Morning Briefing for Jan 16, 2012 – Standard Capital

Karachi: On CGT waiver SECP fails to woo NA body

The Securities and Exchange Commission of Pakistan (SECP) has proposed two‐year exemption on capital gains tax besides reduction in corporate tax rate at 35 per cent at present.

According to Standard Capital, this was proposed by chairman SECP Muhammad Ali while giving its presentation to National Assembly Standing Committee on Finance here on Thursday which met under the chair of member National Assembly Member of the committee suggested the committee that before sending summaries to finance ministry the matter should be discussed in another meeting where finance ministry, Federal Board of Revenue (FBR)and other relevant officials called for discussions to check whether tax exemptions on capital gains tax were applicable or not? The chairman SECP informed the committee that six months back work on company law has been initiated while work on pension and NBFC law would be initiated during current year.

Forex reserves ease to $16.9bn
Pakistan’s foreign exchange reserves eased marginally to $16.90 billion in the week ending January 6, from $16.92 billion the previous week, the central bank said on Thursday. Reserves held by the State Bank of Pakistan (SBP) fell to $12.82 billion from $12.88 billion a week earlier, while those held by commercial banks rose to $4.08 billion, compared with $4.04 billion the previous week.

Foreign exchange reserves hit a record $18.31 billion in the week ending July 30, but have since eased due to debt repayments. Reserves were boosted in June last year by inflows of $411 million, including a $191.9 million loan from the World Bank, and a $196.8 million loan from the Asian Development Bank.

Standing Committee on Finance: SECP to devise medium, long‐term market development plans
Plans to finalize drafts of new Companies Law, Insurance Law, NBFI’s Law and Pension Law in one year Some proposed legislations like Securities Act, Demutualization of Stock Exchanges Act are passing thru parliament Securities and Exchange Commission of Pakistan (SECP) here on Thursday informed the National Assembly (NA) Standing Committee on Finance that SECP is finalizing three years Stock Market Development Plan and a ten year Financial Market Development Plan to move ahead for economic development of the country in predictable manner.

Settlement of GST on tractors assured
Millat Tractors produced and sold 963 and 724 units of Massey Ferguson tractors in December 2011 as compared to 2,460 and 2,211 units in November 2011. Production and sales in July‐ December 2011 fell to 9,760 and 9,005 units as compared to 20,411 and 20,510 units in the corresponding period of 2010Federal Minister for Industries has assured the vendors and tractor makers of resolving the lingering issue of 16 per cent general sales tax as early as possible.

In a meeting with the delegation of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), led by its chairman, held in Lahore on Thursday, the minister said he was fully aware of the situation. told Dawn that the minister had assured the stakeholders of taking every step to restore the production activities.

The makers of Fiat tractors had already suspended its production from December 15, 2011, while the makers of Massey Ferguson tractors had partially resumed its production from January 10, 2012 after suspending production from December 20, 2011.