Category: Business

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

  • IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    The International Monetary Fund (IMF) mission is poised to commence vital economic review discussions from March 14 to 18, 2024, marking the conclusive evaluation of Pakistan’s Standby Arrangement (SBA).

    Sources within the Finance Ministry have confirmed that the IMF mission is scheduled to touch down in Pakistan tomorrow night, kickstarting a series of pivotal discussions set to unfold over the next four days.

    During this intensive period, the IMF mission is slated to engage in comprehensive dialogue with Pakistan’s economic team. Key participants include representatives from the Finance Ministry, Energy Ministry, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Planning Commission, and the Petroleum Division.

    Insiders suggest that the IMF mission will delve into discussions covering a spectrum of economic facets. Talks are expected to encompass various critical sectors, including finance, energy, taxation, and central banking.

    Furthermore, in parallel with these discussions, preliminary conversations are anticipated to unfold regarding the potential initiation of a new loan programme with the IMF mission. This prospect adds an extra layer of significance to the ongoing economic deliberations as Pakistan navigates its financial landscape in the pursuit of sustainable economic growth.

    Stay tuned for comprehensive coverage as the IMF mission engages in the final review of Pakistan’s Standby Arrangement, paving the way for crucial decisions that could shape the nation’s economic trajectory in the coming months.

  • Suzuki Swift GLX CVT now priced above Rs5.4 million

    Suzuki Swift GLX CVT now priced above Rs5.4 million

    Pak Suzuki Motor Company Limited (PSMC) announced a substantial increase of Rs304,000 in the price of its Swift G. CVT model, effective from March 8, 2024.

    This adjustment comes in response to the recent surge in taxes imposed by the government on locally manufactured or assembled vehicles, as indicated in the company’s official notice issued today.

    Consequently, the new sale price for the Swift G. CVT model will see an adjustment from Rs5.125 million to Rs5.429 million, reflecting the impact of the revised tax structure.

    The decision stems from a notification released by the Ministry of Finance and Revenue on the same date, highlighting a hike in the sales tax rate from 18 per cent to 25 per cent for vehicles falling under chapter 87.03 of the Pakistan Custom Tariffs, with an invoice price (excluding sales tax) exceeding Rs4 million.

  • Pakistan seeks global assistance to overhaul tax system amidst significant drop in active taxpayers

    Pakistan seeks global assistance to overhaul tax system amidst significant drop in active taxpayers

    In a significant development, the count of active taxpayers has dwindled to 3.4 million, marking a 41 per cent decrease from the previous year. The government is contemplating seeking financial support from the Bill and Melinda Gates Foundation to enhance digital services within the Federal Board of Revenue (FBR).

    According to Express Tribune, approximately 500,000 individuals were excluded from the Active Taxpayers List (ATL) for tax year 2023 due to delayed submission of annual income tax returns. These individuals will incur a nominal penalty for reinstatement. Newly appointed economic czar, Muhammad Aurangzeb, chaired his inaugural meeting to explore avenues for improving digital services and expanding the tax base.

    The gathering, which included representatives from Karandaaz Pakistan, a firm specializing in financial inclusion services, concluded with the decision for Karandaaz to approach the Bill and Melinda Gates Foundation for financial backing in establishing a digital platform within the FBR.

    The government aims to streamline interactions between tax authorities and taxpayers, fostering transparency and curbing corruption. This initiative arises as the number of active taxpayers further drops to a mere 3.4 million, compared to last year’s figure of over 5.7 million—an alarming 41 per cent reduction.

    The FBR, having received 3.9 million income tax returns, removed approximately 500,000 individuals from the active list due to delayed filings. Consequently, those not on the active taxpayers list will face a 0.6 per cent withholding tax on cash withdrawals.

    To encourage compliance, the government allows the reactivation of approximately 500,000 individuals by paying a nominal Rs1,000 fine for late filing of returns. The International Monetary Fund (IMF) is expected to exert pressure on the government to expand the tax base and simplify tax slabs for both salaried and business individuals.

    Recent data reveals a noteworthy contribution of Rs217 billion from the salaried class in the first eight months of the current fiscal year, surpassing the combined taxes paid by rich exporters and real estate players by Rs37 billion, or one-fifth.

  • SNGPL to provide uninterrupted gas supply during Sahr and Iftar in Ramadan

    SNGPL to provide uninterrupted gas supply during Sahr and Iftar in Ramadan

    Sui Northern Gas Pipelines Limited (SNGPL) has affirmed its commitment to providing uninterrupted gas supply during the holy month of Ramadan, specifically catering to the Sahr and Iftar periods. The decision comes as a proactive measure to facilitate consumers adhering to their religious practices.

    According to a spokesperson from Sui Northern, the gas supply will remain constant from 2:30 am to 8 am for Sahr (pre-dawn meal) and from 3 pm to 10 pm for Iftar (breaking of the fast). This move is aimed at ensuring a seamless gas service for consumers at crucial times during Ramadan.

    In addressing potential gas pressure issues, Sui Northern Gas has formed monitoring teams and established control rooms. These initiatives are designed to swiftly resolve any challenges that may arise, emphasising the company’s dedication to a reliable gas supply throughout the holy month.

