Category: Business

The most important business news, explained in a young, easy to understand way. News that affects young career professionals.

  • Rupee devaluation, GST hike forces Honda to increase car prices up to Rs1 million

    Rupee devaluation, GST hike forces Honda to increase car prices up to Rs1 million

    Honda Atlas Cars Limited (HACL) has announced its fourth price hike in less than 90 days, citing the government’s implementation of a 25 per cent general sales tax (GST) on luxury items.

    This time, the automaker has raised car prices up to Rs1 million. According to a recent notification, HACL has attributed the most recent price hike to the devaluation of the Pakistani rupee against the US dollar, as well as the increase in sales tax from 18 per cent to 25 per cent.

    Below are the new ex-factory and provisional prices that are applicable from March 14, 2023:

    Model Old Price (Rs) New Price (Rs) Increase (Rs)
    Honda City M/T 1.2L 4,579,000 4,799,000 220,000
    Honda City CVT 1.2L 4,729,000 4,929,000 200,000
    Honda City CVT 1.5L 5,019,000 5,549,000 530,000
    Honda City Aspire M/T 1.5L 5,229,000 5,759,000 530,000
    Honda City Aspire CVT 1.5L 5,419,000 5,979,000 560,000
    Honda BR-V CVT S 5,949,000 6,529,000 580,000
    Honda HR-V VTi 7,199,000 7,899,000 700,000
    Honda HR-V VTi S 7,399,000 8,199,000 800,000
    Honda Civic 1.5L M-CVT 7,779,000 8,599,000 820,000
    Honda Civic 1.5L Oriel M-CVT 8,099,000 8,949,000 850,000
    Honda Civic RS 1.5L LL-CVT 9,199,000 10,199,000 1,000,000
    Latest Honda Car prices in Pakistan – effective from 14 March 2023
  • Pakistan reaches out to US for assistance in obtaining IMF deal

    Pakistan reaches out to US for assistance in obtaining IMF deal

    Pakistan has requested assistance from the United States to obtain “lenient treatment” from the International Monetary Fund (IMF) due to a delay in signing the staff-level agreement (SLA).

    The international lender has asked Pakistan to confirm external financing needs of $6 to $7 billion from Saudi Arabia, the United Arab Emirates, Qatar, and multilateral creditors until the end of June 2023.

    However, Pakistan has been unable to persuade the lender to sign the agreement and has requested assistance from Washington and its western allies.

    According to The News, Minister for Finance Ishaq Dar has contacted the US diplomatic corps based in Islamabad for help in ending the stalemate.

    The IMF considers that the loan facility’s “sustainability” could not be guaranteed without full assurance of external financing.

    Furthermore, the IMF has demanded a permanent abolition of power sector subsidies, which the government had only committed to until the end of the next financial year 2023-24.

    The IMF demanded changes in the wording of the Memorandum of Economic and Financial Policies (MEFP) during the last meeting held in the previous week.

    The IMF and Pakistani sides are yet to decide on further proceedings, with each side holding the other responsible for the delay in signing the SLA.

  • Punjab govt to provide free flour to 15.8 million deserving households during Ramzan

    Punjab govt to provide free flour to 15.8 million deserving households during Ramzan

    Prime Minister (PM) Shehbaz Sharif has announced a scheme to provide free flour to impoverished individuals during the holy month of Ramzan. The premier stated that the distribution of free flour will encompass 15.8 million households throughout Punjab from 25 Sha’ban to 25 Ramzan.

    To ensure effective implementation of the scheme, the Prime Minister directed the utilisation of 8,500 utility stores and the establishment of an additional 20,000 distribution points for public convenience.

    Moreover, PM Shehbaz stressed the need for the transparent and modern distribution of free flour among the poor while also emphasising that the quality of flour provided should be of the highest standards.

    Eligibility for the program can be confirmed through SMS, and the federal government will also support other provinces in this regard.

    During a review meeting to discuss the distribution of free flour under the Ramzan package, chaired by the Prime Minister himself, the Punjab government provided a detailed briefing on the program.

