KARACHI: Five Pakistani industries launched protests in seven major cities on Saturday to denounce the withdrawal of a zero-rated sales tax facility in the budget for the fiscal year to June 2020, decrying the move as a “disaster” for the countries export-oriented sectors.
Seeking final approval for an International Monetary Fund bailout, the government’s new budget envisions widespread belt-tightening, a sharp hike in tax revenues and abolished the facility of zero-rated sales tax for the textile, leather, carpets, surgical and sports goods sectors.
A standard rate of 17 percent sales tax will now be imposed on these sectors to generate an expected Rs75-80 billion in additional revenue.
Muhammad Jawed Bilwani, Chief Coordinator of the Value Added Textile Export Sector, said peaceful protests were being held by the industry in Karachi, Lahore, Faisalabad, Sialkot, Multan, Kasur and Gujranwala against the new measure announced in the budget.
The new tax regime, he said, would be “a deadly blow” for exporters' liquidity, create hardships for exporters and threatened to eliminate small and medium sized enterprises.
“Exports will decline to approximately 30 percent in the next fiscal year,” Bilwani said.
The textile sector directly or indirectly provides 42 percent of total employment in urban centers, Zubair Motiwala, a former president of the Karachi Chamber of Commerce and Industry and chairman of the Council of All Pakistan Textile Associations, told Arab News.
Pakistan’s textile exports were $13.38 billion in fiscal year 2017-18 and $11.35 billion in the 10 months of fiscal year 2018-19: “This sector contributes almost 65-70 percent to the overall exports of the country. Does it make sense to disturb this sector?” Motiwala asked.
The surgical goods sector too is worried. State bank data shows Pakistan’s surgical exports stood at $477.2 million in fiscal year 2017-18 while $325.4 million worth of goods were exported during the 10 months of the current fiscal year.
“It was not a well-thought out decision,” Khalil ur Rehman, chairman of the Surgical Instrument Manufacturers Association of Pakistan, said referring to the government’s decision to withdraw the zero-rated facility. “We were not taken on board by authorities.”
Rehman said the government’s move would jeopardize the future of up to 250,000 people associated directly or indirectly with the industry, adding that the sector would now be forced to raise prices and become less competitive in the international market, leading to reduced operations and layoffs.
“The sector can survive for the next 2 to 3 years but after that, if the situation persists, 50 percent of the business would cease to exist,” Rehman said.
Representatives of the carpet manufacturing sector, whose representatives say 99 percent production is exported, also said the industry was struggling to survive. Pakistan exported $84.2 million worth of carpets and rugs in fiscal year 2017-18 and $65.8 million in the 10 months of fiscal year 2018-19.
The decision to withdraw the zero-rated tax facility will “totally collapse exports,” M Naeem Sajid, chairman of the Pakistan Carpet Manufacturers & Exporters Association, told Arab News.
He said Pakistan was facing tough competition in the carpets’ business from Afghanistan, India, and China: “We operate on 10-15 percent profit margin; with a 17 percent sales tax, doing business will not be viable,” Sajid said, adding that this would affect the livelihoods of around 800,000 people.
Syed Shujat Ali, chairman of the Pakistan Leather Garments Manufacturers & Exporters Association, said the sector employed 1.2-1.5 million people who would suffer as the cost of doing business went up by up to 15 percent because of new taxes, which would force the industry to cut down on its workforce and operations.
Leather exports stood at $365.4 million in fiscal year 2017-18 and $241.5 million in the 10 months of the current fiscal year, official data shows.
“The input cost hike will render us uncompetitive in the international market and we may lose our share to our competitors,” Ali said.
Pakistan’s sporting goods sector, which exported goods worth $551.4 million in fiscal year 2017-18 and $425.7 million during the 10 months of the current fiscal year, will also feel the burn of the government’s new measures.
“The government’s decision to abolish the zero-rated tax facility has sent a wave of uncertainty among the people of [the city of] Sialkot where every second person is involved in the sports goods manufacturing,” said Chaudhry Muhammad Arshad, the chairman of the Pakistan Sports Goods Manufacturers & Exporters.