    Consumers experiencing gas pressure or supply problems are encouraged to contact the dedicated helpline at 1199.

  • Bitcoin surges to new heights, breaking $70,000 barrier

    Bitcoin surges to new heights, breaking $70,000 barrier

    In a surge of volatile trading, Bitcoin soared to an all-time high of $70,000 on Friday, fueled by the ongoing frenzy in the crypto investment landscape.

    This marks a significant milestone for the leading cryptocurrency, driven by increased investor demand for new U.S. spot exchange-traded crypto products and optimistic expectations of a global decline in interest rates.

    The cryptocurrency reached an impressive $70,105 before experiencing a swift drop, currently settling at $68,317.72. The recent influx of billions of dollars into exchange-traded funds (ETFs) has provided substantial support.

    Furthermore, a positive market outlook is influenced by the upcoming upgrade to the Ethereum blockchain platform, which houses the second-largest cryptocurrency, Ether.

    Additionally, anticipation surrounds the bitcoin “halving” event scheduled for April, which is expected to slow down the rate of bitcoin minting.

    However, scepticism persists regarding the speculative nature of these digital assets. Despite reaching a record high earlier in the week, Bitcoin encountered a sharp reversal, plummeting more than 10 per cent and slipping below the $60,000 threshold.

    Antoni Trenchev, co-founder of the crypto lending platform Nexo, acknowledged the challenges of navigating historic highs, stating, “Volatility defines bitcoin bull markets, and 2024 will be littered with sudden and gut-wrenching 10 per cent–20 per cent plunges.”

    The approval of 11 spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission in late January marked a pivotal moment for the crypto industry.

    This comes after an 18-month-long crypto winter plagued by corporate bankruptcies and scandals.

    In a noteworthy shift, institutional investors, who were once cautious due to the unpredictable nature of crypto, are now committing long-term investments.

    Analysts believe that this institutional support could play a vital role in sustaining the current upward momentum.

    According to LSEG data, net flows into the ten largest U.S. spot bitcoin funds reached $2.2 billion in the week ending March 1, with over $2 billion of that directed towards BlackRock’s iShares Bitcoin Trust (IBIT.O).

  • Pakistan gears up for crucial IMF talks on $3 billion SBA programme

    Pakistan gears up for crucial IMF talks on $3 billion SBA programme

    Pakistan is set to commence vital discussions with the International Monetary Fund (IMF) concerning the completion of the second review under the $3 billion Standby Arrangement (SBA) programme.

    The formal invitation to the Washington-based lender is expected to be dispatched shortly after the formation and oath-taking of the federal cabinet, with negotiations anticipated to commence in the coming week.

    Simultaneously, Pakistan plans to request a new deal under the 36-month Extended Fund Facility (EFF).

    Sources have indicated that the size of the upcoming EFF programme is yet to be finalized, but Islamabad aims to explore the inclusion of climate finance to potentially increase the programme’s magnitude from $6 billion to $8 billion.

    A significant challenge facing the incoming finance minister is the pursuit of the Federal Board of Revenue’s (FBR) tax collection target of Rs890 billion for March 2024. Failure to meet this quarterly (Jan-March) target with the IMF may prompt additional taxation measures for the remaining fiscal year.

    Prime Minister Shehbaz Sharif chaired a high-level meeting on Tuesday to receive a comprehensive briefing from the FBR team on the future strategy for revamping the taxation system.

    The FBR has, to date, collected Rs5.82 trillion in the first eight months of the current fiscal year, experiencing a shortfall of Rs33 billion in achieving the February 2024 monthly target.

    To meet the targeted Rs9.415 trillion by June 30, 2024, the FBR must collect Rs3.58 trillion in the remaining four months (March-June) period.

    March 2024 holds particular significance, with the monthly target of Rs890 billion crucial for fulfilling the agreed third-quarter (Jan-March) period with the IMF.

    PM Shehbaz emphasized the immediate commencement of automation and digitization of the FBR, personally committing to monitor the entire process.

    According to The News, he urged the adoption of international best practices to enhance transparency, increase tax collection, and eradicate tax evasion, corruption, and smuggling.

    Expressing dissatisfaction with the current progress, PM Shehbaz directed the FBR to start the automation and digitization process immediately, urging the acquisition of services from international firms. He stressed the appointment of officers based on merit in the Track and Trace system.

    During the meeting, FBR Chairman Malik Amjad Tiwana briefed the prime minister on measures taken towards automation, tax net expansion, refund payments to exporters, and anti-smuggling efforts.

    PM Shehbaz, however, insisted on immediate progress, highlighting the collaboration with the Ministry of Interior and the Pakistan Army to combat smuggling effectively.

    As the meeting concluded, PM Shehbaz praised the efforts of caretaker finance minister Dr. Shamshad Akhtar and her team, commending their adherence to the policies laid by the previous government to avert default.

    The prime minister expressed confidence in achieving progress and prosperity through diligent efforts and adherence to the right direction.

    The meeting, attended by key officials, emphasized the urgency of digitalized invoicing and the inclusion of 1.5 million more individuals into the tax net, underlining the government’s commitment to fostering economic stability and growth.

