Pakistan

The State Bank of Pakistan (SBP) has introduced a set of reforms to facilitate IT exporters and freelancers. These reforms are designed to simplify the export realization procedures, standardize documentation requirements, set transaction processing timelines, and strengthen complaint resolution mechanisms. Read More: https://theboardroompk.com/palm-oil-prices-surge-23-cytd-pressuring-import-bill-to-around-3-4-billion/ The key facilitation measures include the following: • IT companies and freelancers will no longer be required to submit Form “R” for every individual export transaction. Instead, they will provide a one-time declaration, clearly specifying the nature of services being offered overseas, at the time of opening of new account and, in the case of existing customers, as and when required. Authorized Dealers (banks) will tag the relevant service and purpose code with the exporters’ account for reporting and processing export transactions, unless advised otherwise by the exporter. • A maximum turnaround time of one working day has been introduced for processing inward export receipts and outward remittances from Exporters’ Special Foreign Currency Accounts (ESFCAs). • Documentation requirements for outward remittances from ESFCAs for acquiring services from abroad have been standardized to promote clarity and consistency across banks. • Banks have been instructed to establish effective internal systems to ensure timely resolution of complaints raised by IT companies and freelancers, enhancing service quality and responsiveness. Besides the above measures, the reporting requirements for exporters and importers of services have also been simplified through revisions in Form “R”, the Inward Remittance Voucher (IRV), and Form “M”. The threshold level for obtaining Form “R” has been increased to above US$ 25,000 (or equivalent in other currencies), providing convenience to the beneficiaries. Additionally, banks have been advised to digitalize Form “R” and Form “M” with auto-population functionality for the customer’s basic data to further promote ease of doing business. SBP believes that these measures will significantly enhance operational efficiency and contribute meaningfully towards the growth of Pakistan’s IT exports.

KARACHI: Chairman Businessmen Group (BMG) Muhammad Zubair Motiwala has stressed the urgent need for immediate fiscal, energy and export-related policy interventions in light of escalating US-Iran tensions, warning that the worsening regional situation could severely destabilize Pakistan’s economy if timely and well-calibrated measures are not taken. Read More: https://theboardroompk.com/ccps-study-on-solar-market-flags-barriers-to-competition-investment-offers-targeted-reform-measures/ In a letter addressed to Federal Minister for Finance & Revenue Muhammad Aurangzeb, Zubair Motiwala emphasized that the business community was becoming increasingly concerned over the adverse implications of regional instability on Pakistan’s trade, industry and overall economy.He pointed out that escalating US-Iran tensions were disrupting global trade flows, increasing freight and insurance costs and causing significant volatility in international energy markets. He noted that Pakistan’s economy was already under considerable pressure due to stagnant exports, weakening industrial activity and declining remittance inflows, all of which were aggravating external account vulnerabilities. Zubair Motiwala strongly recommended the immediate restoration of zero-rating of sales tax at the input stage for export-oriented sectors, including textiles, leather, surgical instruments, carpets and sports goods. He pointed out that these sectors contribute nearly 80 to 85 percent of Pakistan’s total exports and therefore their liquidity position is extremely important for sustaining export momentum.He observed that the shift from zero-rating to a refund-based regime had created serious working capital constraints for exporters due to delayed refund cycles and increased financial costs. According to him, the restoration of zero-rating would ensure uninterrupted liquidity, lower the cost of capital and significantly improve the global competitiveness of Pakistani exports. Highlighting another major issue, Zubair Motiwala proposed that customs duties and taxes should be assessed on Ex-Works (EXW) value instead of the existing Cost and Freight (CNF) basis. He