Karachi – In a move aimed at strengthening the administrative core of the Pakistan Customs Service (PCS), the Federal Board of Revenue (FBR) has announced the promotion of three distinguished customs officers from BS-17 to BS-18 on a regular basis, effective immediately.
(more…)Month: March 2019
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Income Tax Ordinance 2001: furnishing customers’ information by banks
KARACHI: Banks are required to provide certain details of their customers and transactions to Federal Board of Revenue (FBR) for subsequent use of identifying new taxpayers and tax evasion.
After the implementation of Finance Act, 2018 and Finance (Supplementary) Act, 2018 there are various changes made to Section 165A of Income Tax Ordinance, 2001 related to furnishing of information by banks.
Section 165A: Furnishing of information by banks
Sub-Section (1): Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—
(a) a list of persons containing particulars of cash withdrawals exceeding Rs50,000 (fifty thousand rupees) in a day and tax deductions thereon for filers and non-filers, aggregating to Rupees one million or more during each preceding calendar month.”;
(b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;
(c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;
“(d) a list of persons receiving profit on debt exceeding one million rupees for filers and five hundred thousand rupees for non-filers and tax deductions thereon during preceding financial year.”
Sub-Section (2): Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.
Sub-Section (3): The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.
Sub-Section (5): Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.
Section 165B: Furnishing of information by financial institutions including banks
Sub-Section (1): Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act,1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of1947) and any regulations made under the State Bank of Pakistan Act,1956 (XXXIII of 1956) on the subject, every financial institution shall make arrangements to provide information regarding non-resident or any other reportable persons to the Board in the prescribed form and manner for the purpose of automatic exchange of information under bilateral agreement or multilateral convention.
Sub-Section (2): All information received under this section shall be used only for tax and related purposes and kept confidential.”
Sub-Section (3): For the purpose of this section, the terms “reportable person” and “financial institution” shall have the meaning as provided in Chapter XIIA of the Income Tax Rules, 2002.
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Cement exports increase by 52 percent in eight months
KARACHI: Pakistan’s cement exports registered unprecedented growth of 52 percent during first eight months (July – February) of fiscal year 2018/2019 mainly on the back of rupee depreciation and focus on low margin exports.
The export of cement rose to 4.65 million tons during first eight months of current fiscal year as compared with 3.05 tons in the corresponding months of the last fiscal year, analysts said on Tuesday.
However, provisional cement data for the month of February 2019 displays a 9 percent MoM decline to 3.33 million tons (January 2019: 3.65 million tons) given surprise rainfalls across the country as well as extension in the winter season, according to analysts at Arif Habib Limited.
On a YoY basis, the slowdown in dispatches appeared more visible at 12 percent led particularly by weakness in domestic dispatches of 19 percent YoY to 2.82 million tons in February 2019.
Albeit, exports remained robust at 0.51 million tons (up by 69 percent YoY) in lieu of Pak Rupee depreciation against US Dollar, domestic over capacity allowing companies to focus on low margin exports, US sanctions on Iran opening up other exports markets for Pakistan as well as wasteful capacity cuts globally.
The analysts said that drop in local offtake was triggered by lackluster demand in North (down by 24 percent YoY to 2.31 million tons) for aforementioned reasons where local offtake underwent a dip of 25 percent YoY to 2.15 million tons.
This took the 8MFY19 total dispatches to 30.09 million tons, stable over SPLY, owed to a stunning 52 percent jump YoY in exports at 4.65 million tons which cushioned the 6 percent dip in local sales at 25.44 million tons.
Further dissection unveiled that South continues to show resilience with growth in total dispatches at 8.25 million tons, up by 49 percent YoY amid a sharp 3x escalation in sea-based exports to 2.79 million tons, whereas local offtake also remained healthy at 16 percent YoY to 5.46 million tons.
On the flipside, the North region sustained continuous pressure with dispatches pulling down by 11 percent YoY; local offtake depicted an identical decline to 19.98 million tons while exports dipped by 16 percent to 1.86 million tons.
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Banking sector profits decline by 7 percent in 2018
KARACHI: The profits of banking sector have declined by 7 percent to Rs149 billion in 2018 as compared with around Rs160 billion in the preceding year, according to analysis of Topline Research issued on Tuesday.
