The Sindh Revenue Board (SRB) has announced a 13% sales tax rate on services provided by banking companies within the province. This update, effective from November 1, 2020, clarifies the applicable sales tax on a wide range of banking services.
(more…)Month: November 2020
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Pakistan exports goods worth $7.55 billion in four months
ISLAMABAD: Pakistan has exported goods worth $7.55 billion during the first four months (July – October) 2020/2021 as compared with $7.52 billion in the corresponding period of the last fiscal year, showing nominal increase of 0.33 percent, according to data released by Pakistan Bureau of Statistics (PBS) released on Wednesday.
On the other hand, imports fell by 0.79 percent to $15.13 billion during the first four months of the current fiscal year as compared with $15.25 billion in the corresponding months of the last fiscal year.
The trade deficit also contracted by 1.88 percent to $7.57 billion during the period under review as compared with the trade deficit of $7.72 billion in the same period of the last year.
The exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.
Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.
The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.
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Rate of advance tax on sale, purchase of immovable properties
ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance tax on sale and purchase of immovable properties during tax year 2021 (July 01, 2020 to June 30, 2021).
The FBR issued Income Tax Ordinance, 2001 (Updated up to June 30, 2020) after incorporating amendments introduced through Finance Act, 2020.
The FBR updated the rate of tax to be collected under section 236C of Income Tax Ordinance, 2001. The advance tax rate shall be one percent of the gross amount of the consideration received.
The rate of advance tax shall be two percent on a person for not appearing on Active Taxpayers List (ATL).
Following is the text of Section 236C of the Ordinance:
236C. Advance Tax on sale or transfer of immovable Property.—(1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the seller or transferor advance tax at the rate specified in Division X of Part IV of the First Schedule:
Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.
Provided that this sub-section shall not apply to a seller, being the dependant of a Shaheed belonging to Pakistan Armed Forces or a person who dies while in the service of the Pakistan Armed Forces or the service of Federal or Provincial Government, in respect of first sale of immovable property acquired from or allotted by the Federal Government or Provincial Government or any authority duly certified by the official allotment authority, and the property acquired or allotted is in recognition of or for services rendered by the Shaheed or the person who dies in service.
(2) The Advance tax collected under sub-section (1) shall be adjustable.
Provided that where immovable property referred to in sub-section (1) is acquired and disposed of within the same tax year, the tax collected under this section shall be minimum tax.
(3) Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period exceeding four years.
The FBR also updated rate of advance tax on purchase of immovable properties. The rate of tax to be collected under section 236K shall be one percent of the fair market value.
The advance tax rate shall be two percent on a person for not appearing on Active Taxpayers List (ATL).
The text of Section 236K of Income Tax Ordinance, 2001:
236K. Advance tax on purchase or transfer of immovable property.—(1)Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.
(2) The advance tax collected under sub-section (1) shall be adjustable.
(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:
“Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”
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Import bill falls by over 10 percent in October; export witnesses 2.1 percent growth
ISLAMABAD: The country’s import bill has witnessed decline by 10.3 percent to $4.07 billion in October 2020 as compared with $3.65 billion in the same month of the last year.
Meanwhile, the exports have witnessed an increase of 2.1 percent to $2.06 billion in October 2020 as compared with $2.02 billion in October 2019.
To review the current export trends, a meeting was held on Tuesday, in the Ministry of Commerce, under the Chairmanship of the Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood.
The trade deficit shrank by 22.6 percent in October 2020 to $1.587 billion, showing an improvement of $463 million over October 2019.
The advisor was also briefed that during July-October 2020 the exports decreased only marginally by 0.1 percent. The exports during this period stood at $7.54 billion as compared to $7.547 billion during the same period last year.
He was informed that, during July-October 2020, the balance of trade has witnessed a decline of 4.5 percent to $7.424 billion as compared to $7.776 billion last year.
The Advisor expressed his satisfaction at the export trends and praised Pakistan’s exporters who made it possible for bringing the exports to pre-COVID-19 levels despite uncertainty and contraction in Pakistan’s major markets.
He was also briefed on the major export product trends and was informed that during July-October 2020, the export increases were mostly in the value added sectors.
The increases were witnessed in Home Textiles (10.0 percent), Women’s Garments (20.8 percent), Jerseys & pullovers (35.3 percent), Made-up articles of textile (10.4 percent), Stockings & socks (19.2 percent), Cement (10.8 percent), Pharmaceutical products (26.8 percent), Tarpaulins (66.8 percent), and Made-up clothing accessories (245.2 percent) as compared to the same period last year.
