Author: Mrs. Anjum Shahnawaz

Investigation into high car prices in Pakistan ordered

ISLAMABAD: A monitoring committee for automobile industry has directed investigation into massive increase in prices of motor cars in Pakistan during past few months.

The meeting of monitoring committee for automobile industry met under the chairmanship of Federal Secretary for Industries and Production, Jawad Malik this afternoon.

READ MORE: Pak Suzuki Motor declares Rs2.68 billion annual profit

Meeting was attended by representatives from automakers, Pakistan association of automotive parts and accessories manufacturer (PAAPAM), Engineering Development Board(EDB), Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Competition Commission of Pakistan (CCP) and Ministry of Science & Technology.

The forum sought factors and justification for recent price hike in different models of cars across the board.

READ MORE: Rupee continues falling spree; dollar at Rs183.48

The meeting was told that recent price hike is due to Dollar Rate (USD to PKR), increase in freight charges and raw materials including operational cost.

The industry also provided details on causes of late delivery, CDK imports and production capacity.

The monitoring committee expressed concerns over massive price hike in past 5-6 months and safety features in automobiles.

READ MORE: Indus Motors estimates 15% sales dip on PKR fall

After due deliberations, the Chair directed to carry out forensic analysis of car prices in comparison with factors indicated by the industry as a reason for price change through independent professional expertise.

The secretary instructed to complete the forensic analysis within two weeks.

The chair also asked the automotive industry to provide localisation plan with time frame as well as safety features compliance report to the ministry.

READ MORE: Pakistan’s car sales surge 56% in eight months of FY22

March 31, 2022

Foreign currency rates in Pak Rupee – March 31, 2022

KARACHI: Following are the open market exchange rates of foreign currencies in Pak Rupee (PKR) in Pakistan on March 31, 2022 (The rates are updated at 11:12 AM (Pakistan Standard Time):

Currency	Buying	Selling
Australian Dollar (AUD)	134.50	136.50
Bahrain Dinar (BHD)	386.50	388.50
Canadian Dollar (CAD)	143.00	145.00
China Yuan (CNY)	23.55	23.95
Danish Krone (DNK)	23.65	23.95
Euro (EUR)	200.00	202.00
Hong Kong Dollar (HKD)	16.60	16.85
Indian Rupee (INR)	2.03	2.10
Japanese Yen (JPY)	1.41	1.44
Kuwaiti Dinar (KWD)	481.85	484.35
Malaysian Ringgit (MYR)	36.75	37.10
NewZealand $ (NZD)	96.85	97.55
Norwegians Krone (NOK)	17.50	17.75
Omani Riyal (OMR)	392.85	394.88
Qatari Riyal (QAR)	39.95	40.55
Saudi Riyal (SAR)	48.05	48.80
Singapore Dollar (SGD)	131.00	132.50
Swedish Korona (SEK)	18.75	19.00
Swiss Franc (CHF)	160.35	161.25
Thai Bhat (THB)	4.80	4.90
U.A.E Dirham (AED)	49.40	50.30
UK Pound Sterling (GBP)	237.00	239.50
US Dollar (USD)	182.50	183.70

Disclaimer: Team PKRevenue.com provides the available rates of the open market, which are subject to change every hour. Team PKRevenue.com provides the available exchange rates at the time of posting the story. So the team is not responsible for any inaccuracy of the data.

Foreign currency rates in Pak Rupee – March 30, 2022

March 31, 2022

Pakistani Rupee to Saudi Riyal on March 31, 2022

KARACHI: Following are the rates of buying and selling of one Saudi Riyal (SAR) in Pakistani Rupee (PKR) in the open market on March 31, 2022:

Buying: Rs 48.05 to the Saudi Riyal

Selling: Rs 48.80 to the Saudi Riyal

The buying rate means an exchange company or a bank buys foreign currency from a customer.

The selling rate means an exchange company or a bank sells for foreign currency from a customer.

The rate has been updated at 10:55 AM Pakistan Standard Time (PST).

The Saudi Riyal /PKR parity depends on open market rates, they are set by the market forces based on foreign currency demand.

Disclaimer: Team PKRevenue.com provides the available rates of the open market, which are subject to change every hour. Team PKRevenue.com provides the available exchange rates at the time of posting the story. So the team is not responsible for any inaccuracy of the data.

Pakistani Rupee to Saudi Riyal on March 30, 2022

March 31, 2022
Ukraine crisis, political unrest major threats to economy

ISLAMABAD: The ministry of finance on Tuesday warned aggravating Pakistan’s macroeconomic imbalances due to political unrest in the country and geopolitical uncertainty on Ukraine crisis.

