Capacity tax: FBR increases tax burden on beverage industry

Officials voiced concerns that three bottlers of a multinational brand were calling the shots. PHOTO: FILE

ISLAMABAD: 

The dispute over capacity tax deepened on Friday after the federal government increased tax rates on production capacity of aerated water in the range of 60% to 70% succumbing to pressure from three manufacturers.

The rates of capacity tax on production of aerated water were increased for all the three categories, according to a notification issued by the Federal Board of Revenue (FBR). This has increased the burden not only on small manufacturers that have already gone to court but also on major players except for the three.

The FBR increased the tax rates despite the fact that Finance Minister Ishaq Dar and FBR Chairman Tariq Bajwa had reservations over the capacity tax regime, said sources.

These three were allegedly being given benefits for being financiers of the ruling party, the sources added.

According to industry sources, other main bottlers having manufacturing licences for Lahore and surrounding areas, Karachi and allied territories, Sukkur and Islamabad-Peshawar have decided to knock the door of courts. There is a possibility that the manufacturer covering Islamabad and Peshawar may go to court in the second phase.

According to the notification, the tax rate of Rs4.7 million per filling valve or spout on factories, which only have foreign-origin filling machines or a mix of foreign and local-origin machines, has been increased 60% to Rs7.5 million.

Tax rate for the second category, which includes factories using local machinery, has been increased from Rs3.76 million per filling valve to Rs6 million, an increase of 61.2%.

For the third category, which includes factories with less than 40 filling valves or spouts, the rate has been increased from Rs1.2 million per filling valve to Rs2 million, up 70%.

The system was highly unfair as the tax rate on higher-speed filling valve and lower-speed filling valve was the same, giving benefit to major players, said a small manufacturer whose company has already gone to court.

The increase in tax rates left the manufacturers with no option but to increase prices of aerated waters, said a big manufacturer, who has decided to file a petition against the government.

The change in the mode of taxation from percentage to fixed amount has already made many small and medium-sized players uncompetitive. In current year’s budget, the PML-N government increased the federal excise duty on aerated water from 6% to 9%. However, on the recommendation of the three players, the capacity tax was introduced.

The three had assured the government that with the change in tax regime, the FBR’s collection from the beverages industry will rise 25% compared to previous year. In the last fiscal year, the FBR had collected Rs30 billion.

However, in the first half of current year, the results were dismal, proving the three players wrong, according to FBR officials. Now, tax rates have been revised to prove that their claims were achievable.

Despite a significant increase in the tax rates, the obligations of the three players were not likely to go up, as they were under-declaring their capacity to evade taxes, said sources in the beverages industry.

Through the same notification, the government has capped tax refunds of the beverages industry at 72% of payable gross amount. This will also increase the cost of doing business.

For instance, on a payment of Rs37.5 million, the FBR will hold Rs3 million in refund. This will block working capital of the manufacturers, as the FBR has had a bad track record in paying the taxpayers’ rightful refunds

Energy import: LNG terminal case referred to prime minister

Finance minister Ishaq Dar presides over the ECC meeting on Wednesday. PHOTO: PID

ISLAMABAD: 

After opposition from the Law ministry, the apex economic decision making body on Friday could not decide the fate of the $1.4 billion Liquefied Natural Gas Services Terminal project, and referred it to Prime Minister Nawaz Sharif for approval. 

Headed by Finance Minister Ishaq Dar, the Economic Coordination Committee (ECC) of the Cabinet had been convened to consider a proposal of awarding the contract of setting up a terminal for import of liquid natural gas (LNG) for a period of 15 years. Last Wednesday, the ECC had deferred the summary approval after the Law secretary disclosed that the Petroleum Ministry did not send a summary to his ministry.

The Ministry of Petroleum and Natural Resources had proposed to award the contract to Elengy Terminal Pakistan Limited (ETPL) – a company owned by the Engro Group. ETPL had been selected through a competitive process, during which the bid by Pakistan Gas Port Limited (PGPL) had been knocked out at the technical stage.

The Secretary Ministry of Law and Justice, Barrister Zafarullah Khan, questioned the authority of the ECC in taking decisions on matters which are purely commercial in nature, according to officials. He also highlighted that after the 18th Amendment in the constitution, the ECC cannot direct the Oil and Gas Regulatory Authority to give policy guidelines on any matter. Such powers rest with the prime minister, he told the ECC.