He was informed that, as compared to the same period last year, the export decreases during July-October 2020 were seen in mostly the non-value added sectors such as Cotton Fabric (-8.0 percent), Cotton yarn (-40.1 percent), Worn clothing (-63.6 percent), Raw Leather (-38.4 percent), Crude Petroleum (-53.7 percent), and Cotton (-95.7 percent). The Advisor was also briefed on the geographical spread and growth of exports.
He was informed that, as compared to the same period last year, Pakistan’s top five growing markets during July-October 2020 are Indonesia (39.3 percent), Qatar (34.5 percent), Denmark (24.9 percent), S. Korea (22.5 percent) and Afghanistan (15.6 percent).
The Advisor expressed his hope that Pakistan economy will continue on its upward recovery trend and he directed that the officials of Ministry continue to proactively facilitate exporters and businessmen.
He further directed that no efforts should be spared to counter the effect of the second wave of COVID-19 in Pakistan’s major markets.
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SRB issues sales tax rate on telecom services
KARACHI: Sindh Revenue Board (SRB) on Tuesday updated working tariff up to November 01, 2020 for levy of sales tax on telecommunication services.
The sales tax on services are exempt on telecommunication services involving charges payable on the international leased lines or bandwidth services used by the software exporting firms registered with the Pakistan Software Export Board.
Following is the table for the application of sales tax on telecommunication services along with tariff headings:
9812.1000 Telephone services 19.5% 9812.1100 Fixed line voice telephone service 19.5% 9812.1200 Wireless telephone 19.5% 9812.1210 Cellular telephone 19.5% 9812.1220 Wireless Local Loop telephone 19.5% 9812.1300 Video telephone 19.5% 9812.1400 Payphone cards 19.5% 9812.1500 Prepaid calling cards 19.5% 9812.1600 Voice mail service 19.5% 9812.1700 Messaging service 19.5% 9812.1710 Short Message service (SMS) 19.5% 9812.1720 Multimedia message service (MMS) 19.5% 9812.1910 Shifting of telephone connection 19.5% 9812.1920 Installation of telephone 19.5% 9812.1930 Provision of telephone extension 19.5% 9812.1940 Changing of telephone connection 19.5% 9812.1950 Conversion of NWD connection to non NWD or vice versa 19.5% 9812.1960 Cost of telephone set 19.5% 9812.1970 Restoration of telephone connection 19.5% 9812.1990 Others 19.5% 9812.2000 Bandwidth services 19.5% 9812.2100 Copper line based 19.5% 9812.2200 Fibre-optic based 19.5% 9812.2300 Co-axial cable based 19.5% 9812.2400 Microwave based 19.5% 9812.2500 Satellite based 19.5% 9812.2900 Others 19.5% 9812.3000 Telegraph 19.5% 9812.4000 Telex 19.5% 9812.5000 Telefax 19.5% 9812.5010 Store and forward fax services 19.5% 9812.5090 Others 19.5% 9812.6000 Internet services 19.5% 9812.6100 Internet services including email services 19.5% 9812.6110 Dial-up internet services 19.5% 9812.6120 Broadband services for DSL connection 19.5% 9812.6121 Copper line based 19.5% 9812.6122 Fibre-optic based 19.5% 9812.6123 Co-axial cable based 19.5% 9812.6124 Wireless based 19.5% 9812.6125 Satellite based 19.5% 9812.6129 Others 19.5% 9812.6130 Internet/email/Data/SMS/MMS services on WLL networks 19.5% 9812.6140 Internet/email/Data/SMS/MMS services on cellular mobile networks 19.5% 9812.6190 Others 19.5% 9812.6200 Data Communication Network services (DCNS) 19.5% 9812.6210 Copper Line based 19.5% 9812.6220 Co-axial cable based 19.5% 9812.6230 Fibre-optic based 19.5% 9812.6240 Wireless/Radio based 19.5% 9812.6250 Satellite based 19.5% 9812.6290 Others 19.5% 9812.6300 Value added data services 19.5% 9812.6310 Virtual private Network services (VPN) 19.5% 9812.6320 Digital Signature service 19.5% 9812.6390 Others 19.5% 1[9812.7000 Other specified telecommunication services 19.5% 9812.7100 Audio Text Services 19.5% 9812.7200 Teletext services 19.5% 9812.7300 Trunk radio services 19.5% 9812.7400 Paging services including voice paging services and radio paging services 19.5% 9812.7900 Others 19.5% 9812.8000 Tracking and alarm service 19.5% 9812.8100 Vehicle tracking and other tracking services 19.5% 9812.8200 Burglar and security alarm services 19.5% 9812.8900 Others 19.5% 9812.9000 Telecommunication services not elsewhere specified] 19.5% -
FPCCI welcomes electricity tariff reduction
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has welcomed the decision of Prime Minister Imran Khan to provide relief industries by reducing electricity tariff.