The analysts said that for 2018, despite 10 percent YoY increase in Net Interest Income (NII), profits were down 7 percent YoY (ex-HBL penalty) due to 1.8x higher provision charge, 64 percent lower capital gains and 14 percent higher administrative expenses.
They expect net interest income to expand further due to the lagged impact of policy rate hikes. The analysts anticipate State Bank of Pakistan (SBP) to increase interest rates by further 75 basis points to 11 percent by December 2019.
However, during 4Q2018, Pakistan Banking Sector profitability rose to Rs38.3 billion, up by 6 percent YoY. The increase in profitability is primarily owed to 16 percent YoY increase in net interest income as well as 7 percent increase in non-interest income.
The analysts have taken results of all listed banks that have announced 4Q2018 financial results.
Moreover, for 4Q2018 reversals in pension charge and Workers Welfare Fund (WWF) amounting to Rs4.2 billion and Rs6.7 billion, respectively, also supported the bottom-line we believe.
Net Interest Income (NII) of the banks improved by 16 percent YoY to Rs135 billion in 4Q2018 as a result of a cumulative 425 basis points hike in policy rate during 2018.
Similarly, on a sequential basis, NII is up 10 percent as the lagged impact of asset re-pricing kicked in.
To note, SBP has raised policy rate by 425 basis points in 2018, with 150 basis points coming in 4Q2018.
Comparing the big-5 (MCB, HBL, UBL, ABL, NBP; profits down 24 percent YoY) versus the rest under our coverage (MEBL, BAHL, BAFL, AKBL), the analysts see that mid tier banks have outperformed their larger peers due to better sensitivity to interest rates as well as absence of significant provision charge during the outgoing quarter.
Profits of Mid-tier banks are up 32 percent YoY (they excluded BOP from mid tier numbers due to substantial one off provisioning in 4Q2017).
Despite 16 percent YoY growth in net interest income, profitability growth was contained to 6 percent YoY primarily due to high provision charge specifically by the large banks including HBL, UBL and NBP.
Cumulatively, total provision charge by the said three banks for 4Q2018 was Rs15.7 billion (around 73 percent of total provision by the sector), with NBP, UBL and HBL charging Rs6.8 billion, Rs5.6 billion and R3.3 billion, respectively.
Overall, the sector booked provision charge of Rs21.5 billion compared to Rs13.3 billion in the same period last year.
To note, BOP booked significant provision charge of Rs12.7 billion during 4Q2017 compared to reversal of Rs137 million in 4Q2018.
NBP booked significant provision charges on its loan portfolio, specifically with regards to its exposure to Omni group, the analysts believe. Similarly, majority of UBLs charge was related to NPLs (Rs5.0 billion) mostly from its international loan book and most of HBLs booked charge was also on account of NPLs (Rs2.3 billion).
Despite lower capital gains and dividend income, Non-interest income of the banks rose by 7 percent YoY mainly due to 17 percent higher fee income and 86 percent higher income from dealing in foreign currencies.
They attribute higher non-interest income to rapidly growing loan book, higher trade volumes as well as rupee depreciation.
Admin expenses grew by 20 percent YoY while non-interest expense rose by 14 percent YoY. The growth in non-interest income was contained due to reversal in provision for Workers Welfare Fund (WWF) by select banks (Rs6.7 billion in total).
Cost to income of the sector increased by 3.1ppts YoY to 64.2 percent in 4Q2018.
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PM approves 20pc trade officers’ quota for overseas Pakistanis
ISLAMABAD: Prime Minister Imran Khan has approved quota of 20 percent for appointing overseas Pakistanis to the post of trade officers in Pakistan’s missions abroad.
The decision was taken during a meeting regarding reforms in posting of Trade Officers Abroad, a statement said on Tuesday.
It may be recalled that the prime minister had directed the ministry of commerce to revamp the entire system of postings of trade officers who are posted abroad to promote trade and commercial interests of the country.
The new policy approved by the prime minister focuses on transparent and merit-based selection of the trade officers, market diversification, involvement of Pakistani diaspora, rationalizing the expenditure, broad-based monitoring and performance evaluation and automation of the processes.
To effectively promote commercial interests of the country especially in the emerging markets and various regions across the globe, trade clusters have been focused in the new policy to ensure optimum utilization and maximum outreach of the trade officers.