    The meeting was attended by the Caretaker Chief Minister Punjab Syed Mohsin Raza Naqvi, Adviser to the Prime Minister Ahad Cheema, and other relevant senior officials.

    This decision is expected to bring much-needed relief to the underprivileged during the holy month of Ramzan. By utilising modern technology and additional distribution points, the distribution of free flour can be carried out efficiently and transparently, ensuring that the benefits reach those who are most in need.

  • Monitoring committee takes action against use of luxury cars by officials to cut expenses

    Monitoring committee takes action against use of luxury cars by officials to cut expenses

    State-run Radio Pakistan has reported that the monitoring committee responsible for overseeing the implementation of austerity measures has expressed serious concerns about some officers using vehicles above 1,800cc.

    The committee, chaired by Finance Minister Ishaq Dar, met in Islamabad on Monday to review the implementation of the decisions made at its first meeting regarding austerity measures. As part of an austerity drive to save the government Rs200 billion ($766 million) a year, Prime Minister Shehbaz Sharif had asked ministers and advisers to fly economy class and forgo luxury cars and their salaries.

    These cuts were made as Pakistan, facing a balance of payment crisis, negotiates with the International Monetary Fund (IMF) to secure $1 billion in funds that have been pending since late last year over policy issues.

    The meeting today was updated on the status of the use of luxury vehicles and was informed that a majority of the allocated vehicles have been returned by cabinet members. However, the committee expressed concerns over the non-return of the remaining luxury vehicles and directed the Cabinet Division to strictly implement the decision and retrieve the luxury vehicles within three days. The committee also discussed the withdrawal of the use of security vehicles and decided to implement the decision.

    Furthermore, the Ministry of Law and Justice was tasked with suggesting the implementation of austerity measures in the judiciary to the superior judiciary and approaching the Senate chairman and National Assembly speaker to suggest the use of teleconferences for all meetings to save time and expenditure. The Ministry of Inter-Provincial Coordination has also approached provincial governments to suggest the implementation of similar austerity measures.

    The committee also deliberated on working timings and decided that the new timing for office work will be 7:30 am to 2:30 pm, and up to 12:30 pm on Fridays, starting from the first of Ramzan and will be followed in the summer season, as per the cabinet’s decision. A notification will be issued accordingly. The finance minister, speaking at the occasion, directed all to expedite the implementation of austerity measures with sincerity and true spirit without any exception. These cuts are part of an effort to prevent an economic meltdown as Pakistan’s foreign exchange reserves have fallen below a month’s import cover.

  • Pakistani rupee reverses marginal gains, closes at Rs281.61 against US dollar

    Pakistani rupee reverses marginal gains, closes at Rs281.61 against US dollar

    On Monday, the Pakistani rupee faced renewed pressure against the US dollar, declining by 0.30 per cent in the inter-bank market after posting marginal gains on Friday. According to the State Bank of Pakistan (SBP), the rupee settled at Rs281.61, representing a decrease of Re0.84.

    Despite the rupee having found some relief on Friday with a 0.54 per cent appreciation in the inter-bank market, the currency had depreciated by 0.82 per cent against the US dollar during the previous week.

    The SBP has received inflows from China, which have provided support to critical levels of foreign exchange, but concerns over the delay in the International Monetary Fund (IMF) programme have continued to impact sentiment.

    Miftah Ismail, former Federal Finance Minister, suggested on Sunday that Pakistan should ensure 15 per cent tax on Gross Domestic Product (GDP) and 15 per cent exports to GDP in order to avoid the need for IMF programs.

    Internationally, the US dollar experienced a sharp decline on Monday due to the sudden collapse of Silicon Valley Bank (SIVB). The US government announced various measures on Monday to mitigate the impact of the bank’s collapse, including ensuring access to deposits for SVB customers and depositors of New York’s Signature Bank.

  • Real estate in Pakistan is ‘parking lot’ for untaxed money with support of DHAs and Army, says former FBR chairman

    Real estate in Pakistan is ‘parking lot’ for untaxed money with support of DHAs and Army, says former FBR chairman

    Shabbar Zaidi, the former Chairman of the Federal Board of Revenue in Pakistan, stated that only 300 companies out of the entire business sector in the country pay 70 per cent of the total taxes collected.

