Stakeholders decry 18pc GST on EVs against EDB strategy
To promote the Electric Vehicle (EV) revolution in Pakistan, the Ministry of Industries and Production (MoIP) plans to write a letter to the federal cabinet, providing a clear explanation about the General Sales Tax (GST) applicable to EV motorcycles, scooters, and other two-wheelers. This move aims to dispel the “concocted confusion” regarding the 18 percent GST being applied instead of the 1 percent imposed under the government’s EV policy.
Auto sector analysts, experts, assemblers, and dealers expressed concerns to source stating that the confusion began when the Federal Board of Revenue (FBR) issued notices to certain electric scooter manufacturers, despite the policy allowing a 1 percent GST for EV motorcycles. Currently, electric scooter assemblers are being asked to pay the standard 18 percent GST, which contradicts the Electric Development Board (EDB) policy. The EV policy, constituted by the EDB, specifies that GST on two- and three-wheelers should remain fixed at 1 percent for five years, from its implementation in 2021, as part of a broader effort to promote electric vehicles and reduce the nation’s fuel import bill and environmental pollution.
IT Minister: Paksat-MM1 to expand internet access
Minister of State for Information Technology and Telecommunication, Shaza Fatima Khawaja, on Wednesday reaffirmed the government’s commitment to leveraging space technology for national growth at the ‘PAKSAT-MM1 Satellite Application Conference’ celebrating the operationalisation of the PAKSAT-MM1 satellite.
She highlighted that PAKSAT-MM1 would revolutionise communication infrastructure, expanding internet connectivity to remote areas and supporting a digitally connected Pakistan. Digitalisation and technology development, she emphasised, are gateways to socio-economic prosperity.
Khawaja also noted that Pakistan’s ranking in the UN’s e-governance development index had improved by 14 points, making it one of only two Asian countries to advance from the middle to the high tier of digital e-governance.
In SIFC telecom tax dispute lands
The ongoing tax dispute between provincial governments and Long Distance and International (LDI) telecom operators has been escalated to the Special Investment Facilitation Council (SIFC) for resolution. Sources from the Ministry of IT and Telecommunication told the source that provincial taxation policies have raised concerns among LDI operators, leading them to challenge the taxes imposed.
The LDI operators argue that provincial taxes on international incoming voice services exceed the provinces’ constitutional authority. This tax dispute has been a long-standing issue, with neither side able to find a resolution. After failed attempts to reach a consensus, the Ministry of IT decided to bring the matter to the SIFC, seeking a resolution through their intervention.
As reer depreciates exporters to get support
Pakistan’s real effective exchange rate (REER) – the value of local currency as compared to the basket of currencies of trading partners – depreciated 1.26 percent to 100.16 in August 2024, providing support to exporters in competition with peers in regional and global markets.
According to the State Bank of Pakistan (SBP) data, the REER stood at 101.47 in July 2024.
On the other hand, Pakistani rupee appreciated Rs0.09 and closed at Rs278.04 against the US dollar in the inter-bank market on Wednesday. The local currency maintained its winning streak for the sixth successive working day. Despite some depreciation in REER, the global matrix has continued to move around its fair value in the range of 95-105 for the past one year. Earlier, it ranged between 85.6 and 94 over three quarters from January to September 2023.
Salt industry criticises cm Punjab’s export ban
Founding Chairman of the Salt Manufacturers Association of Pakistan (SMAP), Ismail Suttar, has criticised Punjab Chief Minister Maryam Nawaz’s proposed ban on the export of raw pink salt.
He expressed disappointment over the decision, which was made without consulting key industry stakeholders.
Suttar described the move as a potential disaster for the struggling salt industry, urging the chief minister to involve all stakeholders before finalising such policies.
The association had anticipated a meeting with the Punjab government to discuss the implications of the decision but was left out of the process.
Pakistan, Russia to organize latest steel mill in Karachi
The government is considering a proposal for establishing a new steel mill in Karachi with the cooperation of Russia and both countries have agreed to form working groups to push ahead with the project.
In that regard, Russian Federation Deputy Minister of Industry and Trade Aleksei Gruzdev met Minister for Industries, Production and National Food Security Rana Tanveer Hussain on Wednesday.
Pakistan’s minister informed his counterpart that the government had earmarked 700 acres of land of Pakistan Steel Mills (PSM) for setting up the new steel mill.
He said that despite being blessed with considerable reserves of iron ore, estimated at 1,887 million tons, Pakistan was forced to import around $2.7 billion worth of iron and steel.
CPPA-G proposes Rs0.5755 per unit refund
The Central Power Purchasing Agency (CPPA-G) has proposed a refund of Rs0.5755 per unit to power consumers, reflecting a fuel charges adjustment for August 2024. The CPPA-G, representing Ex-Wapda Distribution Companies (XWDiscos), submitted a petition to the National Electric Power Regulatory Authority (NEPRA) seeking approval to pass on this relief to consumers.
According to the petition, the reference fuel charges billed to consumers in August were Rs9.3877/unit, while the actual cost amounted to Rs8.8122 per unit. The CPPA-G has requested that the Rs0.5755 difference be refunded to consumers through their electricity bills. NEPRA has accepted the petition and scheduled a public hearing for September 26, 2024, to finalise the decision.