. He said that businessmen were facing many challenges due to multiple factors like energy outage, rising inflation and deteriorating law and order situation. Therefore, they should be facilitated to expand businesses as revenue collection lies in the promotion and growth of business activities. ICCI President was of the view that the solution to slow economic growth lies in the revival of progressive taxation policies and improved tax collection system. He urged the Government to broaden the tax net by bringing all the sectors into the tax net which were currently not being taxed and rendering a permanent revenue shortfall in the National Exchanger. He said that country’s tax-to-GDP ratio had since long been declining and ultimately it registered around 10 percent of the GDP during last fiscal year. ICCI President added that developed countries have tax-to- GDP ratio from 30 to 40 percent, most of the developing economies from 15 to 25 percent like in India; this ratio stands at 15 percent and Bangladesh at 14.5 percent. He urged the Chairman FBR to increase the tax-to-GDP ratio by overhauling the tax system and making the system justifiable and equitable. Yassar Sakhi Butt said indirect taxes currently account for more than 60 percent of the total revenues while direct taxes to GDP ratio was merely 2 percent which has been badly affecting consumer spending that is a key driver of economic growth. He said that proactive measures should be introduced to plug the leakages and loopholes in the prevailing tax system rather than adopting the policy of increasing the tax base through broadening the ratio of indirect taxes.
SECP, KSE meet to boost capital market KARACHI STAFF RePORT
A meeting of the Securities and Exchange Commission of Pakistan (SECP) headed by the chairman, commissioner and other senior officials of the SECP was held with the Board of Directors, management and senior members of the Karachi Stock Exchange. The meeting discussed important capital market development matters and measures for enhancing activity at the Exchange by supporting retail participation. The apex and front line regulators reviewed various international best practices for the overall growth of the market and deliberated upon areas of investor protection, expansion of market outreach, new product development in equity, debt and derivative segments, activation of leverage products for improved liquidity, effective risk management and market monitoring and surveillance etc. While highlighting recent reforms in
the market including revamping of Capital Gains Tax regime, introduction of revised Code of Corporate Governance and demutualization of stock exchanges, the SECP chairman emphasized upon the Exchange to take expeditious steps to put in effect already agreed scheme of arrangements for enhancing brokers’ capacity to execute business. Under the said scheme each active broker would be allowed an amount of Rs 50 million to be utilized against bank guarantee from the Clearing House Protection Fund as margins/collateral against their trades. It was, however, emphasized that in line with international best practices risk management needs to be consolidated and shifted to NCCPL with a settlement guarantee fund so as to support NCCPL to function as a central counter party. A committee of the stock exchanges and NCCPL was constituted to finalize necessary modalities for the same and submit its recommendations to the SECP. Fur-
ther to support liquidity in the market, generate healthy activity in leverage products like Margin Trading and Securities Lending and Borrowing, it was agreed that these products would be reviewed in detail to identify and address issues hindering the participation of investors. Also, to revive investors’ confidence and affectively address claims of investors pertaining to 2008 market situation, further
enhancement of contribution from IPF for each default and expulsion was recommended by the SECP for consideration of the Exchange’s Board of Directors. Other areas that were mutually agreed by the regulators include: Taking appropriate measures to promote intraday/day trading, following principles adopted internationally, that will assist in enhancing trading activity.
PRO 12-07-2012_Layout 1 7/14/2012 4:43 AM Page 2
Saturday, 14 July, 2012
KSE sheds 69 points after Moody’s rating KARACHI STAFF RePORT
Friday saw the Karachi share market shedding 69 points because of, what the market observers viewed, the investors’ concern for a possible downgrading of the foreign and local currency bond ratings by the international credit rating agency, Moody’s. Share trading at the Karachi Stock Exchange (KSE) witnessed an across-the-board panic selling during the second half on the back of major corporate earning announcements that are due next week. “Stocks closed lower amid concerns for downgrade of foreign and local currency bond ratings to Caa1 from B3 by Moody’s on macroeconomic concerns,” said Ahsan Mehanti, a senior stocks analyst and director at Arif Habib Securities. On last trading day of the week, the benchmark 100-share index slid by 69.45 points or 0.48 percent to close at 14,332.29 points against Thursday’s 14,401.74. The intraday high and low stood, respectively, at 14,482.37 and 14,313.87 points. “Panic selling witnessed in the second session in stocks across the board ahead of major corporate earning announcements at KSE due next week,” Mehanti said. The trading turnover marked a slight improvement and stood at 111.919 million shares compared to 109.104 million of the previous trading session. In value terms, however, the share trading set in red zone by dipping to Rs 4.425 billion from Rs 4.629 billion a day earlier. “Institutional support witnessed in blue chip stocks on improvement in Pak-US relation despite concerns for SC action for NRO implementation case against the PM,” the analyst added. The market capitalization also ended up in negative zone and shrank to Rs 3.654 trillion as against Rs 3.671 trillion on Thursday. The free-float KSE-30 index also closed lower at 12,402.31 points against the previous 12,492.03 points, losing 89.72 points. D.G Khan appeared as a volume leader and counted its traded shares at 24.177 million each priced at Rs 43.06 in the opening and Rs 43.49 in closing.