Mian Anjum Nisar, President FPCCI, at a press conference on Tuesday lauded the bold initiative to reduce electricity tariffs for SMEs and Industries.
He said for a long, FPCCI was striving for a balanced electricity tariff for industries to compete with the regional trade.
The struggle is now fulfilled and the government realized the issue. “The reduced electricity cost will also positively impact the local markets and will create a tendency to overcome inflation and lead to the spur of economic growth,” he added.
Mian Anjum Nisar President FPCCI on behalf of the business, trade, and industries extend heartily congratulation for such a business friendly decision for the industry.
Prime Minister Imran Khan during a post-cabinet meeting media briefing announced reduced energy costs for industrial sector. The prime minister said that from November 1, the additional electricity used by SMEs up to June 30, 2021, will be sold at 50 percent lower the cost.
The prime minister also said that even the large industries, will pay reduced electricity costs at all times, without any concept of off-peak hours. The prime minister admitted that the industry was severely impacted during the lockdown period and it was now essential that industrial sector should be supported to perform well.
Mian Anjum Nisar also addressed the business, trade, and industry sectors to avail full benefits of this facility and play their part to increase production and volume of export.
Present Government has already decreased the policy interest rates and established a network of economic zones as Karachi Export Processing Zone, Risalpur Export Processing Zone, Sialkot Export Processing Zone, Gujranwala Export Processing Zone, Khairpur Special Economic Zone, Rashakai Economic Zone, Gadoon Economic Zone, Hathar Economic Zone, Quaid e Azam Business Park. And special economic zones SEZ National Science & Technology Park, Islamabad, JW-SEZ China-Pakistan SEZ Raiwind in Punjab, and Dhabeji SEZ in Sindh.
This is the high time to put all energy and efforts into the enhancement of the socio-economic development of the country. Electricity relief packages will ultimately provide support in decreasing expenses and industries will be able to compete with their regional contemporaries.
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Electricity tariff reduced up to 50pc on additional usage to promote industries
ISLAMABAD: The government on Tuesday announced up to 50 percent reduction in electricity tariff on additional usage to promote industries in the country.
Prime Minister Imran Khan announced a relief package for industrial sector with 50 percent reduction in rate of commercial electricity on additional usage by Small and Medium Enterprises.
The announcement was made after the federal cabinet gave approval to the package.
The Prime Minister said for next three years, all industries on additional usage of electricity would be provided 25 percent relief considering their previous bills.
He also announced an end to peak-hour system for commercial electricity users, with provision of uniform electricity rates round the clock.
Imran Khan said a strong infrastructure of energy was vital to help industries grow and compete with international market.
He pointed that with 25 percent expensive electricity rates, Pakistan lagged behind India and Bangladesh in terms of exports.
“It is extremely important for Pakistan to strengthen industrialization, which will lead to wealth creation and thus help pay off the debt,” he said.
Imran Khan regretted that the contracts signed with power generation companies during previous tenures resulted in production of high-cost electricity, which remained unaffordable for industrial sector.
During 2013-18, he mentioned that the country’s exports dipped from Rs 25 billion to Rs 20 billion as many industries were shut down due to high cost of electricity.
The Prime Minister said soon after assuming the government, his team focused on increasing exports as “higher the exports, stronger the economy”.
He expressed satisfaction that Pakistan ranked high among the countries of sub-continent in growth of exports during the pandemic of COVID-19.
In view of the second wave of coronavirus, the Prime Minister appealed to the nation to continue wearing face masks to avert the risks and dangers of the disease.
Minister for Industries and Production Hammad Azhar on the occasion said under the package, which was prepared on the special instructions of Prime Minister Imran Khan and approved by the cabinet today, the industries would be provided electricity at off-peak hours’ rate for 24 hours for next three years.
