Latest news with #SaleemMandviwalla
Business Recorder
10-07-2025
- Business
- Business Recorder
Ministry informs Senate body: Revised notification soon to resolve Pakistan-Iran barter trade issues
ISLAMABAD: The Ministry of Commerce, Wednesday, informed Senate Standing Committee on Finance that the revised notification will be issued to resolve all barter trade issues faced by traders between Iran and Pakistan. Officials of the Commerce Ministry updated the committee that the amended SRO will be issued after receiving comments of State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR). Discussing the recent status of barter trade between Pakistan and Iran, officials stated that the Commerce Ministry has initiated barter trade on the basis of mutual understanding between the parties, and the arrangements will be finalized after the approval of FBR and the State Bank of Pakistan. Under the revised scheme, the list will be open for both imports and exports. Chairman of the committee Senator Saleem Mandviwalla directed the Commerce Ministry to end discriminatory treatment with the Mango exporters and allow all exporters to avail export facility and not limited to a particular association. FBR Member Customs (Policy) informed the committee that Ministry of Commerce has issued SRO642(I)/2023to regulate the Business-to-Business (B2B) Barter Mechanism between Pakistan, Iran, Russia and Afghanistan. However, several reservations and concerns have been raised by trade bodes, importers and exporters regarding the operational and procedural aspects of the mechanism. Owing to the issues, the barter trade regime has not taken off and so far only one company has registered for the said regime. These issues are currently under active review and discussion by a joint committee comprising representatives from the Ministry of Commerce, Ministry of Foreign Affairs (MOFA), FBR and trade bodes among others. The aim is to address stakeholder concerns and streamline the implementation of the barter trade framework in a manner that supports bilateral trade while ensuring regulatory compliance. The FBR Member also informed that the issues concerning barter trade furnished by the Collectorate of Customs Appraisement Taftan. There is no mechanism for dispute settlement between importers and exporters in the current barter regime or guaranteeing body at the level of the two states in order to ensure that Pakistani exporter receives the goods against the exported shipment This is as a genuine issue which needs to be reviewed in any future barter trade for which feedback front SBP may be sought. One of the issues which hindered the operations of the barter trade regime is that para 6(1) of the B2B SRO is based on the principle of 'import followed by export'. Added to the said provision is permission to avail concessionary SROs for duty and taxes remissions which can be prone to misuse. The said decision should be lifted to the discretion of the importer and exporter and be made part of the contract instead of the SRO. Moreover, no duty/taxes; remission should he allowed on imports for subsequent exports under the barter regime. FBR Member stated that in terms of the para 5(2) of the currently in place SRO, Pakistan's Mission in the barter partner countries has to certify that the items being traded under the B2B barter trade regime are non-sanctioned. However, so far no such list of items has been furnished to Customs so that the same is entered in the Customs computerized system so as to regulate the imports accordingly. Instead, the SRO only contains an Appendix-A with list of items which are allowed to be imported and exported to/from Iran, Afghanistan and Russia. In case of Pak-Iran bilateral trade, on account of the trade deficit and type of commodities being exported from Pakistan, concerns have been raised by importers as well as Quetta Chamber of Commerce and Industry regarding issues in offsetting the quantum of exports with imports specially in scenarios where majority of our exports consist of primary agriculture products which require sanitary and phyto sanitary standards' confirmation by the host country which sometimes arbitrarily act against our exports Hence, it is proposed that while deliberating upon any new mechanism for barter trade with Iran, guarantees must be sought so that our exports are not subjected to any non-tariff measure, FBR official said. Most importantly, the major stakeholder in the successful implementation of any barter trade regime between Pakistan and Iran are the counter-part governments, therefore, there is a need that their willingness and readiness to any barter trade procedure/regime may be prior to issuance of any new notification, FBR Member added. Copyright Business Recorder, 2025
Express Tribune
10-07-2025
- Business
- Express Tribune
Incentive cuts may hit remittances
Listen to article State Bank of Pakistan (SBP) Acting Deputy Governor Dr Inayat Hussain cautioned on Wednesday that the government's decision to curtail subsidies for promoting foreign remittances, which hit a record $38 billion, may reduce the flow through banking channels. The statement came amid a disagreement between the federal government and the central bank on shouldering subsidies in the new fiscal year 2025-26 under the Pakistan Remittance Initiative (PRI). The finance ministry has not allocated any sum for the scheme while the central bank has also shown its inability to provide funds. The steps that the government has taken will push remittances back to the informal sector, said Inayat Hussain while speaking during a meeting of the Senate Standing Committee on Finance. Headed by Senator Saleem Mandviwalla, the committee had called the SBP to explain the reasons behind the faster increase in subsidies compared to remittances. In the past few years, the subsidies increased five times compared to a rise of only two times in remittances, said Mandviwalla. The central bank reported on Wednesday that workers' remittances rose 26.6% to $38.3 billion in the just ended fiscal year. Pakistan became the fifth largest recipient of foreign remittances in the world. The Pakistan Peoples Party government launched