The Federal Board of Revenue (FBR) has issued an invitation to business chambers and associations to submit their sales tax and federal excise proposals for the upcoming budget 2020/2021. The primary aim is to eliminate flying invoices and tax fraud while broadening the tax base and increasing revenue.
(more…)Month: February 2020
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Stocks falls by 1051 points on covid cases confirmation
KARACHI: The stock market fell by 1,051 points in early trading on Thursday after coronavirus cases confirmed by the government authorities.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is current trading (10:30AM) at 37,287 points losing around 1051 points.
The coronavirus haunted the stock market since start of this week. Today the market fell sharply after two cases of coronavirus were confirmed by the health ministry last night.
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OICCI recommends price deregulation of petrol, diesel
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended front and back-end price deregulation of petrol and diesel for downstream oil refining and marketing sector.
For the Upstream oil and gas exploration sector, the OICCI recommended besides the estimated 30 onshore blocks that may be available for bidding, offshore blocks should also be considered and about 5-10 blocks should be offered every 3-6 months, so that there is a steady flow of new acreage to accelerate indigenous E&P activities.
Moreover, an Integrated Energy Planning (IEP) approach must be adopted and components of the Power Value Chain should be liberalized to bring operational efficiency and reduce energy costs.
The overseas investors’ chamber made these recommendations in its Energy Report 2019 launched on Wednesday.
The report is based on the recommendations of the 31 leading international energy sector companies operating in Pakistan, which are members of the chamber.
Pakistan’s energy sector has witnessed significant transformation over the past five years, with the power generation capacity increasing rapidly to over 39000 MW by mid-2019, with the inclusion of two large RLNG based power plants, Thar coal project and imported coal-based power plants leading to a major shift in the energy mix. Despite the relative fast paced increase in the generation and transmission capacity, over 60 million Pakistanis do not have access to electricity from the grid, which not only impacts the economic growth of the country, but the economic exclusion has a social impact also.
On top of this, the mounting circular debt, in excess of Rs 1.9 trillion, and the inability of distribution companies to arrest the ever increasing technical and non-technical losses, continue to burden the national exchequer by an additional Rs 40-50 billion annually.
Presenting the report, CE/Secretary General, OICCI, M. Abdul Aleem commented that “OICCI Energy Report 2019 includes a number of recommendations to streamline the Oil and Gas and Power sectors.
“The Ministry of Energy is playing a pivotal role in introducing structural reforms to address Pakistan’s prevalent energy issues. However, it is imperative that relevant stakeholders, such as the OICCI, are involved for these to be successful” commented M. Abdul Aleem adding that “OICCI is aware of the government’s plan to offer 18 onshore exploration blocks for bidding, approval for 5 LNG companies to set up regasification terminals at Port Qasim and initiative to develop an Integrated Energy Plan.”
OICCI Energy Report 2019 is the collective effort of the 31 OICCI members belonging to the energy sector, who are associates of leading international players working in the areas of oil exploration, refining, marketing and distribution, coal mining and power generation segments.
They cumulatively contribute over Rs 600 Billion annually to the national exchequer and employ a large number of skilled and professional staff.
Nearly 200 OICCI members contribute about a third of the country’s total tax collections, invested nearly US$ 3.0 billion last year in new investments and employ about one million people with a significantly larger contribution to the socio economic development of the community.
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FBR asks people to file income tax returns
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday urged people having taxable income to file their income tax returns on or before February 28, 2020.
The FBR said persons having annual income of Rs400,000 must submit their annual tax returns for tax year 2019.
The tax body urged people to file annual income tax returns and play part to broaden tax net and become active taxpayer.
It further said that salaried persons can also file their income tax returns through Tax Asaan application through mobile phones.
Tax payment options have been provided through ATM, internet banking, credit card and direct debit from bank account.
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Exporters doubt refund payment release on FBR collection failure
KARACHI: Exporters expressed concerns that their liquidity may be taken away by the government in shape of sales tax worth billions of rupees as Federal Board of Revenue (FBR) has failed to achieve its revenue collection target.