The finance ministry in monthly report stated Pakistan’s economic performance continues to be strong and is still on a trajectory compatible with an economic growth target of around 5 percent in the current fiscal year. “Its cyclical position has returned to a more neutral stance. If this trend continues in the next months, economic growth will be driven primarily by the expansion of manufacturing capacity. However, the intensity of internal and external risks has still not been exactly realized which may adversely affect domestic economic activities.”

READ MORE: Pakistan’s foreign exchange reserves fall to $21.44 billion

The finance ministry said that inflation and the current account deficit are still under pressure. The government is taking measures to limit as much as possible further increases in the cost of living in the coming months. Moreover, the government measures designed to stimulate exports and discourage unnecessary imports are expected to contribute to constrain current account deficit.

“The recent geopolitical tensions, in particular the Ukraine crisis, is the most important external risk factor. Likewise, domestic political conditions are building domestic risks,” it said.

“A further escalation of these risks could hamper the positive outlook for Pakistan’s economy and may also aggravate the macroeconomic imbalances,” it added.

READ MORE: IMF to agree on Pakistan’s industrial promotion package

The report said that the first seven months of the current fiscal year have witnessed significant pressure on fiscal accounts due to rising expenditures under grants and subsidies. In addition, the PSDP spending has also witnessed a significant rise of 37 per cent.

On the revenue side, FBR tax collection has been able to achieve more than 65.2 per cent of its annual target during the first eight months of the ongoing fiscal year.

However, the government has announced a relief package for the masses to offset the impact of increasing oil prices. “These are collectively adding risks to the fiscal sector.”

READ MORE: Pakistan signs deal to explore largest gold reserves

Notwithstanding measures to improve tax collection and expenditure management will help in containing the fiscal deficit at a manageable level and keeping the primary balance at a sustainable level.

According to Balance of Payment (BOP) data, the trade deficit in goods and services declined considerably; from $ 4.3 billion in Jan 2022 to $ 2.6 billion in February 2022. Exports of goods and services that unexpectedly declined in January have resumed their upward trend in February.

Imports of goods and services were at all-time highs in December and January, but declined substantially in February, helped by negative seasonal effects.

In March 2022, exports are expected to continue their upward trend, backed by the export-oriented policies that have been implemented in the recent past.

READ MORE: Pakistan’s CAD mounts to $12 billion in eight months

The stabilizing of the Real Effective Exchange will also help exports in keeping the rising trend. Imports will probably return to a level that is more in line with domestic economic activity and the levels of international commodity prices. As a result, the trade balance may less deteriorate in March 2022 as well. However, geopolitical risks still persist.

In January and February, remittance inflows declined to lower levels mainly due to negative seasonality. In March they are expected to revert to normal levels. Taking these factors into account, as well as its other components, the current account deficit is expected to stay well below the unsustainable levels observed during the period from August 2021 up to January 2022.

March 29, 2022
IR offices to work till midnight on March 31

ISLAMABAD: The offices of Inland Revenue (IR) will observe extended working hours on last two days of the current month and facilitate tax payment till midnight on March 31, 2022.

According to a notification issued by the Federal Board of Revenue (FBR) on Monday, the offices of Inland Revenue including Large Tax Offices (LTOs), Medium Tax Offices (MTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) will remain open and observe extended working hours till 8:00 PM on Wednesday March 30, 2022 and till 12:00 midnight on Thursday March 31, 2022 to facilitate the taxpayers in payment of duty and taxes.

READ MORE: Banks to observe extended hours for tax collection

The FBR directed Chief Commissioners Inland Revenue to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (SBP) to ensure transfer of tax collection by these branches to the respective branches of SBP on the same date to account for the same towards the collection for the month of March 2022.

READ MORE: Tax collection from property purchase climbs up 24%

Earlier on March 24, 2022 the SBP issued instructions in this regard.

The SBP in a statement said that in order to facilitate the collection of government receipts/duties / taxes, it has been decided that the field offices of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 8:00 P.M. and 10:00 P.M. on 30th and 31 March, 2022, respectively.

READ MORE: FBR registration made mandatory for housing projects

Accordingly, NIFT has been advised to arrange a special clearing at 8:00 P.M. on 31st March, 2022 (Thursday) for same day clearing of payment instruments.

All banks are advised to keep their concerned branches open on 31″ March, 2022 (Thursday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.

READ MORE: Advance tax on purchase of immovable property

March 28, 2022
Reintroduction of tax credit on registered sales proposed

KARACHI: Karachi Tax Bar Association (KTBA) has suggested the tax authorities to reintroduce tax credit on registered sales in order to broaden the tax base.

