The government on Thursday announced a significant hike in the price of petrol, increasing it by Rs 4 per liter, bringing the cost to an all-time high of Rs 127.30 per liter. This marks the highest petrol price in Pakistan’s history. The new prices, along with adjustments to other petroleum products, will take effect from October 1, 2021.
(more…)Author: Mrs. Anjum Shahnawaz
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ECC approves import of 550,000MT wheat
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved a summary for import of 550,000 metric tons of wheat for the fiscal year 2021/2022.
Finance Minister Shaukat Tarin presided over the meeting of the ECC.
The ECC approved the summary by the ministry of National Food Security and Research (NFS&R), regarding the award of the fifth international wheat tender to import 550,000 MT (after matching process) of wheat for the FY 2021/2022.
ECC granted approval to the summary presented by the Ministry of Interior for Technical Supplementary Grant amounting to Rs.83.3 million for procuring services from NADRA regarding the project for automation of Power of Attorney (POA) for Overseas Pakistanis. The ECC accorded approval with the direction that MOFA and M/o Interior may hold a joint consultative session to work out modalities in this regard.
Ministry of Industries and Production tabled a summary before ECC regarding the continuation of the Prime Minister’s relief package-2020 for the provision of five essential items on subsidized rates which are scheduled to expire on September 30, 2021. The ECC granted an extension for one month with a direction to present a detailed summary before ECC, keeping in view, international price hike in essential food commodities.
On a summary moved by the Power Division regarding quarterly tariff adjustments of K-Electric, the ECC decided that the Power Division may approach NEPRA to review its earlier decision on the issue and present an updated summary before ECC for consideration.
Power Division tabled another summary regarding levy of Sales Tax on subsidy granted by Federal Government to DISCOs. After seeking input from all concerned, the ECC decided that the matter may be referred to the Law Division for seeking opinion and legal interpretation may be presented before the Committee for further deliberations.
The ECC considered and approved a summary, presented by the Ministry of Information Technology and Telecommunications, regarding revised budget estimates for the FY 2020-21 and FY 2021-22 respectively.
The ECC approved summary by the Power Division regarding approval of payment mechanism for TNB Liberty Power Limited.
The ECC also approved the proposal as part of settlement with other relevant IPPs.
Lastly, on a summary moved by the M/o Industries and Production, the ECC approved a tender for import of 100,000 MT of urea for building strategic reserves of urea fertilizer during the Rabi season FY 2021-22.
The meeting was attended by Federal Minister for Planning Asad Umar, Federal Minister for Energy Hammad Azhar, Federal Minister for Railways Azam Khan Swati, Federal Minister for National Food Security & Research Syed Fakhar Imam, Federal Minister for Interior Sheikh Rasheed Ahmad, MOS for Information Farrukh Habib, Federal Secretaries, Chairman FBR and other senior officers.
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Exchange rates in PKR vs foreign currencies on Sept 30
KARACHI: Following are the exchange rates of foreign currencies in Pak Rupee (PKR) on September 30, 2021 (The rates are updated at 11:40AM):
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FBR assures traders of facilitating Pak-Afghan trade
ISLAMABAD: Federal Board of Revenue (FBR) on Saturday assured the traders of providing all facilities for the clearance of goods at the Pak-Afghan border.
Chairman Federal Board of Revenue, Dr. Muhammad Ashfaq Ahmad accompanied by Syed Tariq Huda Member(Customs Operations) and Saeed Jadoon Member (Customs Policy) on Saturday visited Torkham Border and reviewed the pace and quality of services being provided by Pakistan Customs to facilitate trade between Pakistan and Afghanistan.
Immediately after his arrival, he ensured the clearance of about 1400 trucks loaded with fruit from Afghanistan which had got stuck at the border.
The customs staff assured him to accelerate the process of 100 more trucks awaiting clearance.
Earlier, he held an important meeting with traders from both sides of the border and assured them of all possible assistance by FBR in ensuring the smooth and easy flow of bilateral trade.
He positively hoped that the Customs staff posted there will maintain the highest standards of professional conduct in the discharge of their official duty.
It is pertinent to mention that on Friday FBR had issued an important circular granting special exemption from Sales Tax to the import of fresh fruit from Afghanistan.
This rare concession by FBR is being appreciated by traders from both sides as a landmark decision that will certainly promote trade between the two neighboring countries.
A day earlier, the FBR issued a press release stating that the chairman would visit the Pak-Afghan border to oversee the function of currency declaration.
The FBR through the press release denied reports of currency smuggling.