“In light of the detailed discussion, the ECC decided to approve the proposal in principle, subject to completion of all formalities as indicated by the Law Division and thereafter approval of the Prime Minister,” said a statement issued by the Ministry of Finance.

It added that the Law secretary informed the ECC that in light of the 18th Amendment, Article 90(1) of the constitution lays down that the Executive Authority of the Federation shall be exercised in the name of the President by the federal government, consisting of the Prime Minister and the federal ministers, which will act through the Prime Minister.

Since 2006, Pakistan has been making unsuccessful attempts to import LNG. The country has already entered into negotiations with Qatar to import LNG but before that it needs to set up a terminal. Sui Southern Gas Company (SSGC) and ETPL have already negotiated LNG Services Agreement under which the SSGC will pay $0.66 per million British thermal unit charges to the ETPL. The contract will be awarded for a period of 15 years and on the basis of ensured import volumes, the country will pay $1.4 billion to the company in 15 years, roughly $93 million per annum.

The company is supposed to set up the terminal within 335 days of the signing of the contract. It will have to pay $150,000 per day penalty if it fails to meet the deadline, according to an official of the company. However, if the government fails to bring supplies after the completion of the project, it will have to pay the ETPL the guaranteed amount.

Regarding the approval of the contract as agreed by SSGC and ETPL, the Secretary Law opined that it was a commercial contract between the two commercial entities and their respective Board of Directors are competent enough to grant approval in respect of LNG Service Agreement.

After the Law secretary’s opinion, the ECC did not agree with the Petroleum secretary’s plea to approve the project as it was of paramount importance to meet the urgent energy needs of the country.

Bundesliga butchers: Where on Earth do Bayern expect to play Draxler?

The Bavarians have admitted their interest in bringing the Schalke star to the Allianz Arena, but have absolutely no need for the 20-year-old

COMMENT
By Enis Koylu

It was news that surprised few, but shocked so many. When Matthias Sammer publicly expressed Bayern Munich’s interest in signing Germany wonderkid Julian Draxler, there was a sense of deja vu to it all; the Champions League holders attempting to lure yet another top Bundesliga talent to the club. 

On the face of it, the German champions moving for Draxler makes perfect sense. Though a Schalke boy through and through, the 20-year-old has always seemed destined for bigger and better things and Bayern would help him achieve his goals. 

However, scratch the surface and it is all cynically familiar. Bayern have long made a habit of monopolising the top talent in Germany, signing the best players not just to strengthen their own squad, but to weaken that of potential rivals. 

BAYERN'S BIG BUNDESLIGA BUYS
Player	From	Year	Fee
Pizarro	Bremen	2001	€8.2m
Kovac	Leverkusen	2001	€8.25m
Ballack	Leverkusen	2002	€6m
Ze Roberto	Leverkusen	2003	€12m
Lucio	Leverkusen	2004	€12.5m
Klose	Bremen	2007	€15m
Podolski	Koln	2007	€10m
Gomez	Stuttgart	2009	€30m
Neuer	Schalke	2011	€22m
Gotze	Dortmund	2013	€37m
Lewandowski	Dortmund	2014	Free

 President Uli Hoeness, who made his fortune in the meat trade, has taken to butchering his side's rivals.

They may have a fantastic history of breeding players of their own; Franz Beckenbauer, Gerd Muller, Paul Breitner and more recently Bastian Schweinsteiger and Philipp Lahm all emerging through the ranks in Munich and into the annals of German football history. But, the Bavarians have been massively supplemented by players and coaches poached from domestic competition. The likes of Lothar Matthaus, Michael Ballack, Lucio, Ze Roberto, and of course Mario Gotze, who have been captured from their nearest rivals. Even sporting director Sammer himself.

The teams left reeling from their aggressive transfer policy are numerous: Werder Bremen, Bayer Leverkusen and even Karlsruhe built fine teams, but their best players - the Miroslav Kloses, Ballacks and Oliver Kahns - were plundered by Bayern. 

Eintracht Frankfurt will lose one of their key players, Sebastian Rode, to the German champions in the summer and club president Heribert Bruchhagen is in no doubt as to what attracts them to the Allianz Arena. 

“Why does Sebastian want to go to Bayern? My God, these are young people. They can earn four times as much money at Bayern as they can here. End of story.” 

And now they are taking their old policy to new levels. Robert Lewandowski is set to join Gotze at the Allianz Arena in the summer from Borussia Dortmund, effectively hammering the final nail into the coffin of the team who stole Bayern’s German hegemony between 2010 and 2012. 