Mian Anjum Nisar, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the exporters fear that their precious liquidity taken away by the government in shape of sales tax worth billions of rupees which is completely stuck up and refunds may be excessively delayed because the FBR has also failed to achieve its revenue collection target.
FPCCI chief held a comprehensive detailed meeting with the leading export oriented sector at PHMA House, Karachi with Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum and urged the Government to honour its commitment with the export sector.
The President, FPCCI said that the exporters are in real fixed and under stress as Government is not implementing the decision it has taken to support export oriented sector.
The Advisor to Prime Minister on Finance promised that the refunds will not get stuck up whereby he and his team have made a commitment that after passing of budget, his team will hold meetings with exporters and devise an automated system like in Bangladesh or China.
Through the automated system, exporters will get a major amount from bank or the State Bank and would not be dependent on the FBR. Advisor Finance promised that if the new refund system will not work, the govt. will revisit its decision in 3-6 month period. Since more than 8 months have been passed and the FBR FASTER system has failed for speedy refunds, therefore, the Govt. should honour their commitment and restore zero rating – No Payment No Refund Regime for the export sectors.
President FPCCI further told that the Govt. has failed to refund sales tax claims under FASTER System of textile exporters as per commitment, to refund claim amount in 72 hours, contrarily the Govt. has not paid exporters’ claims for the last seven months.
Approx. Rs100 billion of textile exporters liquidity held up under FASTER Refund System in last 8 months and total Rs210 billion are withheld with the government.
Payment timeline for payment of Customs Rebate claims which previously reduced to 7 months has again been prolonged to 13 months.
However, Government also committed that Customs Rebate, DLTL claims will also be paid electronically along with export proceeds.
Reportedly, hundreds of exporters SMEs have stopped their production owing to liquidity problems who have not received their sales tax refund claims for last seven months and due to high rates of utilities shall be compelled for closure if their sales tax refunds are not released on immediate basis and utility tariffs are not rationalized to facilitate them to get new orders and resume production.
The President FPCCI emphasized to implement power tariff of 7.5 cents/kwh including all charges across Pakistan including Karachi and RLNG at 6.5 dollars/MMBTU.
President also mentioned that while notification of said tariffs was issued the time period inadvertently was missing, it should be for three years period as agreed.
He further informed that the OGRA has separated zero rated industry from general industry for Gas Tariff while NEPRA is still not implementing the decisions of separate treatment for zero rated and general industry.
Mian Anjum Nisar President FPCCI said that the tariff for electricity and gas should be fixed on yearly basis for the Export Oriented Sectors and Priority be given only to these sector as the Export Sectors have to make commitments to their buyers for 6 months in advance and frequent increase in the electricity and gas tariffs jeopardizes their entire planning and they suffer huge losses to keep up commitments to their foreign buyers.
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Stock market continues to slide on selling pressure
KARACHI: The stock market witnessed decline of another 520 points on Wednesday owing to selling pressure.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 38,338 points as against 38,858 points showing a decline of 520 points.
Analysts at Arif Habib Limited said that the market observed continuation of downward trend today with index falling by 784 points during the session and closing -520 points.
Similar to previous couple of sessions, foreign selling kept the local investors cautious despite positive news triggers. International crude price traded below US$50/bbl that caused E&P and OMC stocks to slide.
Similarly, Banking sector saw profit booking by concerned investors as foreign selling continued unabated.
Vanaspati segment realized trading volumes of 29.8 million shares, followed by O&GMCs 1(17.4 million) and Cement (16 million).
Among scrips, UNITY led the volumes with 29.8 million shares, followed by HASCOL (10.4 million) and TRG (7.5 million).
Sectors contributing to the performance include Fertilizer (-78 points), Banks (-77 points), Power (-68 points), O&GMCs (-50 points) and Inv Banks (-50 points).
Volumes increased from 124.3 million shares as against 147.8 million shares (+19 percent DoD). Average traded value also increased by 16 percent t reach US$ 45.1 million as against US$ 38.6 million.
Stocks that contributed significantly to the volumes include UNITY, HASCOL, TRG, BOP and MLCF, which formed 40 percent of total volumes.