The government had been forecasting growth of 4% for the next financial year, but after Revenue Minister Hammad Azhar delivered his budget speech to parliament on Tuesday evening, the government released a budget document showing it trimmed its growth estimate for the coming year to 2.4%. Inflation, which hit 9% in May, is seen at 11-13% during fiscal year 2019-2020.
“This (2.4 percent growth rate) means unemployment would increase to a large extent because economic growth has already declined by more than half,” senior economist Yousuf Nazar said.
Dr. Ashfaque Hassan Khan, a member of Pakistan’s Economic Advisory Council, added: “Every year 1.5 million new people enter the job market. The 2.4% growth is also equal to population growth rate which means the new entrants are not finding jobs. So the pool of unemployed will keep on rising and this may lead to social unrest in the country and increase poverty.”
Five industries launch countrywide protests as budget strikes down zero-rated tax
Five industries launch countrywide protests as budget strikes down zero-rated tax
- Pakistan government has abolished zero-rated sales tax for textile, leather, carpets, surgical and sports goods sectors
- Economists fear growth expected at 2.4 percent will fuel unemployment, poverty and social unrest
Pakistani naval ships visit Kuwait and Iraq, conduct joint exercises in Arabian Gulf
- Pakistan regularly holds joint exercises with allies to increase synergy and deter piracy, drug trafficking and other illicit activities
- The visit of Pakistan Navy flotilla to Kuwait and Iraq will further enhance the existing diplomatic and naval relations, the military says
ISLAMABAD: Pakistani naval ships have visited Kuwaiti and Iraqi ports to conduct joint exercises with both navies in the Arabian Gulf, the Pakistani military said on Sunday, adding the visits would enhance existing relations.
Pakistan Navy Ships (PNS) Rasadgar and Azmat visited the Kuwaiti port of Al-Shuwaikh, while Pakistan Maritime Security Agency (PMSA) ship Dasht visited the Iraqi port of Umm Qasr, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.
On arrival at both ports, Pakistani diplomatic and host naval officials warmly welcomed the Pakistan Navy ships and the mission commander, along with commanding officers of the ships, held meetings with the naval leadership of both countries.
“Later, naval exercises were also conducted together with Kuwaiti and Iraqi navy ships,” the ISPR said in a statement. “The exercises were aimed at improving mutual cooperation between the navies and developing the capacity for joint operations.”
During the meetings, naval officials discussed matters of mutual interest, cooperation in maritime security and communication, according to the statement.
“The visit of Pakistan Navy flotilla to Kuwait and Iraq will further enhance the existing diplomatic and naval relations with friendly countries,” it read.
Pakistan Navy regularly collaborates and holds joint military exercises with allies to increase synergy, promote regional peace and stability and deter piracy, drug trafficking and other illicit maritime activities.
This month, Pakistan Navy conducted joint naval exercises and drills with Royal Oman ship ‘Alseeb.’ The bilateral naval exercise, “Samar Al-Tayeb,” is conducted regularly between the navies of the two nations.
In July, Pakistan Navy also assumed command of a multinational task force responsible for ensuring maritime security in the southeastern waters of the Middle East, operating in the Arabian Sea, Gulf of Oman and Gulf of Aden.
Pakistan’s army vows to hunt down militants a day after attack kills 16 soldiers
- Pakistan has struggled to contain militancy in its northwest since a fragile truce with Pakistani Taliban broke down in 2022
- Islamabad has frequently blamed the surge in militancy on militants operating out of Afghanistan, Kabul denies the allegation
ISLAMABAD: Pakistan’s army chief, General Asim Munir, on Sunday vowed to hunt down militants waging attacks against security forces and their facilitators, the Pakistani military said, a day after the killing of 16 soldiers in an ambush in the country’s northwest.
Gen. Munir said this during his visit to the South Waziristan district in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province, which has been battling a surge in militancy.
The visit came a day after the killing of 16 soldiers and eight militants during a gunfight in South Waziristan after a group of militants ambushed an army outpost in Makeen area.
Interacting with officers and troops, the army chief commended their resilience and steadfastness in the face of militancy, according to the Inter-Services Public Relations (ISPR), the military’s media wing.
