KARACHI: The State Bank of Pakistan (SBP) on Friday introduced a soft loan scheme at four percent for persons appeared on Active Taxpayers List (ATL) for payment of salaries and wages to their employees during financial challenges of lockdown to contain coronavirus spread.
(more…)Month: April 2020
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Share market gains 196 points amid selling pressure
KARACHI: The share market gained 196 points on Friday despite selling pressure in major scrips.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,033 points as against 31.837 points showing an increase of 196 points.
Analysts at Arif Habib Limited said that the market saw a drop of 460 points early in the session, which was largely a factor of the crash in oil prices overnight (WTI closing 7.5 percent down from its opening the other day).
Resultantly, oil & gas chain saw selling pressure / profit booking but close of session saw pertinent scrip prices inching up, though still closed red.
Cement sector continued displaying strength on Relief construction package, on the back of which, DGKC and LUCK remained prominent, although by end of session, MLCF also saw buying activity.
Among banking sector stocks, HBL maintained its levels for the past couple of sessions, whereas UBL showed price gains.
Prospects of opening the lockdown by the Provincial governments has so far played in the interest of Cement sector largely.
Cement sector maintained the leadership in trading volumes with 33.3 million shares, followed by O&GMCs (17.1 million) and Power (12.4 million). Among scrips, UNITY topped the chart with 28.7 million shares, followed by HASCOL (25.8 million) and PAEL (14.1 million).
Sectors contributing to the performance include E&P (-103 points), Banks (+105 points), Fertilizer (+51 points), Technology (+24 points), Cement (+22 points) and Pharma (+20 points).
Volumes declined from 216.5 million shares to 127.1 million shares (41 percent DoD). Average traded value also declined by 41 percent to reach US$ 30 million as against US$ 51 million.
Stocks that contributed significantly to the volumes include HASCOL, KEL, MLCF, DGKC and PAEL, which formed 36 percent of total volumes.
Stocks that contributed positively to the index include BAFL (+34 points), ENGRO (33 points), MCB (+19 points), SNGP (+19 points) and FFC (+18 points). Stocks that contributed negatively include OGDC (-37 points), PPL (-34 points), MARI (-17 points), POL (-15 points), and PAKT (-12 points).
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Rupee gains 40 paisas on funds inflow expectations
KARACHI: The Pak Rupee gained 40 paisas against dollar on Friday as expectation of improved foreign exchange reserves following disbursement of payment by the IMF.
The rupee ended at Rs166.79 to the dollar from previous day’s close of Rs167.19 in interbank foreign exchange market.
The rupee made gain for the third consecutive days owing to reports that the IMF board meeting scheduled for next week may approve $1.4 billion for Pakistan.
Currency experts said that the IMF disbursement would help the country to improve foreign exchange reserves.
The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.
The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.
The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.
Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.
The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.
However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.
The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.
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FBR asks exporters to provide IBAN for duty drawback transfer
ISLAMABAD: Federal Board of Revenue (FBR) has asked exporters to provide their IBAN of their bank account numbers for direct transfer of customs duty drawback.
The FBR said that it has devised a centralized system of online payment of customs duty drawback directly in the bank account of the exporters.
For this purpose, FBR has required from the exporters to update their WEBOC profile and provide IBAN of the same bank account whose details are already available in WEBOC profile of the exporters to receive Custom Duty Drawback.
FBR has required the information to be provided as soon as possible to avail electronic transfer facility for Customs Duty Drawback payments.
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Pakistan bans export of anti-malarial drugs
Pakistan on Thursday banned the export of anti-malarial drugs with immediate effect till further orders.
The ministry of commerce issued SRO 297(I)/2020 to amend Export Policy Order, 2016 to impose the ban. The ban has been imposed due to high demand of the drugs in the wake of coronavirus spread.
The ministry amended the export policy order and brought the drug in First Schedule, which prohibits exports of the goods falling in this schedule.
The ministry said that the ban would be remained applicable till further orders or decision of the National Coordination Committee (NCC) on COVID-19.
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FBR drafts rules for online income monitoring of services sector
ISLAMABAD: Federal Board of Revenue (FBR) will make it mandatory for providers of services to install electronic fiscal device (EFD) for real-time monitoring and collection of income tax.
The FBR issued SRO 296(I)/2020 on Thursday to unveil draft rules for various services sectors to share online data of transactions in order to determine their income and subsequent contribution of income tax.
Through the SRO the FBR proposed amendment to Income Tax Rules, 2002 and invited comments from stakeholders within seven days before making the rules part of the statute.
The FBR proposed a new Chapter VIIA to the Income Tax Rules, 2002 namely ‘Online Integration of Businesses.’ All the companies operating in the country shall require installing EFD. In case other than company the taxpayers shall require to install the device operating in eight major cities, which included: Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Multan, Peshawar, and Gujranwala.
Through the proposed amendment, the FBR is intending to make it mandatory the installation of EFD for services, included:
01. Restaurants;
02. Hotels, motels, guest houses, marriage halls, marquees, clubs, including race clubs.
03. Inter-city travel by road.
04. Courier Services and cargo services.
05. Services provided for personal care by beauty parlors, clinics and slimming clinics, body massage centers, pedicure centers, including cosmetic and plastic surgery by such parlors/clinics.