Stocks that contributed positively include HMB (+9 points), SCBPL (+4 points), MUREB (+3 points), SHFA (+2 points) and SEARL (+2 points).
Stocks that contributed negatively include HUBC (-63 points), ENGRO (-56 points), DAWH (-48 points), UBL (-38 points), and PAKT (-32 points).
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Taxpayers unable to file annual returns as FBR’s website goes offline
KARACHI: Taxpayers are not able to file their annual income tax returns for tax year 2019 as official portal of Federal Board of Revenue (FBR) is remained offline for past several hours on Wednesday.
The taxpayers, who failed to avail past timelines for filing their income tax returns for tax year, were trying to open the FBR’s online e-filing portal since morning but they were unable to access the portal to discharge their liability.
The FBR’s website was remaining offline till 4:50pm. FBR officials said that the website was offline for the past five to six hours.
It is worth mentioning that the last date for filing income tax returns is February 28, 2020.
The actual date for filing income tax for tax year 2019 was September 30, 2019 for salaried, business and Association of Persons (AOPs). For the companies the last date was December 31, 2019. However, the FBR extended the date for all taxpayers up to February 28, 2020.
Sources in the FBR said that the tax machinery was trying to bring the website online as soon as possible. However, they were unable to explain the error.
With the stoppage of the portal all the official work done online was also affected. Sources in local tax offices said that everything related to the portal was not responding.
The sources said that the FBR may not extend the last date for filing income tax returns despite non-operation of the official portal of the FBR.
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Rupee ends unchanged against dollar
KARACHI: The Pak Rupee ended unchanged against dollar on Wednesday amid demand for import and corporate payments.
The rupee ended Rs154.25 to the dollar, same previous day’s closing in interbank foreign exchange market.
Currency dealers said that the market witnessed demands for dollars from importers and corporate buyers. However, inflows of remittances and export payments helped the rupee to end stable.
The exchange rate in open market the rupee value was also remained unchanged. The buying and selling of dollar was recorded at Rs154.10/Rs154.40, same previous day’s closing level, in cash ready market.
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Pakistan Stock Exchange declares 132% surge in net profit for first half
KARACHI: The net profit of Pakistan Stock Exchange (PSX) has surged by 132 percent during six-month period ended December 31, 2019.
The stock exchange announced its half year results for the period ended December 31, 2019 on Wednesday.
The net profit of the market increased to Rs120.5 million during July – December 2019 as compared with Rs51.88 million in the corresponding period of the last year.
It declared basic and diluted earnings per share at Re0.15 for the first half under review as compared with EPS of Re0.06 in the same half of the last year.
Revenue under licensing fee increased to Rs201 million during July – December 2019 as compared with Rs169.87 million in the same period of the last year.
Mark-up/interest income of the market increased to Rs78.66 million as compared with Rs62.82 million in the same period of the last year.
Administrative expenses of the stock market slightly reduced to Rs559.21 million in first half of the current fiscal year as compared with Rs578 million in the corresponding half of the last fiscal year.
The PSX received Rs185.83 million as income from share of profit from associates during six months period ended December 31, 2019.
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OGDCL declares fall in net profit to Rs53.18 billion during six months
KARACHI: The net profit of Oil and Gas Development Company Limited (OGDCL) fell to Rs53.184 billion for the six-month period ended December 31, 2019.
According to financial results for the six-month period ended December 31, 2019 announced on Wednesday, the after tax profit for the same period in last year was Rs56.75 billion.
The company declared earnings per share at Rs12.37 for the period, which was also declined when compared with Rs13.20 EPS declared in the same period of the last year.
The net sales of the company increased to Rs133.44 billion for six months period ended December 31, 2019 as compared with Rs126.89 billion in the same period of the last year.
Operating expenses of the company increased to Rs30.55 billion for the period under review as compared with Rs29.63 billion in the corresponding half of the last year.
The exploration and prospecting expenditure increased to Rs10.42 billion as compared with Rs4.48 billion in the corresponding period of the last year.