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Author: Mrs. Anjum Shahnawaz

  • Pakistan’s trade deficit swells by 100% in 1HFY22

    Pakistan’s trade deficit swells by 100% in 1HFY22

    ISLAMABAD: Pakistan’s trade deficit has doubled to $24.8 billion during first half (July – December) of 2021/2022 1HFY22. The trade deficit was $12.36 billion in the same half of the last fiscal year.

    The import bill of the country surged by 63 per cent to $40 billion during the first half of the current fiscal year as compared with $24.47 billion in the same half of the last fiscal year, according to data shared by Arif Habib Limited.

    READ MORE: Pakistan’s trade deficit widens by 112% to $20.59 billion

    The exports registered a growth of 25 per cent to $15.13 billion during first six months of the current fiscal year as compared with $12.11 billion in the corresponding months of the last fiscal year.

    The trade deficit for the month of December 2021 contracted by 18 per cent to $4.14 billion as compared with $5.03 billion in November 2021.

    READ MORE: Pakistan’s import bill surges by 65% in four months

    Import bill of the country declined by 13 per cent to $6.9 billion in December 2021 as compared with $7.93 billion in November 2021. Meanwhile exports of the country also fell by five per cent to $2.76 billion in December 2021 as compared with $2.9 billion in November 2021.

    READ MORE: Pakistan’s trade deficit doubles in first quarter

  • New rates of FED on local, imported motor vehicles

    New rates of FED on local, imported motor vehicles

    ISLAMABAD: The federal government has proposed enhancement in federal excise duty (FED) on imported and locally assembled vehicles through mini-budget.

    The government on December 30, 2021 presented Finance (Supplementary) Bill, 2021 to take tax measures to generate additional revenue for improve fiscal situation of the country. One of the major revenue measure is increasing the FED on imported and locally manufactured motor vehicles.

    READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services

    Sources said that the Federal Board of Revenue (FBR) had estimated to generate additional Rs6.5 billion through the changes.

     According to the changes proposed, the FED on imported completely built unit (CBU) up to 1,000 CC the rate shall be unchanged at 2.5 per cent ad valorem.

    READ MORE: Mini-budget: income tax rates proposed for foreign TV dramas

    However, CBU imported vehicles between 1001CC to 1799CC the FED has been proposed to enhance to 10 per cent from 5 per cent.

    Similarly, the CBU imported motor vehicles between 1800CC to 3000CC the FED has been increased to 30 per cent from 25 per cent.

    Likewise, the motor vehicles above 3000CC, the FED has been enhanced to 40 per cent from 30 per cent.

    READ MORE: Tax exemptions worth Rs343 billion withdrawn through mini-budget

    The FED on locally manufactured motor vehicles has been kept unchanged at zero per cent for engine capacity up to 1000CC.

    However, motor vehicles with engine capacity between 1000CC to 2000CC and exceeding 2000CC, the FED has been enhanced to 5 per cent from 2.5 per cent and enhanced to 10 per cent from 5 per cent, respectively.

    The Federal Board of Revenue (FBR) said that the FED has been announced to increase to 30 per cent from existing rate of 25 per cent on import of double cabin (4X4) pick-up vehicles.

    Similarly, the FED on locally manufactured double cabin (4X4) has been increased to 10 per cent from existing rate of 7.5 per cent.

    READ MORE: Mini-budget: Advance tax on motor vehicles doubles

  • Salt producers flay tax withdrawal through mini-budget

    Salt producers flay tax withdrawal through mini-budget

    KARACHI: Ismail Suttar, Chairman, Salt Manufacturers Association of Pakistan (SMAP) has urged the government not to levy taxes on Iodized salt through mini-budget as the Covid-19 pandemic has already hit the salt export market badly due to rising freight costs and supply chain disruptions.

    READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services

    In a statement, he said: “If the government withdraws the exemption from Iodized salt, then it will create a huge impact on the cost of living of a common man as salt is the most essential ingredient in every single food item that a human consumes”.

    SMAP Chairman further said that Salt is not only an essential food ingredient but has numerous health benefits especially the Iodized salt which creates hormones to regulate heart rate and blood pressure as well as burns extra fat deposits leading to heart diseases.