The prime minister was informed that in order to ensure broad-based and real-time monitoring of the performance of the trade officers, the entire evaluation process has been made IT-based.
Secretary Commerce Mohammad Younus Dagha also briefed the prime minister about National Trade Data Analytics System which is being developed by the ministry.
The National Trade Data Analytics System with its comprehensive database of trade statistics, exporters/importers directory, product database and trade lead insight will help in better evaluation and promotion of trade interests of the country.
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New LNG terminal: Instructions issued for completing formalities
ISLAMABAD: Finance Minister Asad Umar on Tuesday issued instructions for expeditiously completing formalities for setting up new LNG terminal at Port Qasim.
The finance minister issued the directive while chairing the meeting of Economic Coordination Committee of the Cabinet (ECC) on Tuesday. The committee considered proposals from different ministries/ Divisions.
Ministry of Maritime Affairs briefed the ECC on matters relating to establishment of new LNG terminals at Port Qasim.
The committee was informed that the Port Qasim Authority was looking at various choices with a view to find the most viable option.
The committee gave instructions to expedite the matter and directed for completion of all formalities for setting up the new terminal expeditiously keeping in view the growing energy needs of the country.
ECC approved proposal of Ministry of Energy based on request by Pakistan Petroleum Ltd for allocation of up to 9 mmcfd gas from Fazl X-1 field in distt Matiari to M/S SSGCL.
The Committee also considered and approved various proposals relating to Supplementary grants. It may be recalled that such grants were previously approved by the Ministry of Finance, however in order to make the process more transparent, these are now considered and approved at the ECC/ Cabinet level.
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Equity market ends down by 61 points on selling
KARACHI: The equity market ended down by 61 points on Tuesday due to selling pressure during the day.
The benchmark KSE-100 index closed at 39,688 points as against 39,750 points showing a decline of 61 points.
Analysts at Arif Habib Limited said that market opened on a positive note with +25 points and 4 million shares at the opening bell, all of which traded in BOP.
Investors reposed confidence on BOP consecutively and throughout session stock price maintained trades above opening price.
Banking sector topped the traded volume with 76 million shares, out of which around 67 million is attributed to BOP.
Besides, Textile sector also came in the lime light today, where NCL remained prominent with ~7 million shares.
Market came under selling pressure near mid day which was mainly caused by concerns over anticipation of escalation of situation between Pakistan and India.
Sectors contributing to the performance include Banks (-51 points), E&P (-42 points), Cement (-25 points), Insurance (-14 points), Misc (+22 points) and Fertilizer (+15 points).
Volumes declined slightly from 168mn shares to 164 million shares (-2 percent DoD). Average traded value however remained the same at US$ 42 million.
Stocks that contributed significantly to the volumes include BOP, KEL, NCL, PIBTL and TRG, which formed 55 percent of total volumes.
Stocks that contributed positively include PSEL (+20 points), DAWH (+19 points), THALL (+11 points), KEL (+8 points), and GLAXO (+8 points). Stocks that contributed negatively include HBL (-24 points), PPL (-21 points), OGDC (-17 points), PSO (-11 points) and LUCK (-11 points).
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Rupee sheds five paisas against dollar
KARACHI: The Pak Rupee ended down by 5 paisas against dollar on Tuesday owing to demand for import and corporate payments.
The foreign currency market ended at Rs138.73 to the dollar as compared with last Friday’s closing of Rs138.68.
The foreign exchange market was initiated in the range of Rs138.75 and Rs138.80. The market recorded a high of Rs138.80 and low of Rs138.68 and closed at Rs138.73.
Currency experts said that the market opened after two weekly holidays and the demand was higher for import and corporate payments.
The local currency however ended in the open market.
Buying and selling of dollar was recorded at Rs138.50/Rs139.00, the same previous day’s level, in cash ready market.
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MCC Preventive announces auction of vehicles on March 07
KARACHI: Model Customs Collectorate (MCC) Preventive Karachi has announced auction of used / old vehicles to be held on March 07 at Anti-Smuggling Organization (ASO) Headquarter, East Wharf, Karachi.