    According to Dawn, Zaidi dismissed the claims of some businesses that there were too many taxes in Pakistan and no dividends. He pointed out that the real estate was the “parking lot” of untaxed money, and that with the support of the DHAs and army, a system had been developed to officially launder money through real estate, which had perpetual amnesty in the country.

    He called for removing DHAs from the real estate business as there could not be fair competition between a state institution and private businesses in real estate, and also suggested that plots of land should be confiscated if construction was not done on them.

    Kashif Anwar, the president of the Lahore Chamber of Commerce and Industry, argued in favor of amnesty on undeclared foreign reserves to bring money back to the country.

    In another session, Tassaduq Hussain Jillani, the former Chief Justice of Pakistan, acknowledged that criticism of the Supreme Court for messing up big corporate cases was justified as the judges were not expert at finance and economics.

    Jillani suggested the formation of commercial benches in the SC and high court for such cases. In a session on local governments, Ammar Ali Jan, the general secretary of Haqooq-i-Khalq Party, criticized the absence of local government in the country, citing examples of polluted water and waste management issues.

  • Nawaz gets a Mercedes, Zardari BMWs: New list of Toshakhana gifts reveals what previous govts kept for themselves

    On Sunday, the government officially released long-awaited records regarding the gifts received by public office holders from foreign governments and dignitaries since 2002.

    The Toshakhana, established in 1974, is a department under the administrative control of the Cabinet Division and is responsible for the storage of precious gifts given to rulers, parliamentarians, bureaucrats, and officials by heads of other governments and states, as well as foreign dignitaries.

    As per the Toshakhana rules, gifts, presents, and other such materials received by persons to whom these rules apply must be reported to the Cabinet Division.

    The department has been in the news in recent months due to the proceedings against former Prime Minister Imran Khan for “not sharing details” of Toshakhana gifts. The Prime Minister of Pakistan, Shehbaz Sharif, announced last month the government’s plan to release the entire record to the public. In addition, officials have been barred from retaining gifts worth more than $300.

    Below are some of the noteworthy gifts kept by political leaders over the years from the Toshakhana:

    Nawaz Sharif

    Nawaz Sharif, the three-time former Prime Minister and PML-N chief, has retained several expensive items over the years. In April 2008, he kept a Mercedes Benz worth Rs4.2 million after paying Rs636,888 for it. In November 2013, he retained a Rolex wristwatch valued at Rs1.18 million after paying a total of Rs243,000 for it and some other items.

    In January 2015, he kept a Piaget wristwatch worth Rs1 million after paying Rs240,000 for it and a box of perfumes. In January 2016, he retained a Christopher Claret watch (Rs2 million), a ring (Rs19.5 million), and a pair of cufflinks (Rs16 million) after paying a total of Rs7.6 million for them and some other items.

    In February 2016, he kept a Dela Cour watch (Rs3.2 million), a ring (Rs8 million), and a pair of cufflinks (Rs5 million) after paying Rs3.2 million for them.

    In October 2016, he retained two Rolex watches, one worth Rs1.2 million and the other Rs850,000, after paying Rs469,000 for them and some other items. In March 2017, his son Hussain Nawaz retained a Rolex watch worth Rs940,000 after paying Rs186,000 for it.

    In May 2017, Nawaz retained a Rolex wristwatch worth Rs4 million after paying Rs808,000 for it.

    Additionally, in January 2016, Nawaz’s wife Kulsoom Nawaz retained a bracelet worth Rs12.7 million and a necklace and earring valued at Rs41.6 million after paying Rs10.8 million for them. In March 2017, Nawaz retained a diamond necklace worth Rs1 million after paying Rs207,560 for it and a table watch.

    Imran Khan

    In September 2018, Imran Khan, the former Prime Minister and Chairman of Pakistan Tehreek-e-Insaf (PTI), retained several items from the Toshakhana including a Graff wristwatch (Rs85 million), a pair of cufflinks (Rs5.6 million), a pen (Rs1.5 million), and a ring (Rs8.75 million) by paying Rs20 million for them.