06. Medical practitioners and consultants.
07. Pathological laboratories, medical diagnostic laboratories including X-Ray, CT Scan, M.R. Imaging etc.
08. Hospitals or medical care centers providing medical consultation, hospitalization or other ancillary services.
09. Health clubs, gyms, physical fitness centers, and body or sauna massage centers.
10. Photographers.
11. Accountants.
12. Pharmacies.
According to the rules, the services provider has been defined as integrated enterprise. Such kind of service provider is required to install such fiscal electronic device and software.
Through the device, following tasks will be performed:
Receive, record, analyze and store fiscal data;
Format fiscal data into fiscal invoices or bills;
Transmit the fiscal data to the board’s computerized system through secure means; and
Print invoice or bills.
The FBR said that every transactions made through EFD shall be recorded by a CCTV camera and the recording shall be retained for a period of at least three months.
In case ancillary services or sale of goods are made from notified establishment, the transactions shall also be recorded and the invoice or bill issued in the same manner. Such data shall also be communicated to the board’s computerized system in the same manner.
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Bank deposits hit record high at Rs15.13 trillion
KARACHI: Bank deposits hit record high at Rs15.13 trillion by end of March 2020, according to data released by State Bank of Pakistan (SBP).
The deposits of the banking sector grew by 12.4 percent YoY and 2.1 percent MoM in March 2020 to Rs15.13 trillion. The deposits are also up 3.4 percent in YTD 2020.
Analysts at Topline Securities said that banks’ focus for deposit mobilization remained more towards Investments compared to Advances during the period given the high yields on govt. papers.
As a result, Investments grew by 61.7 percent YoY and 6.6 percent MoM to Rs9.30 trillion in March 2020, with Investment to Deposit Ratio (IDR) increasing to 61.5 percent in March 2020 from 42.7 percent in March 2019 and 58.9 percent in Feb-2019. The Investments are also up 5.6 percent in YTD 2020.
On the other hand, Advances grew by just 4.7 percent YoY and 0.6 percent MoM in March 2020 hindered by high interest rates and slowdown in overall economic activity.
The Advances are up only 1.2 percent during YTD 2020. As a result, ADR dropped to 54.6 percent in March 2020 from 58.6 percent in March 2019 and 55.4 percent in Feb-2020.
As per the available 2M2020 numbers, Advances to the textile and consumer sectors increased by 9 percent YoY each.
The Currency in Circulation (CIC) in YTD 2020 has registered an increase of 6.5 percent to Rs5.6 trillion. Additionally, CIC as a percentage of M2 clocked in at 29 percent above the historic 5-year average of 27 percent.
Going forward, we see limited Deposit growth in the range of 6-7 percent during 2020 (vs. historical average 3-year growth of 11 percent), in line with the nominal GDP growth amidst slowdown in economic activity because of the outbreak of Covid-19. We expect Advances to grow by around 5 percent during the year (vs. historical average 3-year growth of 14 percent).
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PTA allows free SMS for Ehsas Program
ISLAMABAD: Pakistan Telecommunication Authority (PTA) on Thursday announced to make charge-free the SMS sent to Ehasas Program.
A statement issued by PTA said that to facilitate people sending SMS to BISP code 8171 for Ehsas Program registration, all SMSs will be free with no charging from April 10, 2020.
This decision to make SMS service free of charge has been taken in view of problems faced by some mobile subscribers with no balance, who now will be able to send SMS on 8171 with zero balance.
It may be mentioned that PTA is extending full support to BISP, without any financial benefit, in its efforts to reach out people wanting for help through mobile technology.
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Sales tax on services exempted on construction services
LAHORE: Punjab Revenue Authority (PRA) has exempted the sales tax on services rendered by construction industry till June 30, 2020.
The provincial authority issued a notification dated April 02, 2020 and allowed zero percent sales tax on services provided by construction sector for next three months.
However, this exemption from tax is available with condition that no input tax adjustment will be granted.
Previously, the industry was allowed reduced rate of five percent and one percent without input tax credit/adjustment in respect of government civil works and sixteen percent with input tax credit/adjustment for others.
The tax is payable within the provincial jurisdiction by construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works but, excluding:
(i) where the tax is otherwise paid by registered persons as property developers, builders or promoters for building construction; or
(ii) where the construction work is funded under an agreement of foreign grant-in-aid or involves construction of consular buildings; or
(iii) residential construction projects where the covered area does not exceed 10,000 square feet for a house and 20,000 square feet for an apartment except where construction services are provided to construct more than one house or more than one apartment building.
Explanation- Notwithstanding the rate of five percent fixed in column 4, the following further reduced rates shall be applicable:
(a) one per cent for all services specified at S.No.14 without input tax credit or adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched during Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized after 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by the Cantonment Boards; and
(b) zero per cent for all services specified at S.No.14 without input tax credit/adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched prior to Financial Year 2016-2017 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by Cantonment Boards.
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SBP forex reserves fall by $463 million on debt repayment
KARACHI: The State Bank of Pakistan (SBP) reported a significant drop in the official foreign exchange reserves by $399 million for the week ending April 3, 2020.
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