Following vehicles will be presented for the auction:
01. Mitsubishi Pajero Jeep ( Used) GS-2000 Model-1994 Reg.GS-2000 / V46 – 4034791
02. Used Lexus Car – Reg No. UC-868 -Model-2006 – 3450 cc JTHBG 963905034702
03. Used Toyota Premio Car VVT – Reg No. AAH-747 – Model-2007, chassis number ZZT240-0140149
04. Used Toyota Hilux Surt (SSR-X) Fake Plate-BC-5613 – Model-2000 (As per Seat Belt) – 2693cc, Chassis No-RZN-185-0040781 / Engine No.3RZ-FE
05. Used Toyota Harrier Jeep – Reg.No-JAA-454 – Model-1998 – 2999cc, Chassis No-MCU-10-0013510 – Engine No- IMZ-FE6688090.
06. Used Toyota Hilux Surf -Reg.No-CP-0693 / Model-1990 / 2958cc, Chassis No- LN-130-0009771
07. Used Honda Saloon Accord Car / Reg. No-BFT-418 / Model-2003 / 1990cc,Chassis No-LC7-3006339 / Engine No-33101802
08. Used Toyota Land Cruiser PARADO / Reg. No-BD-9380 / Model 1998 (As per Seat Belt) / 2657cc, Chassis No-RZJ-90-0002888 / Engine No-3RZ-FE(As per Tickly)
09. Toyota Hiluc Surf SSR-X-3.0 / Reg.No-BD-8045 / Model-KD-KZN130W-GKPQT / 2962cc, Chassis No-KZN 130-9048116 / Engine No-IKZ-TE.
10. Used Mercedes Benz(AG) FAKE Reg. No-AB-1001 / 2999cc, Chassis No-WDB1240312B476728.
11. Used Toyota Mark-II Saloon Car / Reg. No-BBL-708 / Model-2000 / 1800HP, Chassis No-JZX110-6000922 / Engine No-1JZ-075-075010
12. Used Toyota Land Cruiser Prado Jeep / Reg. No-BC-5212 / Model-1994 / 2982cc, Chassis No- KZJ-78-0015267 / Engine No-1KZ-TE
13. Used Toyota Hilux Surf / Reg.No-BD-1688 / Model-1994 (As per Seat Belt), Chassis No- LN-130-0123784.
14. Used Toyota Land Cruiser PARADO Jeep – Model-1996 – 3000 cc – BF-8154, Chassis: KNJ 95-0037200 – Engine-IKZTE 0206429
15. Used Honda Accord – Reg, AUX – 934 – Model – 2004, CL7310078
16. Used Mercedes Benz Car – Model-2001- 230 SLK -2000cc, WDB2037452A272217
17. Used Toyota AXIO-X car – White Colour – Reg.No.BFE-068 – 1496 cc – Model-2007, Chassis : NZE-141-6028039 / Engine : INZ-C0360547
18. Toyota Primo Car Used – Reg. No. AAM-095 – Model-2005 – 1794 cc, Chassis: ZZT-240-5039822 / Engine: IZZFE-12557
19. Used Honda Civic Saloon Car – White Colour Reg. No: AAM-988 (Quetta) – Model-2007, Chassis : FD-31001100 / Engine: MF-5100586 – 1800cc.
20. Used Toyota Land Cruiser Jeep – Silver Colour – Reg. No. BG-1131 – Model-1989 – 3431 cc., Chassis: BJ 60-023765 – Engine : 3B-1098887 (As per Reg.Book).
21. Used Toyota Corolla Car – Model – 2015, Reg. No. BDE-852 – Chassis No-NZE170R4016729
22. Used Toyota Crown Saloon Car – Model – 2004, Reg – BHK-012 – Chassis No-GRS182-5014910 – Engine-3GR-FSF – 2994 cc.
23. Used Toyota Saloon Car XE – Model-1999 – 1500 cc, Chassis No-AE-100-5171778 – Engine-SA-FE – 1500 cc.
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Rupee falls by 12 paisas against dollar in early trade
KARACHI: The Pak Rupee depreciated by 12 paisas against the US dollar in early trade on Tuesday owing to high demand for import and corporate payment.
The dollar is being traded at Rs138.80 in interbank foreign exchange market. The exchange rate was ended a day earlier at Rs138.68 in the foreign exchange market.
Currency dealer said that due to higher demand of dollar for import and corporate payment the rupee was witnessing decline.