explained that the current CNF-based valuation mechanism inflates the dutiable value of imported goods because it includes freight and insurance costs, both of which have sharply increased due to geopolitical disruptions.He stated that EXW valuation would more accurately reflect the actual price of goods at origin and would provide a fairer, more transparent and rational taxation structure. He added that such a change would reduce input costs for industries and improve manufacturing efficiency and competitiveness. Expressing grave concern over the high cost of electricity for industries, Zubair Motiwala stated that Pakistan’s industrial electricity tariffs remained uncompetitive, averaging around 14 to 16 US cents per kilowatt hour, which was substantially increasing the cost of production.He pointed out that although the Federal Government had introduced an Incremental Consumption Package (ICP), under which concessional tariffs and relief of approximately Rs10.3 per unit were being provided to industries across Pakistan on incremental consumption, Karachi’s industrial sector had not received its due share under the package. Zubair Motiwala revealed that the Federal Government had already released approximately Rs7 billion under the package for Karachi, but this amount had not been passed on to industrial consumers. He further stated that the total pending relief for Karachi industries was estimated at approximately Rs28 billion to Rs33 billion.According to Zubair Motiwala, this situation had created a serious structural disadvantage for Karachi-based industries because industries in other regions were benefiting from concessional tariffs while industries in Karachi continued to bear higher effective electricity costs. He strongly demanded the immediate disbursement of the pending Rs28 billion to Rs33 billion, stating that this would provide much-needed liquidity relief to exporters who were already facing severe cash flow constraints. He also called for the establishment of a transparent mechanism to ensure the direct transfer of benefits to industrial consumers.Turning to the issue of gas tariffs and supply, Zubair Motiwala said that industrial gas tariffs had increased substantially while supply inconsistencies continued to disrupt business operations. He stressed that gas was a critical input for export-oriented industries and its pricing directly affected Pakistan’s competitiveness in international markets. He warned that in the prevailing environment shaped by escalating US-Iran tensions, businesses were already facing rising oil prices, increased shipping costs, logistics disruptions, war risk surcharges and heightened uncertainty in global markets. These factors, he said, were likely to adversely impact industrial performance and export volumes while significantly increasing the cost of doing business.Clarifying the business community’s position, Zubair Motiwala said that industries were not asking for subsidized gas. Rather, they were demanding that gas should be supplied strictly on a cost-of-service basis, with tariffs reflecting the actual cost of procurement and supply. He further stressed that gas pricing should not be used as a revenue-generation tool during such difficult times. In this regard, he proposed that gas tariffs should be rationalized to actual cost levels, a transparent and predictable pricing mechanism should be adopted and priority gas supply should be ensured for export-oriented industries.Referring to the growing burden of logistics costs, he said that rising global shipping costs and insurance premiums, exacerbated by regional tensions, had significantly increased exporters’ expenses. He stressed the need to immediately restore freight subsidy and export facilitation schemes to offset these external cost pressures. He stated that the reintroduction of freight subsidy schemes would help exporters maintain access to international markets, preserve pricing competitiveness and meet their contractual commitments.Zubair Motiwala also drew attention to the substantial amount of exporters’ funds that remained stuck in pending tax refunds, creating severe liquidity constraints and increasing reliance on expensive borrowing.He strongly urged the government to release all pending refunds on a priority basis and ensure a time-bound automated mechanism for future processing so that exporters do not continue to face unnecessary financial stress.