But while Gotze was to an extent required to ease the creative burden on Franck Ribery and Arjen Robben, and Lewandowski will be an upgrade on Mario Mandzukic, it is hard to find any on-field reason to move for Draxler. 

The Gladbeck native’s performances this year show that he still has a lot to learn and would struggle to challenge more experienced campaigners for a regular spot in the team. He deserves a club that would treat him with patience if he chooses to leave the Veltins Arena. Gotze, Ribery, Robben, Thomas Muller and Toni Kroos would all be ahead of him in the pecking order. What’s more, if Bayern were to make another big-name signing this summer, they would be far better off bolstering their defence than their attack.

Moving to Bayern is far from a guarantee of success, too. Manuel Neuer has blossomed into one of the world’s best, and most decorated, goalkeepers since switching to Munich, but Lukas Podolski - though his medal collection grew - found himself desperate enough to return to struggling hometown club Koln.

Until recently, the Bundesliga boasted something La Liga, the Premier League and Serie A could not: genuine unpredictability which could see a minnow stun everyone and claim the title. But this has now ended and it has become the most predictable league in Europe.

And football needs competition to thrive. In the business world, companies who try to introduce a monopoly on a product are duly punished, just as Microsoft were by the US government in 1998. 

The Bundesliga has grown into one of the most popular leagues in the world in recent years, but Bayern - while breaking no rules - are going a long way to destroying the product they were instrumental in creating by eliminating all of their rivals. 

Signing Draxler, a player they hardly need for sporting reasons, would see them descend into self-parody and represent another nail in the coffin of what was once a brilliant league.

Miniature Messi: Introducing new Barcelona wonderkid Alen Halilovic

The Dinamo Zagreb wonderkid has announced that he will be signing for the Catalans on a five-year contract. But just how good can the teenager become?

PROFILEBy Luke Matthews

It was a winter of discontent for Barcelona in the transfer market. Not only did they not sign anyone, but the chaos surrounding Neymar's transfer last summer saw their president resign and the club accused of tax fraud allegations that they continue to deny.

However, a month on from the madness of the January window, the Catalans have got back into the swing of poaching the best talent on the planet by swooping for Croatian wonderkid Alen Halilovic in a deal worth an estimated €10 million from Dinamo Zagreb.

Although the move is yet to be officially confirmed by either club, the 17-year-old took to social media to share his joy with the world that he has signed for Gerardo Martino's men.

"Thanks Dinamo Zagreb for everything!!" the three-times capped Croatia international wrote on his Instagram account. "My first club and biggest love!! Now is time to move on to Barcelona."

Halilovic has undeniable talent and, considering Dinamo's modest financial status, it was no surprise that the likes of Real Madrid and Manchester United have been scouting him since he emerged as a star-in-making 17 months ago.

His debut off the bench in September 2012 in a 3-1 win over bitter rivals Hajduk Split made him the youngest ever debutant in the Croatian top flight at 16 years and 102 days. Ten days later the attacking midfielder broke another record - this time becoming the league's youngest ever goalscorer after netting with a superb Lionel Messi-esque chip.

Despite the clamour of interest, it was Barca who convinced him to part with Dinamo in June - when his first professional contract ends - to give him the chance to link up with the likes of Lionel Messi in the distant future.


Miniature Messi | Halilovic has been likened to the four-time Ballon d'Or winner and future team-mate
Far from concidentally, the left-footed youngster's pace, dribbling ability, deadly finishing and deceptive strength considering his small frame have earned him comparisons to Barca's Argentine superstar - perhaps prematurely.

Barca are certainly getting a player with huge potential, a player who could develop into a world class attacker, but the fee of €10m is in danger of immediately piling the pressure on the teenager's shoulders.

Since he first shone at Dinamo early last season, there have been further flashes of brilliance but Halilovic has struggled to maintain consistency in a team where, in recent years, the likes of Mateo Kovacic and Milan Badelj dazzled at a similar age.
 
Still, Halilovic has an ability that only the top attacking players in world football possess: to ghost past players with ease in the final third. It’s this talent which undoubtedly persuaded Barca to fork out such a sum for a teenager despite already having what appears to be a conveyor belt of talented attackers emerging from their B team.

If Halilovic is to be a success at Camp Nou, Barca must keep the pressure off the young Croatian. This points to immediately putting the player to the B team to continue his development, alongside players of a similar age and talent.
 
