Day: January 16, 2021

Committee may recommend reduction in withholding tax provisions

ISLAMABAD: A committee constituted to simplify taxation procedures may recommend a reduction in the number of withholding tax provisions and measures for enhancing the revenue collection.

Sources in the Federal Board of Revenue (FBR) said that a technical committee was constituted on September 17, 2020, for simplification of all taxation procedures.

They said that the committee likely to submit its recommendations during next month for incorporation into the budget.

The committee was assigned to propose measures to reduce the dependence on withholding taxes, minimum tax, advance tax, etc.

According to the terms of reference (TOR), the committee would identify distortion, anomalies, and inequalities in the taxation system which cause difficulties for taxpayers, or discourage investment, industrialization, and documentation, and propose solutions.

Further, the committee is also required to propose measures for simplification of all taxation procedures, in a manner that does not compromise revenue collection and documentation.

The committee is also required to propose measures for improvement in the temporary importation and manufacturing bond schemes in order to enhance their scope and facilitate direct and indirect exporters throughout the value chain.

The committee has been asked to propose remedies for issues relating to adjustment of input tax paid against services subjected to sales tax by the provinces.

Meanwhile, the committee shall also identify issues hindering the smooth processing of refund claims through the FASTER system.

January 16, 2021
Country imports mobile phones worth Rs153.6 billion in first half

ISLAMABAD: The country has imported mobile phones worth Rs153.6 billion during the first half (July – December) 2020/2021 owing to rising demand for digital transactions in the wake of the covid pandemic.

The import of mobile phones increased by 59.44 percent during the first half of the current fiscal year.

The import of mobile phones during the first half of the current fiscal year was Rs153.6 billion as compared with Rs96.33 billion in the corresponding period of the last fiscal year, according to data released by the Pakistan Bureau of Statistics (PBS).

Market sources said that coronavirus pandemic had limited the physical movement, which had given rise to online transactions. Mobile phones have played a major role in promoting the digital economy.

Further, the implementation of laws making it mandatory that only verified mobiles through the Pakistan Telecommunication Authority (PTA) to be activated for local services has also discouraged informal channels for the import of mobile phones.

They said that the depreciation of the Pak Rupee had also an impact on the surge of mobile phone imports.

The import of mobile phones in terms of dollar grew by 52.37 percent to $939 million during the first half of the current fiscal year when compared with $616 million in the same half of the last fiscal year.

January 16, 2021
Weekly Review: market likely to stay positive on earning expectations

Karachi: The stock market likely to remain positive during the next week on the back of healthy earnings expectations, analysts said.

The analysts at Arif Habib Limited said that the market to remain positive on the back of healthy earnings expectations, which will drive the index.

Moreover, the ongoing rollout of vaccines across the globe will most likely keep equity markets buoyant.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2021) compared to the Asia Pac regional average of 17.9x and while offering DY of around 6.2 percent versus 2.5 percent offered by the region.

The market commenced on a positive note briefly on the back of the government and power companies reaching a master agreement, breaching 46,000 level on Monday.

Governor SBP’s statement regarding IMF program revival kept sentiment positive. Furthermore, the announcement of auto sales figures by PAMA (15 percent YoY growth in December 2020) ignited bullish sentiments in the Automobile Assemblers Sector.

Expectations of better corporate results particularly amongst cyclical sectors kept the overall sentiment buoyant.

The KSE-100 Index closed at 45,931 points, gaining 277 points (up 0.61 percent) WoW.

Sector-wise positive contributions came from:

i) Technology & Communication (168 points),

ii) Power Generation & Distribution (66 points),

iii) Engineering (41 points),

iv) Glass & Ceramic (37 points), and

v) Textile Composite (34 points).

Whereas, sectors that contributed negative included:

i) Fertilizer (63 points),

ii) Tobacco (30 points) and

iii) Oil & Gas Exploration Companies (27 points).

Scrip-wise positive contributions were led by i) SYS (89 points), ii) TRG (82 points), iii) INIL (42 points), iv) KAPCO (42 points), and v) GHGL (37 points).

Foreign selling this week clocking-in at USD 2.1 million compared to a net buy of USD 3.4 million last week. Selling was witnessed in Cement (USD 0.9 million) and FMCG (USD 0.8 million).

On the domestic front, major buying was reported by Individuals (USD 24.0 million and Banks / DFIs (USD 1.2 million).

Average volumes arrived at 682 million shares (up by 9 percent WoW). Whereas, average value traded settled at USD 129 million (down by 16 percent WoW).

January 16, 2021