ISLAMABAD: The Competition Commission of Pakistan (CCP) has released a study on the solar market, titled, “Unlocking Green Potential: A Market Competition Study of Solar Energy in Pakistan,” proposing targeted reforms to remove entry barriers, enhance market transparency, and boost investment in the solar sector. Read More: https://theboardroompk.com/kse-100-index-recovers-as-pakistan-stock-exchange-gains-on-oil-cement-and-fertilizer-stocks/ The study identifies key structural challenges and outlines practical measures to strengthen grid infrastructure, improve policy clarity, and enforce quality standards, aimed at fostering competition and driving sustainable growth in the sector. Among the key recommendations, the CCP has called for urgent modernization of distribution networks, noting that outdated feeders and substations are ill-equipped to handle two-way power flows from distributed solar generation, leading to voltage fluctuations and limiting net-metering expansion. The CCP has also emphasized the need for a national smart metering rollout and grid automation, including the deployment of advanced systems such as Supervisory Control and Data Acquisition (SCADA) and Distribution Management Systems (DMS), to improve real-time monitoring, reduce losses, and enable efficient integration of renewable energy. Highlighting delays in power market reforms, the CCP has urged the government to fast-track implementation of the Competitive Trading Bilateral Contract Market (CTBCM), suggesting interim measures such as pilot bilateral contracts for renewable energy, particularly for industrial clusters and Special Economic Zones, to unlock cheaper electricity and stimulate competition. The study raises serious concerns over product quality and consumer protection, recommending the establishment of accredited solar testing laboratories, mandatory compliance with international standards, and the introduction of digital verification systems to curb the circulation of substandard and counterfeit equipment. To address regional disparities, the CCP has proposed measures to extend solar benefits to rural areas, including off-grid solutions, targeted subsidies, and concessional financing, noting that current net-metering advantages remain largely concentrated in urban centres. The CCP has further highlighted the growing importance of battery storage technologies, recommending incentives for solar-plus-storage systems and support for domestic battery manufacturing to reduce pressure on the national grid and enhance energy reliability for industrial and commercial users. At the same time, rapid global advances in battery storage, fuelled by electric vehicle (EV) innovation, present Pakistan with a timely opportunity to ease grid pressure and deepen competition in the energy market. To reduce import dependence in a challenging geopolitical climate and amid rising energy costs, the CCP has recommended the introduction of a Production-Linked Incentive (PLI) scheme alongside the development of dedicated renewable energy zones. These measures aim to stimulate domestic solar panel manufacturing, supported by targeted tax incentives, improved access to financing, and strategic international partnerships. Additionally, the study calls for the establishment of a National Solar Registry to address persistent data gaps, improve policy planning, and enhance transparency across the solar value chain. The Commission has placed the draft report on its website for stakeholder consultation.

Islamabad: Global NEV leader BYD, through its official partner in Pakistan, Mega Motor Company, has delivered BYD Atto 2 and BYD Sealion 7 electric vehicles to Islamabad Police, marking the first operational adoption of a new energy vehicle (NEV) fleet by a federal department in Pakistan. Read More: https://theboardroompk.com/kse-100-index-recovers-as-pakistan-stock-exchange-gains-on-oil-cement-and-fertilizer-stocks/ The induction of these vehicles was formally celebrated through an official ceremony inaugurated by Prime Minister Shehbaz Sharif. Inspector General of Islamabad Police, Ali Nasir Rizvi, and Chief Traffic Officer of Islamabad, Muhammad Sarfraz Virk, were also present, along with other senior officials from the department. The fleet has been designated for specific operational roles within the police department, supporting traffic patrol and official mobility. Its introduction will enable Islamabad Police to significantly reduce fuel dependency, lower operating costs, and introduce emission-free mobility into daily policing operations across the capital. The initiative comes at a time when Pakistan is experiencing unprecedented volatility in fuel prices, reinforcing the need for more stable and cost-efficient mobility solutions for institutional use. By transitioning to electric vehicles, Islamabad Police is taking a forward-looking step toward reducing exposure to fuel price fluctuations while improving long-term operational efficiency. Commenting on the initiative, an official from Islamabad Police said: “We are committed to adopting modern, sustainable solutions that enhance operational efficiency while serving the public responsibly. The integration of electric vehicles into our fleet marks a significant step toward reducing fuel dependency and enabling environmentally responsible policing. It also serves as a practical manifestation of the Prime Minister and Interior Minister of Pakistan’s vision for a greener, more sustainable future, with Islamabad Police playing a leading role in advancing this agenda. This initiative lays the foundation for the gradual expansion of our NEV fleet as we continue to modernise our operations in collaboration with BYD.” Commenting on the collaboration, Danish Khaliq, Vice President Sales and Strategy at BYD Pakistan-Mega Motor Company, said the initiative demonstrates how electric mobility solutions can support real-world institutional use cases. “Islamabad Police’s decision to integrate BYD’s electric vehicles into its operational fleet reflects growing confidence in our new energy mobility solutions for real-world institutional use. As the first federal government department to take this step, it sets an important precedent for public sector organisations across Pakistan.