Dinamo could never offer Halilovic a similar alternative - he embarrassed opponents at times representing Dinamo’s youth teams but the pressure, at times, has proven a little too much in front of the roar of the Maksimir Stadium. With that in mind, B team football could prove to be the perfect tonic for Croatia’s biggest talent.

Upon his emergence from the Dinamo youth ranks, there was genuine belief within the club that Halilovic was the best player in a generation to emerge from a club which has produced the likes of Luka Modric and Niko Kranjcar. Now he begins his road to leaving those names in the dust and living up his miniature Messi moniker.

Salman Toor: Using his canvas to alter reality

Artist melds consumer and social fantasies perpetuated with a Renaissance-era spirit of light, technique and idealism.

LAHORE: 

Every time he works in the studio, he is compelled to create a masterpiece, like it’s the last painting he’ll ever paint. This is Salman Toor, a painter who graduated from The Pratt Institute with an MFA in 2009.

Traditional storytelling devices attract him — such as the way narratives unfold in the fiction of Daniayal Mueennuddin, the 19th century French writer, Guy de Maupassant, children’s storybooks and illustrations, and the Renaissance compositions of colourful Venetian painters like Paolo Veronese. He doesn’t expect the common reader to know the significance of these painters, but it might be enough to know that they were Christian painters who rediscovered the Roman love affair with the human body. They created decorations for the churches and palaces of Venice during the economic boom, now known as the Venetian Renaissance.

The main challenge for Toor is to use the sensual qualities of paint and the human body in a context larger than itself. Toor says, “When I paint, one of the things I think about is the ubiquitous (and quite tiresome, given the prevalence of Smartphone use) role of photography in today’s world.”

He believes that painting can only be relevant if it transforms our perception in a way that photography possibly cannot. The way the world is edited when reality is translated by a draftsman on to a plain surface, is where the magic of figurative paintings resides. A painter can exercise the kind of total tyrannical control over the image, in a way that photography cannot.

Skill is usually considered quite a useless thing in today’s art world (with a few famous exceptions). What matters most is the gesture, the concept, the bare distillation and ambitious scale. “In that respect I feel like I have more in common with a talented local carpenter than I do with a contemporary visual artist (except for my education). Uncomfortable situations that describe the identities of participants of our society are particularly fun to paint for me,” he says.

In his paintings, poverty, glamour and beauty oscillate between caricature and reverence in a land of daisies and four-leaved clovers. He often uses smiling faces in his work, because sometimes images or poses are culled from advertisements, but when they’re translated in paint, the images that look mundane and forgettable acquire a foreboding quality under the veneer of frivolity.

He tries to meld consumer and social fantasies perpetuated by the mass-media of urban India and Pakistan, with a Renaissance-era spirit of light, technique and idealism in order to present a unique vision of the complexities and exchanges between South Asian popular culture and the historical traditions of Western idealization.

Maid with flowers 

One of his recent paintings, Maid with Flowers, has been made using oil on canvas. It’s a maid with a vase of flowers on a tray with teacups, walking in an imaginary cartoony landscape. You can see a glimpse of it at the bottom. The landscape consists of rolling hills, poplar trees and a cosy little hut, similar to art seen on truck-art and calendars with Swiss landscapes. The landscape represents the vulnerability of the liberal upper and middle classes, whose wonderland is as thin as a soap bubble. Toor says, “This story gives me a chance to combine two very different worlds: one of all the possible implications of the servitude of an attractive servant girl, and the other of the world of Alice’s adventures in wonderland, Hansel and Gretel, Jack and the Beanstalk, and The Little Mermaid.”

Schoolgirls

Schoolgirls was made using Charcoal & Ink on Paper. With this drawing, Toor started out wanting to do a cartoon of a schoolgirl, but it developed into an actual person. The idea of a schoolgirl in this country has been transformed in the past few years.  She is the essence of all things vulnerable and innocent. She is a popular victim of the tyranny and terror of religious fanatics. This is the feeling about a schoolgirl he wanted to convey in the picture. He wanted her to be like Little Red Riding Hood in a seemingly safe setting with cute little flowers and streams and old trees. Toor said, “In this way I hoped to give a sense of her cluelessness with regard to the rites of passage of a potentially dangerous place.”

Toor is inspired by the best moments of over 300 painters, whose works are primarily in museums in Europe and the United States — Anthony Van Dyck, Rubens, Velazquez, Titian, Bernardo Strozzi and Veronese, to name a few

Health experts emphasise media's role in spreading polio awareness

PHOTO: FILE

KARACHI: Health experts believe that the role of the media is crucial when it comes to reporting on polio, for if done effectively, it can help understand where the problems actually exist.