the PRI in 2009 when the amount remitted by overseas Pakistanis was just $7.8 billion. Remittances are now the single largest source of foreign earnings, which are even $6 billion higher than exports. However, last month the government substantially reduced the remittance incentives and allocated nothing in the budget for this fiscal year compared to Rs85 billion for the last fiscal year. Against the Rs85 billion allocation, the central bank billed Rs200 billion to the Ministry of Finance. Of the total cost, around 85%, or Rs170 billion, was under the Telegraphic Transfer (TT) Charges Scheme. Additional Finance Secretary Amjad Mehmood told the standing committee that the federal cabinet had approved a revision of the scheme following a summary moved by the finance ministry. The development came amid increasing pressure on the rupee, which further depreciated to Rs284.5 in the inter-bank market. In the open market, the rate was around Rs288 per dollar while in the grey market, the rate crossed Rs290, according to market players. The central bank issued a circular last week about revisions in the remittance scheme, which shows a substantial reduction in benefits for banks and exchange companies. Inayat Hussain told the committee that the government raised the minimum eligible transaction size to $200 and introduced a flat rebate of 20 Saudi riyal (SAR) per eligible transaction, effective from July 1, 2025. The old rate was from SAR20 to SAR35, which the government has cut by 43%. The TT Charges Scheme offers a zero-cost and free transfer model to the sender and receiver for eligible remittance transactions. The old model offered SAR20 reimbursement incentive for every transaction worth $100 and above, an additional per-transaction incentive of up to 10% on growth over the previous year and a further per-transaction incentive of SAR7 for growth exceeding 10% over the previous year. The federal government also decided that a mechanism should be established for gradually phasing out the Remittance Incentive Schemes. In that regard, the SBP would propose and present an evidence-based plan by factoring in the cost-benefit analysis of the existing schemes, Raast integration with Buna and SAMA gateways, and strengthening controls vis-a-vis the transfer of remittances through formal channels. The central bank deputy governor expressed concerns over these changes and any future plan to discontinue the scheme. "The scheme is very critical in bringing remittances from the informal sector to the formal sector," he emphasised. The government has also abolished the Exchange Companies Incentive Scheme (ECIS) under which these companies were getting up to Rs4 per dollar subsidy from the government. People were attributing the increase in remittances to the Financial Action Task Force (FATF)-related measures by foreign governments but the fact is that remittances were so small that these do not fall under the FATF purview, said Hussain. The deputy governor said that it was wrong to say that only banks were benefiting from the scheme as foreign remitters were also the beneficiaries. Despite reducing the benefits from July 1, the Ministry of Finance has not allocated any money for the remittance scheme.
Business Recorder
09-07-2025
- Business
- Business Recorder
Chinese envoy meets Mandviwalla
KARACHI: Shi Yuanqiang, Charge d'Affaires of the Embassy of the People's Republic of China, called on Senator Saleem Mandviwalla, Chief Whip of the Senate, at his office in Senate. During the meeting, matters of mutual interest, bilateral cooperation, and regional developments were discussed. Both sides reaffirmed the strong and time-tested friendship between Pakistan and China, emphasizing continued collaboration. Senator Mandviwalla appreciated China's consistent support to Pakistan and underscored the importance of parliamentary diplomacy in further strengthening bilateral relations. Copyright Business Recorder, 2025
Express Tribune
22-06-2025
- Business
- Express Tribune
Senate rejects 18% tax on solar panels
Listen to article The Senate has approved with a majority vote the report of its standing committee on financerejecting an 18% tax on solar panels, sales tax on homeopathic items and stationery, and tariffs on the steel sector. In its report, presented in the upper house of parliament on Saturday, the committee also opposed increased taxation on 800cc vehicles, suggesting a 12.5% cap. It proposed no increase in tax on print media and IT services and urged that taxes on services falling under provincial jurisdiction be reconsidered. It also called for a review and further increase in government employees' salaries. The committee also proposed setting the minimum wage at Rs40,000 or Rs50,000 and exempting income tax for monthly salaries up to Rs100,000. The Senate session began under the chairmanship of Deputy Chairman Syedaal Khan Nasar. During the session, Senate Standing Committee on Finance Chairman Saleem Mandviwalla, presented the report containing the budget proposals and recommendations. Earlier, Senate Leader of Opposition Shibli Faraz objected that the report had not been presented to them earlier and questioned how a 100-page document could be read and reviewed in 10 minutes. He criticized the government for not reducing its expenditures and instead taxing those already burdened with taxes. Responding to the criticism, Senator Mandviwalla stated that he had remained in contact with Shibli and Mohsin Aziz of the PTI. He said all parties, including the PML-N, the PPP, and the PTI, participated in the discussions, offered suggestions, and voiced their concerns. He said the committee staff worked till 2 am and while the draft may not have been shared due to an oversight, all recommendations in the final version reflected the committee's discussions. Concluding the budget debate, Finance Minister Muhammad Aurangzeb acknowledged the valuable, balanced, and constructive input provided by senators over the past one and a half weeks. He said this consultation helped guide the government's economic policies and reinforced its commitment to transparency, fiscal responsibility, and sustainable development. "During the