    In the following month of October 2018, he retained a Rolex watch, valued at Rs3.8 million, by paying Rs754,000 for it. He then retained another Rolex watch (Rs1.5m) in the same month by paying Rs294,000 for it. In November 2018, Imran retained another Rolex wristwatch (Rs900,000) by paying a total of Rs338,600 for it along with other items. In October 2019, he retained a boxed watch, assessed at Rs1.9m, by paying Rs935,000 for it.

    In September 2020, Imran retained another Rolex watch, assessed at Rs4.4 million, along with other gifts by paying Rs2.4 million for them. In the same month, his wife Bushra Bibi retained a necklace (Rs10m), bracelet (Rs2.4m), ring (Rs2.8m), and a pair of earrings (Rs1.85 million) by paying Rs9 million for them.

    Asif Ali Zardari

    In January 2009, former President and co-chairperson of the Pakistan People’s Party (PPP), Asif Ali Zardari, retained a BMW car (Rs57.8 million) and a Toyota Lexus (Rs50 million) after paying a total of Rs16.1 million for them. Additionally, he retained another BMW car (Rs27.3 million) after paying Rs4 million.

    In March 2011, Zardari retained a wristwatch (Rs1 million) after paying Rs158,250 for it and other items. Later, in June 2011, he retained a Corum wristwatch (Rs1.25 million) after paying Rs189,219 for it and other items. In October 2011, Zardari retained another Cartier wristwatch (Rs1m) after paying Rs321,000 for it and a gun.

    Arif Alvi

    In October 2019, Samina Alvi, the wife of President Dr Arif Alvi, retained a necklace valued at Rs1.19 million after making a payment of Rs865,000 for it, along with other items in a jewellery box.

    In February 2022, President Dr Arif Alvi retained a Rolex wristwatch valued at Rs2.5 million, after making a payment of Rs1.2 million for it.

    Raja Pervaiz

    In November 2012, former prime minister and National Assembly Speaker Raja Pervaiz Ashraf retained a Graff wristwatch, which was assessed at Rs890,000. He paid a total of Rs218,000 for the wristwatch and other items.

    Shahid Khaqan Abbasi

    In October 2017, ex-premier Shahid Khaqan Abbasi retained a Hublot wristwatch (Rs15 million), a pair of cufflinks (Rs1.2 million), a pen (Rs1.5 million), a ring (Rs3 million), and prayer beads (Rs1.85 million) after paying Rs4.5 million for them. His wife, Sameena Shahid, also retained a jewellery set (Rs99 million) after paying Rs19.99 million for it.

    In November 2017, Abbasi retained a Rolex watch boxset (Rs23 million) after paying Rs4.59 million for it. In April 2018, he retained a Rolex wristwatch (Rs25 million) after paying a total of Rs5.27 million for it and other items.

    Pervez Musharraf

    As per the official record, it was revealed that the total value of the gifts presented to the former military ruler, Gen (retd) Pervez Musharraf, in 2004 amounted to more than Rs6.5 million. Among these gifts, a watch gifted to Musharraf in 2005 was worth Rs500,000. Numerous other precious items such as watches, jewelry boxes, and various other gifts were also presented to the former president, who retained them after paying the required amount.

    In 2003, Musharraf’s wife, Sehba Musharraf, received a jewelry box worth over Rs2.6 million. Additionally, on April 6, 2006, she received gifts worth Rs1.65 million, while on August 1, 2007, the value of her received gifts stood at Rs3.4 million. On April 3, 2007, she was presented with gifts worth over Rs10 million, and on January 31, 2007, Musharraf himself received gifts valued at Rs1.4 million.

    Shaukat Aziz

    In 2005, former Prime Minister Shaukat Aziz received a watch worth Rs850,000, which was later auctioned off for Rs355,000. Aziz had kept several other gifts by claiming their value to be below Rs10,000. On September 27, 2007, he received another watch worth Rs1.35 million.