This was the consensus at the one-day training held for journalists on reporting polio. The event, held at the Pearl Continental Hotel on Thursday, was organised by the United Nations Children’s Fund (UNICEF) in collaboration with the Extended Programme on Immunization (EPI) Sindh and the World Health Organization.

Explaining the precarious situation and threats of polio cases in different parts of the country, especially in Karachi and Peshawar, experts urged that it was the need of the hour to involve all the people of Pakistan to save the country’s future.

“Pakistan’s position was much better than India in 2010 and the neighbouring country has almost overcome the situation. We can do it too,” stressed Dr Iqbal Ahmad Memon, the president of Pakistan Pediatric Association Centre. “The EPI centres should be visible and accessible to the general public as they could voluntarily visit them.”

Appreciating the government’s efforts and responsibility, Dr Memon said that Rs17,000 to Rs18,000 are being spent on each child, saying that over 98 per cent of the issue has been resolved across the world since 1988 due to vaccination.

“If there is no polio case reported for three consecutive years, it means that the country is polio-free,” he said.

Dr Durenaz Jamal, the EPI Sindh’s deputy programme manager, admitted that 2013 was not a good year for Sindh.

“At least ten polio positive cases surfaced and all possible efforts are being taken to overcome the situation this year,” said Dr Jamal.

Briefly elaborating on the situation across the province, Dr Jamal said that the Sindh government was seriously considering replicating the polio drive in Peshawar.

“Eight cases were reported in Karachi in 2013 as compared to zero case in 2012 and nine cases in 2011,” she briefed.

“The responsibility of the media is very important and without understanding the issue, reporting on sensitive issues like polio is very difficult,” said Badar Alam, the editor of Heraldmagazine. He advised participants not to rely on single sources, saying to be accurate, brief and clear on every story.

Tahira Yasmeen, a social worker who works in Karachi’s high risk area, Gadap, appealed to the media to report positively instead of creating hype. “This will only disturb our efforts. We need to take extra care when reporting polio stories.”

An office bearer of the Rotary International, Asher, said that his organisation was involved in polio eradication tasks in various parts of the country, including the country’s borders as well as Sindh’s.

According to him, the implementation plan was being enforced in Sindh’s Mirpurkhas, Karachi’s Gulshan-e-Iqbal Town, as well as Peshawar, Nowshera, Quetta, Loralai and Turbat

2,000-km march for 'missing' persons nears end

Relatives of missing persons pass through a road during Long March rally. PHOTO:PPI

RAWALPINDI: After 2,000 gruelling kilometres on the road, a band of families led by a 72-year-old are due to reach the end of their protest march over missing relatives in the federal capital on Friday.

They are the relatives of people who have disappeared in Balochistan, allegedly at the hands of the country’s security services.

The marchers, led by a retired banker known as Mama (uncle) Qadir, hope to present a petition to UN officials in Islamabad and meet foreign diplomats to raise awareness of their cause.

“We want to tell (the world) that people are being kidnapped every day in Balochistan, districts are being bombarded and almost every day we are receiving mutilated bodies,” Qadir told AFP on the road close to Rawalpindi.

“We have no more hope in the Pakistani government, which is why we want to talk to international organisations, so they can apply pressure.”

Qadir’s son Jalil Reki, a member of the Baloch Republican Party which is suspected of links to the armed insurgency, was found shot dead in 2011 after going missing.

The marchers set out from Quetta last October, walking first 700 kilometres to Karachi, on the shores of the Arabian Sea, before turning their steps northwards to Islamabad, nestling in the foothills of the Himalayas.

Balochistan, the size of Italy and rich in copper, gold and natural gas, is Pakistan’s largest but least populous province.

It is also the least developed, which has exacerbated a long-running ethnic Baloch separatist movement that wants more autonomy and a greater share of its mineral wealth.

The latest armed insurgency rose up in 2004 and separatist groups still regularly attack Pakistani forces.

Rights groups accuse the military and intelligence agencies of kidnapping and killing suspected Baloch rebels before leaving their bodies by the roadside.

According to Human Rights Watch, more than 300 people have suffered this fate – known as “kill and dump” – in Balochistan since January 2011.

The security services deny the allegations and say they are battling a fierce rebellion in the province.

The Supreme Court has also been investigating cases of missing people in Balochistan, issuing warnings to the government to recover these people.