Irish unveil harshest cuts, tax hikes in history

Ireland’s Minister for Finance, Brian Lenihan (L), listens as Prime Minister Brian Cowen speaks during a press conference to announce the National Recovery Plan, in Dublin, on November 24, 2010. Ireland kept its prized low corporation tax on Wednesday, but outlined plans to overhaul income and sales levies, as the debt-laden eurozone nation braced for a multi-billion-euro EU-IMF bailout. Irish Prime Minister Brian Cowen presented a series of tax rises and cuts to public sector pay, pensions and social welfare in a bid to slash a huge deficit and save 15 billion euros (20 billion dollars) by 2014. – AFP Photo

DUBLIN: Ireland has unveiled the harshest budget measures in its history, a four-year plan to slash deficits by euro15 billion ($20 billion) so it can receive a massive bailout from the European Union and the International Monetary Fund.

The austerity plan axes thousands of state jobs, trims welfare benefits and pensions, and imposes new taxes on property and water. In all, it seeks to cut euro10 billion ($13.3 billion) from spending and raise euro5 billion ($6.7 billion) in extra taxes from 2011 to 2014.

Finance Ministry re-evaluating capital gains tax mechanism

KARACHI: The Finance Ministry is re-evaluating the mechanism to implement the capital gains tax on shares’ trading, said sources in the Federal Board of Revenue (FBR).

In February, the Finance Ministry and members of the Karachi Stock Exchange (KSE) reached an agreement under which capital gains tax would be imposed from July 1, but the rate of tax was not disclosed.

SBP limits maximum financing to Rs1bn

The State Bank of Pakistan (SBP) on Monday restricted, with immediate effect, maximum financing limit to Rs1 billion for a single export-oriented project under the Long-Term Financing Facility, according to a statement issued here on Monday.

The decision was taken in view of growing demand, diversify financing and risk, besides accommodating large number of borrowers, the statement said. Since the initiation of Long-Term Financing Facility in 2008, introduced to facilitate export growth, there was no bar on the maximum financing limit for a single borrower.

Auto financing picks up, but banks remain cautious

KARACHI: After a two-year gap, banks have started reviewing their policy on auto finance and have slightly increased auto financing with stringent conditions, said Atif Zafar, auto analyst at JS Research.

Car sales were improving and one of the reasons was that auto finance along with restoring economic confidence had reduced interest rates and seasonal effects, he added.

Auto finance was at its peak during 2006-2007 and its share in car sales was 70 per cent to 75per cent, however in the later years it was almost stooped due to higher interest rates, and most importantly, auto finance default rate was very high and recovery rate was very low which forced banks to do critical review of their auto finance product, he said.

Dr Hafeez Sheikh briefed on debt

ISLAMABAD: The finance ministry higher-ups have informed Finance Advisor Dr Abdul Hafeez Sheikh that the country’s external debt will increase by $2 billion to $60 billion and the domestic debt by Rs424 billion to Rs4.57 trillion by the end of 2010-11.
The officials briefed the advisor recently that there was a need to formulate and adopt a holistic debt management strategy.

Punjab’s overdraft converted into loan

ISLAMABAD: The overdraft borrowing by Punjab from the federal government is within the limit of Rs20 to Rs22 billion, and the federal government has converted it into a loan payable over a period of four years, Punjab Finance Minister Tanvir Ashraf Kaira said in Rawalpindi on Friday. 

It is not only Punjab, but other provinces also face the situation of overdraft since eighty per cent resources come from the federation, he said while addressing the members of Rawalpindi Chamber of Commerce and Industry.

SBP amends consumer financing regulations

Friday, January 01, 2010
KARACHI: The State Bank of Pakistan after review of Prudential Regulations for Consumer Financing and feedback of the stakeholders has made amendments in the regulations.

According to SBP circular addressed to all banks/DFIs here on Thursday, the following amendments will come into effect immediately.

US prepared to give Pakistan more help: Gates

KABUL: US Defense Secretary Robert Gates says the United States is prepared to give Pakistan more help fighting al-Qaeda forces if its government wants it.
 
Gates, who arrived in Afghanistan late Monday, said it is Pakistan’s ‘foot on the accelerator’ when it comes to fighting terrorists. But he said the US could provide more assistance ‘at any pace they are prepared to accept.’

Gates arrived with plans to assure officials and American troops there that the United States is committed to winning the war despite plans to begin pulling forces out in 2011.

12 foreign cos registered with SECP in Nov

By Israr Khan

ISLAMABAD: Despite poor law and order situation in the country due to war on terror, the economy still has potential to attract foreign investors as during November 12 foreign companies registered themselves with the Securities and Exchange Commission of Pakistan (SECP). It sends a strong signal to foreign investors to invest in various untapped sectors of the country.

The 12 companies belong to different countries around the globe including Australia, USA, Russia, Germany, China, Italy, Turkey, Bangladesh, Iraq and Lebanon.

KSE allows short-selling

KARACHI: The Karachi Stock Exchange has introduced speculative trading on the local equity market apparently in a move to bring back investors in a market suffering from low trading volume.

The speculative trading or short selling would be limited to ready market and only for the securities listed on the KSE-30 Index.

Short selling has remained prohibited across the board on KSE for last many years.

Wall Street heads for final stretch

Sunday, December 06, 2009
NEW YORK: Wall Street heads into the final stretch of 2009 with fresh confidence that the worst of the economic crisis is over, setting up a positive environment for the market heading into 2010.

The main US stock indexes notched gains in the week to Friday, buoyed by data showing a sharp turnaround in the job market that offered hopes for a sustained recovery from recession.

Ministries differ on rental power projects

ISLAMABAD: The ministries of finance and water and power have developed serious differences over implementation of controversial rental power projects (RPPs) before their contract clearance by the Asian Development Bank (ADB) under a decision by the federal cabinet. 

Informed sources told Dawn the finance ministry is worried over financial implications of the projects in case these reach the commissioning stage before their proper approval by the ADB and the federal cabinet.

The water and power ministry, on the other hand, is more concerned to meet the Dec 31 deadline, these sources said.