It said Pakistan Customs has made it mandatory for all passengers flying out of the country to undergo thorough personal scrutiny and 100 per cent declaration of currency through an automated process in order to ward off this nefarious illegal activity. This leaves the little possibility of the subject undesirable practice.
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New penalty regime introduced for non-filing tax returns
The Federal Board of Revenue (FBR) has introduced new penalty regime introduced for non-filing tax returns in order to encourage documentation.
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NADRA’s computation to be treated as assessment: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has said that computation of income and assets prepared by the National Database Registration Authority (NADRA) shall be treated as assessment.
The FBR in explanation to Tax Laws (Third Amendment) Ordinance, 2021 said that a new section 175B has been inserted in the Income Tax Ordinance, 2001 aiming to broaden the tax base through collaboration between NADRA and FBR.
Sub-section (1) of section 175B mandates NADRA to share its records or any other information available or held by it, on its own motion or upon application by the Board.
Sub-section (2) thereof allows NADRA to compute indicative income and tax liability on the basis of various expenses, receipts, assets, properties and liabilities etc. using artificial intelligence, mathematical or statistical modeling or any modern methods.
The FBR may forward such information to the concerned tax authorities having jurisdiction in connection to the subject matter relating to the information, who may utilize the information for the purpose of levy of tax.
The indicative income and tax liability shall be communicated to the person to whom it relates. Such person shall have the option to pay tax as prescribed. In case of failure to pay such liability within stipulated
timeframe, the tax authority shall take action under the provisions of the Ordinance on the basis of the Indicative Income so computed.
If the person against whom the liability has been determined under sub-section (4) of the newly inserted section pays such liability, such payment shall be construed to be an amended assessment order under section 120 or 122(1) or 122(4) as the case may be.
Board is also vested with the powers to make rules for the purposes of subsections (4) and (5) to prescribe the extent of installments, and any relief regarding the penalty and default surcharge, and time limits.
To provide an enabling environment for the joint mechanism the restrictions on provision of information in terms of section 198 have been done away with and the said section is now omitted.
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Weekly Review: jittery sentiments likely
KARACHI: Investors’ sentiments are likely jittery during the next week owing to measures taken by the government to curtail import bill.
Analysts at Arif Habib Limited said that with the government making all efforts to restrict imports, tax collection (silver lining in the domestic economic climate at the moment), may also be hurt.
Market sentiments may be tested once again with the government proposing a hike in gas/electricity tariffs.
However, the resumption of the IMF program next month could provide a breather.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.3x (2021) compared to Asia Pac regional average of 14.4x while offering a dividend yield of 8.1 per cent versus 2.3 per cent offered by the region.
This week marked the current fiscal year’s worst-performing week to date (second on CY basis), the equity bourse closed at 45,074 points (down by 3.4 per cent / 1,563 points WoW).
Amid rising demand and the upcycle in international commodities exacerbating the deficit on the external front, raising red flags over future CPI readings and building pressure on the Pak Rupee, the SBP commenced tapering its monetary stimulus.
A 25 basis points hike in the policy rate, shifting the focus from prioritizing growth to now ensuring sustainability, was put into effect to stop the economy from overheating.
While the government also adopted other measures to curtail demand such as tightening regulatory and consumer financing policies for auto consumers. Hence, investors remained on the edge.
Sector-wise negative contributions came from i) Technology (275 points), ii) Cement (196 points), iii) Commercial banks (148 points), iv) Fertilizer (137 points), and v) E&P (134 points). Whereas, sectors which contributed positively were i) Miscellaneous (41 points), and ii) Chemical (3 points). Scrip-wise negative contributors were TRG (142 points), SYS (124 points), HBL (71 points), OGDC (70 points) and PPL (55 points). Meanwhile, scrip-wise positive contribution came fr om PSEL (46 points), MCB (18 points) and BAFL (15 points).
Foreign buying was witnessed this week, settling at USD 6.7 million compared to a net sell of USD 10.9 million last week. Major buying was witnessed in Other Sectors (USD 6.1 million), Technology and Communication (USD 3.0 million) and Oil and Gas Marketing Companies (USD 1.8 million). On the local front, selling was reported by Individuals (USD 7.5 million) followed by Companies (USD 3.5 million). Average volumes clocked-in at 384 million shares (down by 4 per cent WoW) while average value traded settled at USD 73 million (down by 18 per cent WoW).
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PSW to reduce trade cost, time, and complications: Tarin
ISLAMABAD: Finance Minister Shaukat Tarin on Friday said that Pakistan Single Window (PSW) will facilitate trade by reducing cost, time and complications.
