Economic and Business Updates From May 17 to 23, 2010

• THE government revenue and economic advisory committees firm up proposals for federal budget 2010-11, envisaging an outlay of Rs2.488 trillion while targeting Rs1.7 trillion revenue.

• Proposals include value added tax, increase in tax rates or imposition of new taxes on nine major sectors and withdrawal of subsidies on seven major sectors, including wheat, sugar, fertilizer and electricity.

• STATISTICS reveal that oil refineries collected a whopping Rs80 billion as deemed duty from 2002 to 2009, a levy that the Judicial Commission recommended be eliminated from the pricing mechanism.

• PAKISTAN receives a fifth tranche, amounting to $1.13 billion, of a $10.66 billion IMF loan.

• ALL regulators under a policy decision, to be unveiled in Finance Bill 2010-11, will have to deposit sums of money collected from errant regualtees in penalties into the national exchequer.

• THE National Accounts Committee notes that the country’s real gross domestic product grew by 4.09 per cent in 2009-10 against the target of 3.3 per cent.

• THE Oil and Gas Regulatory Authority decides to reduce prescribed prices of natural gas by an average 2.55 per cent or Rs4.53 per unit for all categories of consumers with effect from July 1.

• THE Competition Commission of Pakistan has recommended to the government to work for amending the Pakistan-Saudi Air services Agreement of 1972 to address concerns over lack of competition.

• FOREIGN Direct Investment registers a massive decline of 45 per cent during the first 10 months of the current fiscal year mainly due to poor infrastructure and global economic recession.

• THE government decides to eliminate subsidy on agriculture tube-wells from next fiscal year as part of its commitment with the international financial institutions.

• THE country’s current account deficit narrows down by 66 per cent in the first 10 months of the current fiscal year mainly due to decline in the twin trade deficit and rising remittances inflows.

• THE Finance Act 2010 will introduce from July 1 a new provision in the Income Tax Ordinance 2001 to block import consignments of non-filers of income tax returns and withholding tax statements.

• WORLD BANK withdraws its strong support for Thar coal project. The Sindh government, according to official sources, has termed the WB act as discriminatory.

• GOVERNMENT is projected to allocate Rs114 billion for the power sector during the coming financial year 2010-11, 28 per cent lower than what was allocated in 2009-10.

• THE Federal Board of Revenue issues notice to seven prominent banks, under Section 161 of the Income Tax Ordinance 2001, to recover some Rs3.5 billion levy.