past fiscal year, no mini-budget was introduced, inflation was brought under control, foreign reserves increased, and the current account improved significantly," he added. He announced tax relief for salaried individuals earning between Rs600,000 and Rs1.2 million annually by reducing the income tax rate from 2.5% to 1%. This, he said, was a symbolic and practical gesture to show that the government does not wish to overburden the middle class. He also announced a 10% increase in government employees' salaries and a 7% raise in pensions. Taxes on agricultural pesticides were removed, and, following the prime minister's direction, 1,000 graduates would be sent to China for further opportunities. Regarding solar panels, the finance minister said the proposed 18% sales tax on imported parts was meant to protect local industry and create a competitive environment for solar technology investment in Pakistan. However, after consultation, the government decided to reduce the tax to 10%, applicable only to 46% of imported components, resulting in a 4.6% price hike for imported panels. He warned against profiteering, noting that some opportunistic elements had already begun increasing prices before the tax's implementation. He assured that the government would take strict legal action against such exploitation in the public interest. Aurangzeb said the relief and social protection measures included in the 2025-26 budget are not merely temporary reliefs but a practical reflection of the state's recognition and acceptance of its responsibilities. "A key measure is the increase in the budget of the Benazir Income Support Programme (BISP) from Rs592 billion to Rs716 billion. "Expanding the scope of financial assistance under BISP reflects the government's commitment to providing economic protection to the most vulnerable segments of society," he added.
Business Recorder
21-06-2025
- Automotive
- Business Recorder
Import of up to 5-year-old used vehicles allowed with 40% extra tariff
ISLAMABAD: The government has allowed import of up to five-year-old/used vehicles imported in commercial quantities along with 40 percent additional import tariff in budget (2025-26). During review of Finance Bill (2025-26) on Friday, Ministry of Commerce Secretary Jawad Paul informed Senate Standing Committee on Finance that the time period for the import of old/used vehicles under the baggage scheme has not been changed and overseas Pakistanis would continue to import three-year-old vehicles under baggage scheme. The facility of five years has only been extended on the commercial import of old and used vehicles. From September 1, 2025, the commercial import of five years old vehicles would be allowed. Tariff rationalisation: Rs500bn revenue loss estimated However, there would be an additional tariff protection of 40 percent on such vehicles in 2025-26. In the next four years, the 40 percent additional import tariff would be zero on the import of used and old vehicles. The 40 percent additional import duties during 2025-26 would be reduced to 30 percent in subsequent fiscal year and finally zero-percent duty in coming years. In future, the import of 6-7 years old vehicles would also be allowed. The quantity and standards would be maintained to ensure that old and used vehicles should not create environment related problems in the country. Chairman of the Senate Standing Committee on Finance Saleem Mandviwalla stated that the same time period of five years should apply on the import of vehicles under the baggage scheme as well as commercial import of vehicles. The government should give same treatment on the import of vehicles by overseas Pakistanis and commercial importers. However, the government must ensure that 40 percent additional tariff should not be applicable on the import of five years old vehicles under the baggage scheme. There should be no distinction between the vehicles imported under the baggage scheme and commercial imports, Mandviwalla maintained. The commerce secretary stated that the gift scheme is being misused on the import of old and used vehicles. The tariff reductions would be applicable on new auto sector policy after June 30, 2026, he said. Finance Minister Muhammad Aurangzeb said that we have given enough tariff protection to domestic sectors/industries. The FBR Member Customs Policy stated that the government has not touched auto sector during tariff rationalisation during 2025-26. The government has reportedly received No Objection from International Monetary Fund (IMF) for import of five-year old used cars in the country, sources in Commerce Ministry told Business Recorder. The import of used cars will commence from September 2025 on commercial basis as current regime of import of three-year old used cars by overseas Pakistan will be discontinued. The decision has been taken in light of proposals prepared by the Federal Board of Revenue (FBR) which was making hectic efforts to allow import of five-year used cars aimed at increasing its revenue through imports. However, the issue of arrangement of foreign exchange will be a gigantic task as State Bank of Pakistan (SBP) will not remit forex for import of five-year used cars due to difficulties. Local auto industry, mainly dominated by the Japanese companies had opposed the proposal at every level but FBR did not agree citing different reasons. The government will gradually phase out regulatory duties and slash tariffs on Completely Built-Up (CBU) vehicles to below 10 percent, with a broader goal of bringing auto-sector tariffs down to single digits within five years. The personnel baggage scheme, transfer of residence and gift scheme were reportedly misused on the import of old and used vehicles. Under the law, overseas Pakistanis are entitled to import vehicles under personnel baggage scheme, transfer of residence and gift scheme who have not imported, gifted or received a vehicle during the last two years under Import Policy Order (IPO), 2022. The Customs department will not charge 18 percent sales tax on auction of serviceable old and used vehicles in case sales tax was paid at the time of local or import stage. Copyright Business Recorder, 2025