EurozonE crIsIs dampening developing Asia’s growth prospects ISLAMABAD
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UROPE’S worsening financial and banking crisis and a sluggish recovery in the United States are weighing on developing Asia’s growth prospects, according to figures released by the Asian Development Outlook Supplement. “Economic growth in developing Asia moderated during the first half of 2012 as slower growth in the US and euro area reduced demand for the region’s exports,” the report says. “Worries over the economic strength of important developing economies have also emerged recently.” ADB’s latest figures predict developing Asia will expand by 6.6 per cent in 2012 and 7.1 per cent in 2013, lower than the 6.9 per cent and 7.3 per cent forecast in ADB’s Asian Development Outlook. In addition to the impact of Europe’s malaise, the region’s development in the first half of the year has been hampered by slower growth in the two largest economies—the People’s Republic of China (PRC) and India—as
SECP launches new Takaful rules
well as the effect of the unwinding of policy stimulus in some countries. The PRC has seen a fall in net exports, industrial production, and in fixed asset investment, although government spending on health, education and big infrastructure projects should give the economy something of a boost. As the PRC moves to a more sustainable growth model, growth may slow down more than expected. ADB is predicting that gross domestic product in the PRC will increase by 8.2% in 2012 and 8.5% in 2013. In April, an 8.5% expansion was forecast for 2012, rising to 8.7% next year. India’s outlook, meanwhile, is clouded by a combination of high inflation and poor demand, both externally and internally. Inflation is expected to persist, primarily due to accelerating food prices. India’s economy is now expected to grow by 6.5% in 2012, down from the previous forecast of 7.0%. In 2013, growth should go up to 7.3%, less than the previously expected 7.5%.While the weaker global environment is expected to affect growth in Southeast Asia, domestic demand and reconstruction activities should keep growth robust.
02 Business Major Gainers compAny Rafhan Maize Prod. Colgate Palmolive Nestle Pakistan Ltd. Sanofi-Aventis Pak ICI Pakistan
opEn 3200.00 1202.88 4104.00 184.50 131.07
HIgH 3359.89 1239.99 4149.00 193.70 137.62
Low 3224.00 1200.00 4050.01 185.00 137.62
cLosE 3327.73 1239.95 4135.00 193.22 137.62
cHAngE TurnovEr 127.73 172 37.07 246 31.00 27 8.72 1,931 6.55 6,689
Major Losers UniLever Pak Siemens Pakistan Akzo Nobel Pak. Millat Tractors Engro Foods Ltd.
7213.50 680.40 131.07 491.97 69.86
7200.00 680.00 124.52 494.00 70.34
7110.00 665.00 124.52 475.00 66.37
7110.00 666.57 124.52 486.91 66.50
-103.50 23 -13.83 1,183 -6.55 563 -5.06 15,576 -3.36 6,398,960
Volume Leaders D.G.K.Cement Fauji Fert Bin Fatima Fertilizer Co Engro Foods Ltd. NIB Bank Limited
43.06 40.60 25.09 69.86 2.19
44.30 40.80 25.34 70.34 2.35
43.07 38.61 24.85 66.37 2.15
43.49 38.72 25.00 66.50 2.32
0.43 24,177,207 -1.88 10,554,509 -0.09 7,423,303 -3.36 6,398,960 0.13 6,104,879
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.3568 145.7530 1.1906 115.1342
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
KARACHI STAFF RePORT
Takaful, the Islamic alternative of insurance is a scheme based on the principles of mutual assistance in compliance with the provisions of Islamic shariah, and which provides for mutual financial aid and assistance to the participants in case of occurrence of certain contingencies and whereby the participants mutually agree to contribute to the common fund for that purpose. The existing Takaful rules were issued in year 2005. During the course of business activity and implementation of these Rules, a number of practical issues were highlighted by the stakeholders. To address these concerns, the Securities and Exchange Commission of Pakistan (SECP) constituted a
Buy
sELL
94.90 114.80 145.93 1.1858 92.42 12.06 25.75 25.25 95.57
95.60 116.11 147.55 1.1989 93.95 12.26 26.01 25.47 98.08
committee in 2007 with a mandate to review the existing Takaful rules and recommend the possible enhancements. The committee laid a special focus on the areas including the coherence with accounting provisions of the SEC (Insurance) Rules 2002, guidelines for allowing conventional insurance companies to do Takaful business through specialized “window” operations, prescribing of percentages in respect of various modes of the Shariah complaint investments for the purpose of determining solvency, among others. The Committee after detailed deliberations finalized and submitted its recommendations based on which the new Takaful Rules have been drafted. The SECP reviewed the draft rules and after seeking expert opinion of Shariah scholars and legal experts, the draft new Takaful Rules have been approved by the SEC Policy Board.