    On December 20, 2006, Aziz received gifts worth Rs3.7 million, which he chose to retain. However, during 2006, he returned several other gifts to the Toshakhana. On June 2, 2006, he received a watch worth Rs1.35 million. On January 7, 2007, the former premier received gifts valued at Rs1.8 million. On February 24, 2010, he received a watch worth Rs1.2 million but returned it to the Toshakhana.

    Yousuf Raza Gillani

    In December 2009, former prime minister Yousuf Raza Gillani’s wife, Fauzia Gillani, retained a jewellery set (Rs2 million) after paying Rs326,043 for it.

  • Pakistan’s Petroleum Division eyes discounted Russian crude oil amid high global prices

    Pakistan’s Petroleum Division eyes discounted Russian crude oil amid high global prices

    Petroleum Division is attempting to purchase Russian crude oil for approximately $50/barrel, which is at least $10/barrel below the price ceiling imposed by G7 countries on this valuable commodity originating from Russia because of its conflict with Ukraine. Presently, crude oil is being sold internationally for $82.78/barrel.

    Officials participating in the virtual negotiations with Russia have disclosed that Moscow is primarily focused on fulfilling all prerequisites, such as deciding on the method of payment, shipping costs with premium, and insurance expenses, before entering into an agreement with Pakistan. These officials, who requested anonymity, revealed that Russia will respond regarding the discount on the base price after the prerequisites are finalized. They also stated that shipping the crude oil from Russian ports will take 30 days, resulting in a $10-15/barrel increase due to transportation costs.

    The talks between Moscow and Islamabad are progressing positively, with the expectation that a government-to-government deal on Russian crude oil imports will be finalized by the end of March. When asked, officials stated that the government has decided not to disclose the payment method to Russia for crude oil imports, but authorities are considering using Pakistan National Shipping Corporation (PNSC) ships or Russian tankers for transportation.

    An official cautioned that the landed cost of Russian crude must be considered because the crude vessel will arrive in 30 days, leading to a per barrel shipping cost of $10-15. They added that Moscow has not agreed on the discount yet, and the maximum discount may be offset by the crude oil’s shipping costs.

    State Minister Musadik Malik had previously claimed that Pakistan would receive a 30% discount on Russian crude oil during a press conference. The government plans to import one Russian crude oil ship to test the landed cost compared to the existing cost of crude being imported from Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates and Saudi Aramco.

    According to Geo, the Petroleum Division secretary is currently in Karachi to further discuss the import of Russian crude oil to process it for finished products with the top management of Pak-Arab Refinery Company Limited (PARCO), Pakistan State Oil (PSO), Pakistan Refinery Limited (PRL), and other refineries. If the test ship’s cost is low enough to bring down the prices of petroleum, oil, and lubricants, Pakistan will approve Russian oil cargos within a month.

    Due to a US dollar liquidity crunch, Pakistan will pay Russia in the currencies of friendly countries such as China, Saudi Arabia, and the UAE. The officials revealed that the ship carrying Russian crude will be insured by the National Insurance Company Limited (NICL) and Pakistan Reinsurance Company Limited (PakRE). The State Bank of Pakistan (SBP), which was previously hesitant about transactions with Russian banks due to G7 restrictions, has now expressed a willingness to communicate with the Russian counterpart bank regarding a payment mechanism for oil imports in three currencies other than dollars.

  • Toyota IMC increases car prices by up to Rs2 million due to GST hike

    Toyota IMC increases car prices by up to Rs2 million due to GST hike

    Indus Motor Company (IMC) has increased the prices of all Toyota vehicles in Pakistan due to the recent hike in the General Sales Tax (GST) from 18 per cent to 25 per cent by the Federal Government. The models affected by the price hike include Toyota Yaris, Toyota Corolla Altis X, Toyota Hilux Revo (IMV III), and Toyota Fortuner (IMV IV).

    According to a circular released by the company, the economic uncertainties and extreme volatile situation of Pakistani rupee against US dollar have adversely impacted the cost of manufacturing for IMC. The company has therefore been compelled to pass on some impact to the market.

    The government of Pakistan has also enhanced the rate of Sales Tax to 25 per cent on all CKD vehicles with an engine capacity of 1400cc and above, except for IMV-I Single Cabin.