Shaukat Tarin presided over the first meeting of Governing Council of PSW held at the Finance Division.
The finance minister appreciated the progress and stated that PSW will reduce time, cost and complications while contributing significantly towards ease of doing business in the country.
He said that PSW will enable Pakistan to unlock its potential in becoming a hub for regional as well as international trade and transit.” Deep rooted reforms being undertaken under PSW program by the government will promote trade competitiveness with enhanced transparency and efficiency,” Tarin added.
The new system will leverage information and communication technology to ensure better compliance with the cross-border trade regulations.
The finance minister commended the efforts of Pakistan Customs as the lead agency of PSW program and all those who have been part of PSW, a transformational project, which will take Pakistan’s trade to the next level. He affirmed full support and facilitation on the occasion.
The Secretary of the Governing Council briefed the Finance Minister about the PSW, a virtual system which is connecting the concerned Ministries, Customs, port authorities, banks and other relevant departments after major process re-engineering to provide a single window for management of international trade.
The PSW is a facility that allows parties involved in trade and transport in Pakistan to lodge standardized information and documents at a single registration point.
This eliminates the hidden costs and removes inefficiencies in governance of international trade including logistics.
He further briefed that first phase of PSW program has been rolled out while its 2nd and 3rd phases will be completed within the next two years.
The implementation of PSW will make Pakistan’s ports competitive by minimizing the transaction costs and also enhance efficient provision of B2B and B2C value added services. The cargo would be cleared in a minimum possible time.
Over 75 regulatory departments will be fully integrated through ICT based system, providing a single point of entry to facilitate trading across borders with minimal need for any physical contact, he added.
The Governing Council (GC) is the apex body in the approved Business model of PSW under Pakistan Single Window Act, promulgated in April this year.
The GC comprises of key stakeholders and prominent private sector subject specialists to oversee timely completion of this important project while removing hurdles in its implementation.
The Finance Minister is the Chairperson of PSW’s Governing Council which also includes Secretary Commerce, Secretary M/o NFS&R, Secretary Maritime Affairs, Secretary Science & Technology, Secretary Narcotics Control Division, Member Customs Operations and CEO PSW Company.
Among others, Federal Secretary for Narcotics Akbar Durrani, Additional Secretary Commerce, Additional Secretary Economic Affairs Division, Member Customs FBR and senior officers of the Ministry of National Food Security & Research, Ministry of Health, Ministry of Science & Technology, Ministry of Maritime Affairs participated in the meeting.
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KSE-100 index plunges by 1,562 points in week
KARACHI: The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) witnessed a decline of 223 points on Friday and witness a fall of 1,562 points to end the week.
The KSE-100 index ended at 45,074 points from the previous day’s closing of 45,297 points. The index continuously fell during all the days during the outgoing week.
The index ended at 46,636 points last Friday i.e. September 17, 2021, and closed at 45,074 points on September 24, 2021.
Analysts at Topline Securities said that the stock market continued its bearish momentum.
The KSE-100 index largely remained in the red zone on the last trading session of the week to close at 45,074 level, as an increase in the policy rate by 25 basis points to 7.25 per cent by the State Bank of Pakistan (SBP) earlier this week kept the investor sentiment bearish.
TRG, MCB, CHCC, INDU and FFBL lost value to weigh down on the index by 102 points. Traded volume and value for the day stood at 370 million shares and Rs.11.78 billion respectively.
BYCO was today’s volume leader with 47 million shares.
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PKR falls against dollar in interbank market
KARACHI: The Pak Rupee (PKR) continued its slide against the dollar on Friday in the interbank foreign exchange market.
The rupee fell by five paisas to close at Rs169.08 to the dollar from the previous day’s closing of Rs168.03 in the interbank foreign exchange market.
The rupee depreciated despite the initiatives taken by the State Bank of Pakistan (SBP) to support the balance of payment.
The SBP a day earlier issued revised Prudential Regulations (PRS) for Consumer Financing. The targeted step will help to moderate demand growth in the economy, leading to slower import growth and thus supporting the balance-of-payments, the SBP said.
The changes in the regulations effectively prohibit financing for imported vehicles, and tighten regulatory requirements for financing of domestically manufactured/ assembled vehicles of more than 1000 cc engine capacity and other Consumer Finance facilities like personal loans and credit cards, the SBP added.
The local currency is near to make another historic low. The rupee hit all-time low of Rs169.12 on September 15, 2021.