Day: February 22, 2020

FBR starts examining incomes of debt, credit card holders

ISLAMABAD: Federal Board of Revenue (FBR) has started examining incomes of persons making payments through debt and credit cards.

Sources in the FBR said that banks had provided details of persons, who made payments through debit and credit cards above Rs200,000 in a month.

The banks have provided information of transactions made through payment cards during July 01 – December 31, 2019.

The sources said that the banks are required to file bi-annual statement included 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.

The banks are also provide of withholding tax deducted on persons remitting amounts abroad through credit or debit or prepaid cards.

According to Section 236Y of Income Tax Ordinance, 2001, every banking company shall collect advance tax at the rate of one percent at the time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a credit card transaction, a debt card transaction, or a prepaid card transaction with a person outside Pakistan.

The tax collected under this head is adjustable against the payable tax by a person filing income tax return.

February 22, 2020
Weekly Review: Market likely to stay positive on FATF decision

KARACHI: The stock market likely to stay positive during next week on back of conclusion of the FATF review and expected approval of IMF’s third tranch, analysts said.

The analysts at Arif Habib Limited further said that the market would also respond positively to the imposition by the Federal Government on export of essential food items (Onions, Potatoes and Tomatoes) so as to control rising inflation along with deferment of hikes in utility rates till June 2020.

Moreover, improvement witnessed on macroeconomic front, with the Current Account Deficit (CAD) shrinking by 72 percent in 7MFY20 and rising foreign investment in debt securities exceeding the USD 3 billion mark, also augur well.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.9x (2020) compared to Asia Pac regional average of 12.2x while offering a dividend yield of ~6.8 percent versus ~2.8 percent offered by the region.

This week trading activity remained dull and index movement was mixed attributable to concerns over a meeting of the Financial Action Task Force (FATF), convened to ascertain Pakistan’s status (Grey or White List); it became evident by Thursday evening that Pakistan is likely to stay in the Grey List.

On the other hand, investors remained cautious on the back of a strict stance of the International Monetary Fund (IMF) staff to keep the budgeted revenue targets for FY20 unchanged while talks regarding the release of the third tranche remain ongoing. Despite increase in international oil prices by 4.5 percent WoW, Oil and Gas Exploration sector remained under pressure due to foreign selling. As a result, the benchmark KSE-100 index closed at 40,249 points, merely increased by 6 points or 0.01 percent WoW.

Contribution to the upside was led by i) Commercial Banks (+133 points) due to financial result of HBL and UBL was better than expectation, ii) Cements (+20 points), iii) Textile Composite (+15 points), iv) Leather and Tanneries (+11 points), and v) Automobile Parts and Accessories (+9 points).Scrip wise major gainers were HBL (+70 points), UBL (+53 points), OGDC (+37 points), MCB (+34 points), and FFC (+30 points). Whereas, scrip wise major losers were ENGRO (-65 points), PAKT (-54 points), and PSO (-48 points).

Foreigners offloaded stocks worth of USD 8.57 million compared to a net sell of USD 11.15 million last week. Major selling was witnessed in Oil and Gas Exploration Companies (USD -3.02 million) and Cement (USD -2.77 million).

On the local front, buying was reported by Insurance Companies (USD +7.84 million) followed by Other Organizations (USD +3.81 million). That said, average daily volumes for the outgoing week were down by 37 percent to 106 million shares likewise value traded decreased by 23 percent to USD 31.2 million.

February 22, 2020
Customs stops export consignments of onion after ban decision

KARACHI: Pakistan Customs stopped export consignments of onion to comply with government decision to impose ban on the vegetable to meet local demand.

In an letter issued by Model Customs Collectorate (MCC) Exports on Friday to Pakistan International Container Terminal (PICT) stated: “In compliance of directive received from the Headquarters, the loading of all the consignments / containers declared to contain ‘fresh onion’ falling under PCT 0703.1000 stopped immediately till further orders.”

The Economic Coordination Committee of the Cabinet in its meeting on February 19 decided to impose ban on export of onion till May 30, 2020 in order to meet local demand and stabilize prices.

Exporters claimed that due to immediate ban imposed by the customs authorities above 300 containers amounting $3.2 million were stuck up, where loading already allowed and about to load on vessel.

Earlier, on February 20 All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Associations (PFVA) in an SOS to the Advisor to the Prime Minister on Commerce Abdul Razzak Dawood, said that the sudden stoppage would have serious repercussion.

The association said that the exporters on onion had already received advance payments from their foreign buyers for export of onion and with immediate ban, they would be unable to honor their business commitment which would not only put a question mark on their credibility, it would also terribly shake confidence of the foreign buyers.

It further said that the onion exporters had already procured quantity of onion according to orders from foreign buyers for processing the same in their pack houses and the sudden ban on export would lead to colossal financial losses to the exporters due to limited shelf life of the onion.

February 22, 2020