    Toyota Pakistan has stated that the mentioned car prices are subject to change and the prevailing prices at the time of delivery shall be applicable on all orders. Any change in Government levies and taxes, tariff, fiscal policies, import policies, forex, etc. will be on account of the customer.

    Here are the new prices of all Toyota cars after tax hike:

    Toyota Corolla Altis X latest prices

    Model Old price (Rs) New price (Rs) Hike (Rs)
    Toyota Corolla 1.6 MT 5,576,000 6,169,000 593,000
    Toyota Corolla 1.6 CVT 6,111,000 6,769,000 658,000
    Toyota Corolla 1.6 Special Edition 6,716,000 7,429,000 713,000
    Toyota Corolla 1.8 CVT 6,423,000 7,119,000 696,000
    Toyota Corolla 1.8 CVT SR 6,998,000 7,759,000 761,000
    Toyota Corolla 1.8 CVT SR BLK 7,039,000 7,799,000 760,000

    Toyota Yaris latest prices

    Model Old price (Rs) New price (Rs) Hike (Rs)
    Toyota Yaris 1.3 GLi MT 4,316,000 4,499,000 183,000
    Toyota Yaris 1.3 GLi CVT 4,588,000 4,789,000 201,000
    Toyota Yaris 1.3 ATIV MT 4,558,000 4,759,000 201,000
    Toyota Yaris 1.3 ATIV CVT 4,790,000 4,999,000 209,000
    Toyota Yaris 1.5 ATIV X MT 4,911,000 5,429,000 518,000
    Toyota Yaris 1.5 ATIV X CVT 5,213,000 5,769,000 556,000

    Toyota Hilux Revo latest prices

    Model Old price (Rs) New price (Rs) Difference (Rs)
    Hilux Revo STD 10,316,000 11,439,000 1,123,000
    Hilux Revo G MT 11,184,000 12,409,000 1,225,000
    Hilux Revo G AT 11,728,000 13,019,000 1,291,000
    Hilux Revo V 12,969,000 14,389,000 1,420,000
    Hilux Revo V AT ROCCO 13,675,000 15,179,000 1,504,000

    Toyota Fortuner latest prices

    Model Old Price (Rs) New Price (Rs) Hike (Rs)
    Toyota Fortuner G 4x2L 14,230,000 15,809,000 1,579,000
    Toyota Fortuner V 4×4 16,297,000 18,099,000 1,802,000
    Toyota Fortuner Sigma 17,175,000 19,079,000 1,900,000
    Toyota Fortuner Legender 18,112,000 20,129,000 2,017,000
  • Motorcycle dealers reportedly demanding Rs40,000 extra for instant delivery of Honda CG125

    Motorcycle dealers reportedly demanding Rs40,000 extra for instant delivery of Honda CG125

    The market for new and used motorcycles in Akbar Road, Karachi, which is the largest in the country, is experiencing a shortage of Honda CG-125 bikes at the showrooms of the company’s authorised dealers. The dealers are reportedly not accepting fresh bookings from customers due to thin supplies from the assembler.

    Non-Honda dealers are reportedly demanding a price of Rs252,000-255,000 for instant delivery of the CG-125 bike, which is Rs40,000 more than the company’s price of Rs215,000, despite not having the bike available in their showrooms.

    Some unauthorised dealers have already acquired a large number of CG-125 motorcycles from authorized dealers, apparently under an understanding to jointly make a windfall. Some dealers have cited Afghan nationals accompanied by Pakistanis as the reason for the stock shortage. However, 70cc bikes are readily available for instant delivery at showrooms.

    According to Dawn, market sources have stated that local bike assemblers exported 25,000 units of 70cc-125cc bikes over the past 11 months, in which Honda 125cc holds the lion’s share. They also believe that the actual volume of shipments of two-wheelers is more than the official export by the companies after individual purchases of bikes by customers for Afghan markets.

    Afghan businessmen are importing Pakistan-assembled motorcycles in large numbers daily through the Chaman border amid booming demand for two-wheelers in Afghanistan. The market for Honda CG-125 bikes is experiencing price hikes and shortages across the country, including Quetta and other cities of Balochistan.