“The army chief highlighted that the courage, resilience, and unyielding determination of Pakistan’s armed forces are the cornerstone of the nation’s sovereignty,” the ISPR said in a statement
“COAS reaffirmed Pakistan Army’s commitment to pursuing Fitna Al Khwarij [militants] which shall continue to be hunted down till its elimination along with the facilitator, abettors and financier who will be made to pay the price for their nefarious activities against the state.”
The brazen raid on the outpost near the border with Afghanistan was claimed by the Pakistani Taliban, who said it was staged “in retaliation for the martyrdom of our senior commanders.”
The development came days after the Pakistani military said it had killed 11 militants in separate operations in KP’s Tank, North Waziristan and Mohmand districts.
Pakistan has witnessed a surge in militancy in KP since November 2022, when a fragile truce between the Pakistani Taliban and the government in Islamabad broke down.
Islamabad has frequently accused neighboring Afghanistan of sheltering and supporting militant groups that launch cross-border attacks. Afghan officials deny involvement, insisting Pakistan’s security issues are an internal matter of Islamabad.
On Saturday, the Pakistani military also urged the Taliban administration in Kabul to ensure robust border management after a group of militants tried to infiltrate from Afghanistan, leading to a skirmish that left four militants and a soldier dead a day earlier.
Pakistan national airline aims to expand its fleet to improve flight operations
- PIA has 23% of Pakistan’s domestic aviation market, but its 34-plane fleet has failed to compete globally
- The airline has faced a lack of direct flights, despite having agreements with 87 countries and key landing slots
KARACHI: Pakistan International Airlines (PIA) is aiming to expand its fleet to improve flight operations, the national flag carrier said on Sunday, following the addition of another Airbus 320.
PIA has 23 percent of Pakistan’s domestic aviation market, but its 34-plane fleet has failed to compete with carriers internationally.
The Pakistani airline has been facing a lack of direct flights, despite having agreements with 87 countries and key landing slots.
“The 11th Airbus 320 AP-BOM has been inducted into the operational fleet with new engines. The aircraft was rolled out from the hangar with new paint and cabin decoration,” PIA said in a statement.
“PIA’s operational fleet will also include long-grounded Boeing 777 and ATR aircraft in the next few days.”
The fleet revival will greatly improve the expansion of PIA’s network and product quality, according to the statement. From this week, PIA has also introduced an in-flight Internet system in domestic flights, which is gaining popularity among passengers.
The airline said strict adherence to flight schedules, providing safe and high-quality products to passengers was its top priority.
“PIA’s flight schedule has achieved 90 percent regularity,” PIA Chief Executive Officer Khurram Mushtaq said. “Measures for operational fleet expansion and product improvement are part of our commitment.”
Earlier this month, PIA said it would resume flights to Europe in January, starting with Paris, after the EU aviation regulator lifted a ban on the national flag carrier.
PIA’s authorization to operate in the EU was suspended in June 2020 over concerns about the ability of Pakistani authorities and its Civil Aviation Authority to ensure compliance with international aviation standards.
The ban cost the loss-making airline 40 billion rupees ($144 million) annually in revenue. Pakistan’s attempts to privatize PIA fell flat this year, when it received only a single offer, well below its asking price.
Pakistani province launches helicopter service to evacuate people, dispatch aid to clashes-hit district
- Clashes between Sunni, Shia tribes have killed over 100 people in Kurram since last month
- On Friday, authorities set a deadline of Feb. 1 for the warring tribes to surrender weapons
PESHAWAR: Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province has launched a helicopter service to evacuate people and transport aid to Kurram district that has been hit by sectarian clashes in recent weeks, officials said on Sunday.
Kurram, a tribal district of around 600,000 near Pakistan’s border with Afghanistan where federal and provincial authorities have traditionally exerted limited control, has been a flashpoint for sectarian tensions between Shia and Sunni tribes for decades.
Fresh clashes that erupted last month have killed more than a hundred people, triggering a humanitarian crisis with reports of starvation, lack of medicine and oxygen shortages following the blocking of the main highway connecting Kurram’s main city of Parachinar to the provincial capital of Peshawar.