The KTBA in its proposals for budget 2023/2023 urged the Federal Board of Revenue (FBR) to reintroduce the tax credit on registered sales by making amendment in Section 65A of the Income Tax Ordinance, 2001.

READ MORE: Amendment sought in incentive to Greenfield industry

The tax bar said to provide incentive for documentation of economy and increase of the tax base a tax credit of 2.5 per cent of tax liability was offered to manufacturers for Tax year 2009 who were making 90 per cent of their sales to persons registered under the Sales Tax Law. The tax credit was increased to 3 per cent by Finance Act, 2016. However, this Tax credit was deleted by Finance Act, 2017.

READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

Due to deletion from the tax law, years of efforts to document the economy has been pushed backwards and that too without any warning and rationale.

Therefore, it is proposed the tax credit on 90 per cent sales should be also extended to persons making 90 per cent of purchases from persons registered under the Sales Tax Act, 1990 as well.

READ MORE: FBR invites income tax proposals for budget 2022/2023

The tax credit should also cover entities providing services and duly registered with the provincial sales tax authorities.

It will provide the much-desired stimulus to the documentation of the economy, the KTBA added.

READ MORE: Budget 2022/2023 to be presented in first week of June

March 24, 2022
IMF to agree on Pakistan’s industrial promotion package

ISLAMABAD: Pakistan and International Monetary Fund (IMF) likely to reach an understanding on the industry promotion package i.e. amnesty scheme in the ongoing 7th review, an official statement said on Thursday.
(more…)

March 24, 2022
Court hearing on Riba-free banking in Pakistan

ISLAMABAD: The Federal Shariat Court on Monday continued hearing on the case of Riba in the country.

The full bench of the court comprising of Justice Muhammad Noor Meskanzai Chief Justice, Justice Dr. Syed Muhammad Anwar and Justice Khadim Hussain M. Shaikh, in exercise of power under Article 203-D of the Constitution of Islamic Republic of Pakistan continued hearing of the Riba case.

Dr. Waqar Masud Ex. Secretary Finance Government of Pakistan, after detail arguments, suggested two years for conversion of the existing banking system into Riba free Islamic Banking system.

Dr. Ijaz Ahmad Samadani, Chairman Shariah Board Maldives Islamic Bank, appeared before the Court and argued that gradual conversion of the existing system into Islamic one is possible.

Dr Atiqul Zafar jurisconsult on the previous date of hearing had suggested that five years is sufficient for conversion of the existing system.

Shahzad Shaukat, a chartered accountant continued his arguments on the Islamic Economic System. The next hearing will be at Karachi Bench Registry in Sindh High Court Building Karachi on March 25, 2022.

The State Bank of Pakistan (SBP) defines Riba as:

The word “Riba” means excess, increase or addition, which correctly interpreted according to Shariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). This definition of Riba is derived from the Quran and is unanimously accepted by all Islamic scholars.

The meaning of Riba has been clarified in the following verses of Quran (Surah Al Baqarah 2:278-9)

“O those who believe; fear Allah and give up what still remains of the Riba if you are believers. But if you do not do so, then be warned of war from Allah and His Messenger. If you repent even now, you have the right of the return of your principal; neither will you do wrong nor will you be wronged.”

The origination of term interest dates back to 17th century with the emergence of banking system at global level. Interest means giving and/or taking of any excess amount in exchange of a loan or on debt. Hence, it carries the same meaning/value as that of Riba as defined in the previous question. Further, it is narrated that “the loan that draws interest is Riba”.

There is consensus among the Muslim scholars of all the fiqhs that interest is Riba in all its forms and manifestations.

March 21, 2022
Pakistan signs deal to explore largest gold reserves

ISLAMABAD: Pakistan on Sunday signed a new agreement on a framework to reconstitute the Reko Diq project and a pathway for Antofagasta to exit the project.

Finance Minister Shaukat Tarin said at a press conference. He said Governments of Pakistan and Balochistan, Antofagasta plc, and Barrick Gold Corporation have reached agreement in principle on a framework to reconstitute the Reko Diq project, and a pathway for Antofagasta to exit the project.

Addressing a hurriedly called press conference along with the Energy Minister Hammad Azhar and Chief Minister Balochistan Mir Abdul Quddus Bizenjo here, the minister said after the new development, Pakistan would not only avoid the $11 billion penalty but also get an opportunity of exploring the world’s largest gold and copper reserve.