CORPORATE CORNER 72 mw Khan Khwar project to open today
Honda achieves milestone of 200,000 units’ production
These packages offer unique discounts and have been designed to meet the specific needs of the customers. Keeping the ongoing trend alive, Ufone has now introduced 5 Star SMS Offer. Now Ufone valued customers can enjoy 500 SMS free to any network, at any time. To avail free SMS all users have to do is to send 5 SMS on any given day and receive 500 SMS absolutely free for the rest of the day. There is no opt-in or subscription charges applicable for this promotion. PReSS ReleASe
Test rig developed at nusT LAHORE: The 72 mega watt (MW) – Khan Khwar High-head Hydropower Project will formally be inaugurated on July 14. The project will provide 306 million units of low-cost electricity per annum to the National Grid. Annual benefits of the project have been estimated at more than Rs. 2.75 billion. The project has been constructed on Khan Khwar (Nullah), a right bank tributary of River Indus near Besham town in District Shangla of Khyber Pakhtunkhwa province – some 265 kilometers from Islamabad and 350 kilometers from Peshawar on Karakuram Highway. Main component of the project includes a 46-meter high and 112-meter long dam, about 5-kilometer long tunnel, power house and a switchyard. The project is connected with the National Grid through 132/220 Kilo Volt (KV). PReSS ReleASe
LAHORE: Associates at Honda Atlas Cars (Pakistan) Limited had a reason to celebrate as the Japanese automaker added another chapter to its achievement books by rolling out its 200,000th unit. Behind the success are loyal customers backed by workforce that has worked tirelessly at Honda’s production facility to achieve this milestone. The celebration event was attended by Hiroshi Kobayashi, President of Asian Honda Motor and Chief Operating Officer of Honda Asia & Oceania region. PReSS ReleASe
ufone sweeps industry with its ‘5 star sms offer’ ISLAMABAD: Ufone has always been the market leader in the SMS segment and offers the lowest priced SMS bundles to its valued customers.
KARACHi: ZOnG Director Corporate and Sales Ali Kamran, Bitish Deputy High Commissioner Karachi Frances Campbell, JS Bank Manager Corporate and Commutations Syed naveed Rahman in a group photo in Unilever Pakistan lux Style Awards 2012 at expo Centre Karachi. mation for the purpose of improving the decision making process. PReSS ReleASe
RAWALPINDI: NUST School of Mechanical and Manufacturing Engineering (SMME) and M/s Synertech Rawalpindi have jointly designed, developed and manufactured a Test Rig for a public sector organisation to test a D.C electrical system for a large sized vehicle power. The Rig has ability to evaluate performance of high density power systems under varying environmental and operational conditions. PReSS ReleASe
cathay pacific crowned skytrax ‘world’s Best Business class’ KARACHI: Through listening to customers and incorporating their feedback in product design, Cathay Pacific Airways was voted Thursday “World’s Best Business Class” in the annual Skytrax World Airline Awards™ programme, in which more than 18 million airline passengers from across the world picked their choices. PReSS ReleASe
Abacus celebrates 100 successful Erp implementations
RAWAlPinDi: Ali Akbar, Country Director Hashoo Foundation, presenting a commemorative shield to Sudarat T. Attanawin, wife of the Thai Ambassador to Pakistan, on occasion of the Thai Cooking Demonstration arranged by the Hashoo Foundation in collaboration with The Royal Thai embassy in islamabad, at the Pearl Continental Hotel, Rawalpindi, on July 12.
LAHORE: AbacusConsulting, a premier consulting, technology and outsourcing firm, celebrated the successful implementations of one hundred SAP Business One ERP solution across Pakistan. To commemorate the milestone, a grand ceremony was held on 12th of July, 2012 at the Royal Palm Gold and Country Club, Lahore. AbacusConsulting has been providing SAP Business One to small and medium size enterprises throughout the country, enabling them to integrate critical data and obtain easy access to the required infor-
KARACHi: Qatar Airways Chief executive Officer Akbar Al Baker receives the coveted award of World’s Best Airline for the second consecutive year at the annual Skytrax World Airline Awards held at the Farnborough Air Show.