In response to the problems being faced by residents, the KP administration has been facilitating travel between Parachinar and Peshawar. On Sunday, two flights evacuated 27 individuals as well as carried 16 government staffers and members of a tribal council, which has been striving to achieve peace, to Kurram.
“There is no fare involved in transportation of people or medicines via the helicopter, rather it is a voluntary service by the KP government to meet the emergency situation,” Nisar Muhammad Khan, a KP government official, told Arab News.
The helicopter service was also being used to dispatch medicines to Parachinar. A day ago, 53 individuals, including 14 patients, were shifted to Peshawar from Kurram via helicopter, according to the provincial authorities.
A third flight was scheduled to bring people stranded in the Tal area back to Parachinar, while five more flights were expected to relocate over a hundred people on Sunday, according to the provincial government.
Chief Minister Ali Amin Gandapur’s office said the government had so far dispatched 1,850 kilograms of medical supplies to Kurram, assuring that it would mobilize all resources to ease problems of the people and ensure durable peace in the region.
The development comes days after the KP authorities set a deadline of Feb. 1 for warring Sunni and Shia tribes in the district to surrender all weapons and dismantle their bunkers to stem sectarian clashes in the region.
The decision was made at a meeting of the KP apex committee, which comprises civilian and military officials, to discuss a sustainable solution to the issue. It allowed the launch of a special air service for temporary evacuation from some parts of Kurram to protect people’s lives, according to the apex committee declaration.
“The agreement outlines that both sides will submit a detailed action plan within 15 days for voluntary submission of weapons,” read a declaration issued after the apex committee meeting.
“All weapons are to be deposited with the local administration by February 1. Additionally, it was decided that all bunkers in the area will be dismantled by the same deadline.”
In the meantime, land routes to the area would be opened intermittently on humanitarian grounds and a mechanism was put in place for secure transportation, according to the statement.
“Personnel of police and Frontier Corps will jointly provide security to the convoys,” it read.
Last month’s clashes erupted after rival tribes attacked convoys of passengers on the Parachinar-Peshawar road, which were followed by attacks on each other’s villages.
The apex committee asked both sides to avoid any violent action in the future to keep the land route safe and open at all times, hoping that the parties would fully cooperate with the government for a lasting solution to the issue.
Champions Trophy preparations in full swing as Karachi stadium upgradation nears completion
- PCB Chairman Mohsin Naqvi says the National Stadium will be ready well before the ICC tournament
- He says the PCB is improving facilities for Pakistani cricket fans to ensure they have a better experience
ISLAMABAD: Preparations for the ICC Champions Trophy 2025 are progressing rapidly, with the upgradation of Karachi’s National Stadium nearing completion, Pakistan Cricket Board (PCB) Chairman Mohsin Naqvi said on Sunday during a visit to the venue.
The tournament, scheduled for February 2025, has been at the center of controversy following India's reluctance to play in Pakistan due to strained political ties.
The International Cricket Council resolved the impasse by approving a hybrid model, allowing India’s matches to be held at neutral venues while other teams play in Pakistan. The decision ensured India’s participation while retaining Pakistan as the official host.
“Remarkable progress has been made in a very short time,” Naqvi was quoted in a PCB statement. “The upgradation of the National Stadium will be completed well before the Champions Trophy tournament.”
During the visit, Naqvi reviewed ongoing projects, including the installation of new seats in enclosures, enhanced parking facilities for 2,700 vehicles and finishing work on the stadium building.
He also instructed officials to expedite the installation of LED lights and scoreboards.
“We are improving facilities for cricket fans to ensure they have a better experience,” he added.
The PCB is under pressure to ensure the country is ready to host the major ICC tournament.
Security concerns and political tensions had previously kept high-profile international cricket events away, but recent improvements in safety and infrastructure have bolstered Pakistan’s case as a venue.
Praising the rapid progress at the National Stadium, Naqvi lauded the project team for their dedication.
“I congratulate the entire team for their outstanding and swift work,” he said.
The Champions Trophy is seen as a pivotal moment for Pakistan cricket, with the PCB aiming to deliver a world-class tournament to reaffirm the country’s ability to host international events successfully.