READ MORE: Pakistan’s CAD mounts to $12 billion in eight months

He said some $10 billion would be invested under this project which would create 8000 new jobs for locals.

The minister said as per the new agreement, Barric Gold would retain 50 per cent share, while government of Balochistan would get 25 per cent share, and the rest 25 per cent share would be attributed to the State Owned Enterprises Oil and Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan (GHPL).

Tarin said an agreement was signed in 2006 among a Canadian Company Barrick Gold, a Chilean company Antofagasta plc, and governments of Pakistan and Balochistan to extract gold and copper from the Reko Diq minses reserve.

READ MORE: Foreign investment into Pakistan surges by 131%

As per the old agreement, 37.5 percent share each was given to the two foreign companies and 25 percent share was to given to Goverment of Blochistan.

The agreement was suspended in 2011 due to a dispute over the legality of its licensing process. As a result the International Court of Arbitration leveled $6.4 billion award on government of Pakistan while on the same time the London Court of Arbitration was also imposing another $4 billion fine on Pakistan.

He said soon after taking over the charge, Prime Minister Imran Khan aggressively pursued the case and directed to draw a suitable solution as early as possible.

As a result an agreement was settled today under which Antofagasta decided not to participate in the reconstituted project and withdrew from its claim of $3.9 billion in place of $900 million.

He informed that the $900 million would be paid by the three SOEs and in return they would get the 25 per cent share of the project.

Had the PM not taken his personal interest in the case, Pakistan would have to pay the huge amount of $11 billion as a penalty, he added.

Shaukat Tarin said Pakistan and Balochstan would be benefited for over 100 years from this project and the total worth is estimated to be over $100 billion.

Terming the new agreement as a land mark achievement for Pakistan, Hammad Azhar said it was a historic day as it had not only avoided $11 billion worth of penalty but also created a new opportunity for Pakistan.

He said this was not for first time the PTI government had achieved the landmark success, but it had also avoided the country from moving to FATF black list by implementing 32 out of 35 conditions. The government also saved billions of dollars by renegotiating the costly IPP agreements.

The minister informed that according to the Barrick Gold, Reko Diq was the only one part with such huge gold and copper reserves. There were also other reserves in the area.

So a lucrative mining cluster is going to be developed in Pakistan, he added.

March 21, 2022
Adjustment restrictions hamper return filing by retailers

Retailers falling under Tier-1 have informed the Federal Board of Revenue (FBR) that they were unable to file monthly sales tax returns due to denial of adjustment by IRIS portal.

A number of retailers jointly sent a letter to FBR chairman apprising about unfavorable behavior of IRIS Portal by denying adjustment against credit notes issued by Tier-1 retailers.

READ MORE: FBR announces winners of third POS invoice draw

The retailers drew attention of the FBR chairman towards Section 9 of the Sales Tax Act, 1990 read with Rule 20 of the Sales Tax Rules, 2006, tax invoice issued by a registered person can be amended/modified/cancelled through issuance of credit note as a result of cancellation of supply of return of goods or a change in the nature of supply or change in the value of the supply.

They highlighted that sales made by Tier-1 retailers, as defined in clause 43A of Section 2 of the Sales Tax Act, 1990, to the end consumers are integrated with the FBR computerized system for real time reporting of sales in line with the Rules.

READ MORE: FBR identifies 1,421 retailers for tax integration

The FBR chairman has been informed that in case of sales return, credit note (sales return invoice) is issued by Tier-1 retailers in accordance with the relevant provisions of the Sales Tax Act, 1990. “IRIS portal of the FBR is also accepting this position and accepting credit notes issued by Tier-1 retailers, however, surprisingly, sales tax adjustment, relating to credit notes, which have been allowed in one month are being added back in sales tax liability of the next month in the IRIS based sales tax return.”

The retailers said: “… this practice of the sales tax return portal is strictly against the law.”

READ MORE: FBR makes rules for sealing retail outlets

They said that if such illegal restrictions are imposed on Tier-1 retailers, who have invested huge amounts in hardware as well as software for integration of sales tax reporting with the FBR, how would it be possible for the FBR to attract other retailers to get themselves registered with the FBR. “Instead of appreciating the efforts of Tier-1 retailers, they are being denied their legal and legitimate right of sales tax adjustment on credit notes.”

Due to serious flaw in the online sales tax return filing portal, a majority of Tier-1 retailers are still unable to file sales tax return for the month of January 2022 onward.

The FBR chairman has been urged to direct concerned authorities to resolve the issue at the earliest to enable Tier-1 retailers to submit their sales tax return.

READ MORE: POS invoice verification for prize scheme surges by 63%

March 20, 2022