    READ MORE: Mini-budget: income tax rates proposed for foreign TV dramas

    “Previous governments have always promoted the use of Iodine in salt keeping in view the health of our children who are already suffering from stunted growth and obesity”, he said, adding that this ruthless decision to impose sales tax on such an essential item is beyond understanding and it only shows that the government seems to have no clue of its actions and is ready to meet the revenue targets even if it must compromise the common man’s health.

  • Pak-Afghan 2nd round talks on DTA concludes

    Pak-Afghan 2nd round talks on DTA concludes

    ISLAMABAD: Pakistan and Afghanistan have concluded the second round of talks on double taxation agreement (DTA).

    According to a statement issued on Saturday said that Afghanistan Revenue Department (ARD) and Federal Board of Revenue (FBR) concluded second round of negotiations on Double Taxation Agreement (DTA) between Pakistan and Afghanistan.

    READ MORE: Power of the Board and Commissioner to call for records

    The four-member delegation of Afghanistan Revenue Department (ARD) were on visit to Pakistan, which commenced from December 27, 2021.

    The inaugural session was presided over by Qaiser Iqbal, Director General (International Taxes), FBR who welcomed the delegates and hoped that the proposed DTA between the two brotherly countries would go a long way in fostering economic relationships and would also contribute to the development of both the countries.

    The negotiations were conducted in the most cordial and friendly atmosphere. Both the delegations discussed all the outstanding issues of the first round of negotiations held in Islamabad from 28th to 30th March, 2016. Both the sides presented and appreciated each other’s respective positions.

    However, it was agreed that the un-resolved issues would be discussed and finalized in the third round of negotiations to be held in Kabul, Afghanistan on mutually agreed dates.

    The Afghan delegation was led by Esmatullah Salimi, Revenue Audit Director, ARD and included Abdul Wali Noori, Technical Deputy Director-General, ARD,  Nida Mohammad Seddiqi, Legal Services Director, ARD and Najeebullah Ahmadzai, Advisor to MoF, while the Pakistan delegation was headed by Qaiser Iqbal, Director General (International Taxes), FBR and included Barrister Nowsherwan Khan, Chief (International Taxes) and Ms. Hira Nazir, Secretary (Tax Treaties & Conventions), FBR.

  • Headline inflation rises by 12.3% in December 2021

    Headline inflation rises by 12.3% in December 2021

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has increased by 12.3 per cent on year-on-year basis in December 2021 as compared to an increase of 11.5 per cent in the previous month and 8.0 per cent in December 2020.

    Pakistan Bureau of Statistics (PBS) on Saturday said that on month-on-month basis, it decreased by -0.02 per cent in December 2021 as compared to increase of 3.0 per cent in the previous month and a decrease of -0.7 per cent in December 2020.

    READ MORE: Headline inflation surges by 11.5% in November 2021

    CPI inflation Urban, increased by 12.7 per cent on year-on-year basis in December 2021 as compared to an increase of 12.0 per cent in the previous month and 7.0 per cent in December 2020. On month-on-month basis, it increased by 0.3 per cent in December 2021 as compared to increase of 2.9 per cent in the previous month and a decrease of -0.3 per cent in December 2020.

    READ MORE: Headline inflation increases by 9.2% in October

    CPI inflation Rural, increased by 11.6 per cent on year-on-year basis in December 2021 as compared to an increase of 10.9 per cent in the previous month and 9.5 per cent in December 2020. On month-on-month basis, it decreased by -0.5 per cent in December 2021 as compared to increase of 3.1 per cent in the previous month and a decrease of -1.2 per cent in December 2020.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 20.9 per cent in December 2021 as compared to an increase of 18.1 per cent a month earlier and an increase of 9.1 per cent in December 2020. On MoM basis, it decreased by -0.4 per cent in December 2021 as compared to increase of 3.6 per cent a month earlier and a decrease of -2.7 per cent in December 2020.

    READ MORE: Comparing inflation target not correct: State Bank

    Wholesale Price Index (WPI) inflation on YoY basis increased by 26.2 per cent in December 2021 as compared to an increase of 27.0 per cent a month earlier and an increase of 5.7 per cent in December 2020. WPI inflation on MoM basis decreased by -0.2 per cent in December 2021 as compared to an increase of 3.8 per cent a month earlier and an increase of 0.3 per cent in corresponding month i.e. December 2020.

