Last update: Wed, 25 May 2016 11pm

BR Research: All


Safe from for the ill-advised government of Pakistan, nobody thinks tax amnesties, immunities, preferential treatments to some over others, exemptions, and perks are what have you actually work. No way could any of it reform the existing tax regime. The voluntary tax compliance launched excitedly by the government ended February of this year and vowed to bring in 1 million traders into the tax base; but traders said no-thanks.
About ten to fifteen years ago, ostrich farming was promoted as the new investment opportunity in Pakistan. A meaningful number of investors, especially in Punjab and Sindh, invested heavily in this emerging industry. But the industry failed to pick up the momentum, and investors suffered severe financial losses. Today only around 70 farms in the country are dedicated ostrich farms, but none of them have any significant amount of birds in them. However, with declining exports and steady growth of Pakistani meat industry, experts are hopeful that trend will reverse itself.
Dars fiscal policies seem to be focused on enhancing tax base and documenting the economy. Steps, such as widening the gap of withholding taxes rates between filers and non filers, especially WHT on banking transactions are supposedly meant to document the economy.
Another day, another inauguration by the Prime Minister Nawaz Sharif. This time around though, it was in Dushanbe. The subject is a 750 km long transmission line, meant to import electricity from Tajikistan and Kyrgyzstan via Afghanistan. The idea is to import 1,000 MW electricity. The total project cost is $1.17 billion. Major financers are the World Bank, European Investment Bank and five others.
This has been a fantastic year for the auto sector, enjoying booming sales with hefty margins. Data released by PAMA for April show car sales going up by 11 percent; from137,206 sales in March to152,229 in April FY16. This is a 26 percent year-on-year growth for 10MFY16. But this is not the big news since month-on-month cumulative car sales have shown a similar trend, growing by 12.5 percent from Jan to Feb FY16 and 13 percent from Feb to March FY16.
Redundant regulation isn't exactly new to Pakistan. We see it in pharmaceuticals, sugar, wheat, and as of April last year, edible oil in Punjab. The retail prices of all 130 brands of vegetable ghee were fixed by the Punjab government in April of 2015, arbitrarily between Rs114-181 per kilogram. Clearly this has a number of ramifications, and BR Research has already discussed these in detail (Read "Punjab's ghee crisis," Published April 21, 2016) whilst also forewarning of a looming shortage in Ramadan. But theres a lot more going on behind the scenes as well.
The bank was on the verge of liquidation when a series of large ticker size bad loans unfolded in 2008. The non performing loans surged to Rs80 billion with majority of advances weakly securitized and made to unviable businesses.