The Small and Medium Enterprises (SMEs), he said, would be getting 50 percent tariff relief on the use of additional electricity, considering their bills of November 2019, during next six months, while all the industries would be provided with additional electricity on 25 percent reduced rates for next three years.
Hammar Azhar said the decision would help boost economic growth, strengthen industry, increase exports, and create employment opportunities.
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Stock market gains 1,369 points as international oil price increases
KARACHI: The stock market made a massive recovery of 1,369 points on Tuesday owing to increase in international oil prices and positive trend in global stocks.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,480 points as against 39,112 points showing an increase of 1,369 points.
Analysts at Arif Habib Limited said that the market rebounded today by adding a resounding +1400 points during the session and closing near day’s high at +1369 points.
Increase in international crude oil prices overnight as well as positive trend in global stock markets (following the Election day rally) helped the local bourse stage a comeback.
Besides, PM’s announcement with regards lowering the cost of electricity for Industrial consumers, which came by the end of session, also helped strengthen the Index.
Banking sector, which was under significant selling pressure during the past few sessions saw buyers taking charge over the sellers, giving way for the stock prices to trade near upper circuits.
Among scrips, UNITY led the table with 42.8 million shares, followed by POWER (35.6 million) and HASCOL (29.4 million).
Sectors contributing to the performance include Banks (+356 points), E&P (+170 points), Cement (+157 points), O&GMCs (+95 points) and Fertilizer (+91 points).
Volumes increased from 322.2 million shares to 383.9 million shares (+19 percent DoD). Average traded value also increased by 15 percent to reach US$ 86.2 million as against US$ 74.8 million.
Stocks that contributed significantly to the volumes include UNITY, POWER, HASCOL, AGHA and PIBTL, which formed 38 percent of total volumes.
Stocks that contributed positively to the index include HBL (+83 points), UBL (+79 points), POL (+70 points), LUCK (+64 points) and ENGRO (+61 points). Stocks that contributed negatively include COLG (-6 points), HGFA (-1 points) and EFUG (-0 points).
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Dollar eases to Rs159.97
KARACHI: The Pak Rupee gained 14 paisas against dollar on Tuesday amid inflows of workers’ remittances and export receipts, dealers said.
The rupee ended at Rs159.97 to the dollar from last day’s closing of Rs160.11 in interbank foreign exchange market.
Currency experts said that improved receipts of exports and workers’ remittances helped the rupee to make gain.
They said that the second wave of coronavirus also reduced dollar demand for import payments.
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Headline inflation contracts at 8.9 percent in October
ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has contracted by 8.9 percent on year-on-year basis in October 2020 as compared to an increase of 9.0 percent in the previous month and 11.0 percent in October 2019.
On month-on-month basis, it increased by 1.7 percent in October 2020 as compared to an increase of 1.5 percent in the previous month and an increase of 1.8 percent in October 2019, Pakistan Bureau of Statistics (PBS) said on Monday.
CPI inflation Urban, increased by 7.3 percent on year-on-year basis in October 2020 as compared to an increase of 7.7 percent in the previous month and 10.9 percent in October 2019. On month-on-month basis, it increased by 1.3 percent in October 2020 as compared to an increase of 1.3 percent in the previous month and an increase of 1.6 percent in October 2019.
CPI inflation Rural, increased by 11.3 percent on year-on-year basis in October 2020 as compared to an increase of 11.1 percent in the previous month and 11.3 percent in October 2019. On month-on-month basis, it increased by 2.4 percent in October 2020 as compared to an increase of 2.0 percent in the previous month and an increase of 2.2 percent in October 2019.
Sensitive Price Indicator (SPI) inflation on YoY increased by 12.3 percent in October 2020 as compared to an increase of 12.0 percent a month earlier and an increase of 15.1 percent in October 2019. On MoM basis, it increased by 3.0 percent in October 2020 as compared to an increase of 2.1 percent a month earlier and an increase of 2.7 percent in October 2019.
Wholesale Price Index (WPI) inflation on YoY basis increased by 5.1 percent in October 2020 as compared to an increase of 4.3 percent a month earlier and an increase of 13.3 percent in October 2019. WPI inflation on MoM basis increased by 2.9 percent in October 2020 as compared to a decrease of 1.0 percent a month earlier and an increase of 2.0 percent in corresponding month (October 2019) of last year.