  • Incentives approved for exchange companies on dollar surrender

    Incentives approved for exchange companies on dollar surrender

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved incentive program for exchange companies on surrendering dollars in interbank.

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  • Prices of all POL products increased to wish New Year

    Prices of all POL products increased to wish New Year

    ISLAMABAD: The government on Friday increased prices of all petroleum products to wish the nation the New Year 2022.

    The prices have been increased across the board around Rs4 per liter on all the products.

    READ MORE: Petrol price reduces to Rs140.82 per liter

    The prices have been implemented at 00:00 hours of January 01, 2022 for next fortnight.

    According to a notification issued by the finance division the new price of petrol has been increased by Rs4 to Rs144.82 per liter from Rs140.82.

    The rate of high speed diesel (HSD) has been increased by Rs4 to Rs141.62 per liter from Rs137.62.

    READ MORE: SBP revises manual on remittances for petroleum sector

    Similarly, the price of kerosene has been increased by Rs3.95 to Rs113.53 per liter from Rs109.53.

    Likewise, the price of light diesel oil has been increased by Rs4.15 to Rs111.06 per liter from Rs107.06.

    The notification stated that in the fortnightly review of petroleum products prices, the prime minister had rejected the proposal of Oil and Gas Regulatory Authority (OGRA) for increase in prices of petroleum products and advised to increase only Rs4 per liter to meet the petroleum levy target agreed with the International Monetary Fund (IMF).

    “Sales tax on petrol and diesel has been adjusted downwards as compared to December 16, 2021 to keep the prices lower,” the notification stated.

    READ MORE: FBR notifies increase in sales tax on petrol, HSD

  • FBR collects Rs2.92 trillion in first half of FY22

    FBR collects Rs2.92 trillion in first half of FY22

    The Federal Board of Revenue (FBR) has achieved a significant milestone by provisionally collecting Rs2.92 trillion during the first half (July – December) of the fiscal year 2021/2022 (FY22), surpassing the half-year target of Rs2.63 trillion by an impressive Rs287 billion.

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  • Mini-budget: income tax rates proposed for foreign TV dramas

    Mini-budget: income tax rates proposed for foreign TV dramas

    ISLAMABAD: The government on Thursday presented a mini-budget and introduced income tax rates for foreign produced TV dramas.

    The changes have been proposed through the Finance (Supplementary) Bill, 2021 presented before the parliament. Sources in the Federal Board of Revenue (FBR) said that the imposition of tax on foreign TV dramas would general sizeable revenue.

    READ MORE: Mini-budget: Advance tax on motor vehicles doubles

    The proposed advance tax rates on foreign TV serials, dramas and advertise are:

    — On foreign-produced TV serials @ Rs.1 million per episode

    — On foreign-produced TV dramas @ Rs.3 million per production

    — On advertisement starring foreign actors @ Rs.0.5 million per second

    READ MORE: Tax exemptions worth Rs343 billion withdrawn through mini-budget

    In order to apply the tax rates, a new Section 236CA to Income Tax Ordinance, 2001 has been proposed through Finance (Supplementary) Bill, 2021.

    Following is the text of the proposed section:

    “236CA. Advance tax on TV plays and advertisements. – (1) Any licensing authority certifying any foreign TV drama serial or a play dubbed in Urdu or any other language, for screening and viewing on any landing rights channel, shall collect advance tax at the rates specified in Division XA of Part IV of the First Schedule.

    READ MORE: Text of Finance (Supplementary) Bill, 2021

    (2) Any licensing authority certifying any commercial for advertisement starring foreign actor, for screening and viewing on any landing rights channel shall collect advance tax at the rates specified in Division XA of Part IV of the First Schedule.

    (3) The tax required to be collected under this section shall be minimum tax in respect of income arising from such drama serial or play or advertisement referred to in sub-section (1) or (2) of this section.”

    READ MORE: Annual collection of capital gain tax falls by 26%

  • Mini-budget: Advance tax on motor vehicles doubles

    Mini-budget: Advance tax on motor vehicles doubles

    In a bid to curb the practice of on-money transactions on motor vehicles and boost advance tax revenues, the government has introduced significant changes in the Finance (Supplementary) Bill, 2021, commonly referred to as the mini-budget.

    (more…)