  • Toyota manufacturer in Pakistan halts car production amid parts shortage

    Toyota manufacturer in Pakistan halts car production amid parts shortage

    Indus Motor Company (IMC), the manufacturer of Toyota vehicles in Pakistan, has declared a temporary shutdown of its production plant for a duration of six days.

    The decision stems from the company’s concern over low inventory levels and a shortage of essential components, as disclosed in a formal notice submitted to the Pakistan Stock Exchange (PSX).

    The notice specified, “Based on the current low level of inventory of manufactured vehicles and the shortage of parts and components for vehicle manufacturing, due to supply chain challenges, the company has decided to close its production plant from March 6th, 2024, to March 11th, 2024 (both days inclusive).”

    Pakistan’s automotive sector is grappling with various challenges, including the nation’s sluggish economic growth, surging inflation rates, and elevated borrowing costs, all of which are contributing to a decline in vehicle sales.

    To address these challenges, Indus Motor Company recently announced its board’s approval of an investment of approximately Rs3 billion.

    This investment aims to enhance the localization of production, a crucial step in the company’s broader strategy to consistently increase the localization of parts and components in locally manufactured vehicles. 

    This temporary shutdown underscores the broader challenges facing the automotive industry in Pakistan and reflects IMC’s proactive approach to managing its production in response to current market conditions.

  • Oil prices drop again on concerns over China’s economic changes

    Oil prices drop again on concerns over China’s economic changes

    In the wake of growing apprehensions over reduced oil consumption in China, a key player in the global oil market, oil prices witnessed a consecutive decline for the second day.

    The current market scenario reveals Brent crude trading at $82.16 per barrel, marking a 0.52 per cent decrease, while West Texas Intermediate crude (WTI) is trading at $77.9 per barrel, down by 0.6 per cent from the previous close.

    China, a significant oil consumer, declared its commitment to overhaul its economic development model and address industrial overcapacity concerns.

    Alongside these initiatives, China set its economic growth target for 2024 at approximately 5 per cent, a figure consistent with last year’s goal and in alignment with analysts’ predictions, according to Reuters.

    However, achieving this growth target may prove challenging this year, as analysts point out that China’s favourable base effect in 2023, resulting from the pandemic-affected 2022, may not be replicable. This potential hurdle has raised concerns and could impact investor sentiment.

    China, being the world’s largest crude importer, also announced intentions to intensify the exploration and development of oil and natural gas resources.

    Simultaneously, there is a commitment to tighten control over fossil fuel consumption, reflecting the nation’s dual focus on energy development and environmental responsibility.

    While anxieties regarding China’s demand outlook contributed to the downward pressure on oil prices, other factors provided support.

    Major oil producers’ decisions to reduce output and geopolitical tensions arising from the Israel-Gaza conflict played a role in sustaining crude prices.

    Over the weekend, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) extended their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter.

    This decision aimed to bolster prices amidst global growth concerns and increased production outside the OPEC+ alliance.

  • Bitcoin’s price soars close to $69,000, then pulls back to $65,000

    Bitcoin’s price soars close to $69,000, then pulls back to $65,000

    Bitcoin, the leading cryptocurrency by market value, surged to a two-year peak, surpassing $68,600 on Tuesday and approaching its all-time high.

    The cryptocurrency has seen a notable 50 per cent surge this year, with a significant portion of the increase occurring in recent weeks, marked by inflows into US-listed bitcoin funds.

    During Asian trading hours on Tuesday, Bitcoin hovered around $68,500, reaching a session high of $68,828, just shy of the record peak of $68,999.99 set in November 2021.

    The approval of spot bitcoin exchange-traded funds in the United States earlier this year attracted new significant investors, reigniting enthusiasm reminiscent of the 2021 bull run.

    However, Bitcoin has now retreated to $65,000 as of 9:50 p.m. Kyle Rodda, senior markets analyst at Capital.com, described the current market conditions as “crypto mania 4.0,” suggesting that continued low bond and rate volatility could sustain the momentum, though acknowledging signs of irrational behaviour.

    In the week ending March 1, net flows into the ten largest US spot bitcoin funds totaled $2.17 billion, with over half directed towards BlackRock’s iShares Bitcoin Trust, according to LSEG data.

    Tony Sycamore, a market analyst at IG, expressed optimism about Bitcoin’s potential move towards $80,000 despite short-term overbuying.

    The cryptocurrency rally aligns with record-breaking performances in global stock indexes, including Japan’s Nikkei, the S&P 500, and the Nasdaq.

    Simultaneously, volatility measures in equities and foreign exchange markets are trending downward.

    Ether, Bitcoin’s smaller rival, also surged over 50 per cent for the year, reaching $3,649. Speculation about exchange-traded funds driving inflows has contributed to Ether’s momentum.

    A regulatory filing on Monday revealed that the US Securities and Exchange Commission has delayed its decision on BlackRock’s application for a spot ethereum exchange-traded fund.

    In a separate development, Tether announced that the number of dollar-pegged stablecoins it issued has surpassed $100 billion, providing stability in the cryptocurrency market.