Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Weekly Review: market likely to perform well on growth expectations

    Weekly Review: market likely to perform well on growth expectations

    KARACHI: The stock market likely to perform well on expectations of growth in various accounts, including commencement of tight monetary stance.

    Analysts at Arif Habib Limited said that the market to perform well in 2021/2022 on account i) robust earnings growth forecast of cement, steel and allied sectors amid strong cyclical demand driven by historic high PSDP allocation and focus on Naya Pakistan Housing scheme, ii) expectation of an Auto and Refinery policy, iii) downwards sticky oil prices supporting the E&P sector, and iv) commencement of monetary tightening which should once again garner interest in commercial banks.

    The benchmark KSE-100 of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.9x (2021) compared to Asia Pac regional average of 16.5x while offering a dividend yield of ~6.9 per cent versus ~2.3 per cent offered by the region.

    The market remained range bound this week with volatile trading on account of June-end closing and adjustment of portfolios. Moreover, as the debate on the Federal Budget moved towards final stages in the Parliament, some stiffness was witnessed in the political climate.

    Albeit, the Budget was passed with a majority vote. The market also gained momentum on the first day of the new fiscal year, erasing previous losses. The index closed at 47,686 points, up by 0.2 per cent / 83 points WoW.

    Sector-wise positive contributions came from i) Technology (105 points), ii) Pharma (68 points), iii) Food and Personal care (51 points), iv) Tobacco (22 points), and v) Insurance (14 points). Whereas, the sectors that contributed negatively include Commercial Banks (46 points), Power Generation & Distribution (44 points), Oil & Gas Exploration Companies (39 points), Oil & Gas Marketing (36 points) and Refinery (18 points). Scrip-wise positive contributors were TRG (88  points), AGP (54  points), LUCK (41  points), UNITY (37  points) and MEBL (25  points). Scrip-wise negative contributors were HBL (67  points), HUBC (65  points), UBL (38  points), OGDC (35  points) and HASCOL (34  points).

    Foreign selling continued this week clocking-in at USD 8.4 million compared to a net sell of USD 7.9 million last week. Selling was witnessed in Commercial Banks (USD 3.2 million) and Other sectors (USD 1.4 million). On the domestic front, major buying was reported by Individuals (USD 13.6 million and Companies (USD 13.4 million). Average volumes arrived at 622 million shares (down by 10 per cent WoW) while average value traded settled at USD 107 million (down by 4 per cent WoW).

  • New rates of regulatory duty on imported smart phones

    New rates of regulatory duty on imported smart phones

    ISLAMABAD: Federal Board of Revenue (FBR) has notified new rates of regulatory duty to be imposed on imported mobile phones during.

    The FBR issued SRO 840(I)/2021 dated June 30, 2021 to notify regulatory duty on 599 tariff lines.

    Following are the rates of regulatory duty on mobile phone with effect from July 01, 2021:

    HS CodeDescriptionRegulatory Duty
    8517.1219Other having C&F Value up to US$ 30 per set excluding Smart PhonesRs.300/set
    8517.1219Other (having C&F Value above US$ 30 per set but not exceeding US$ 100 per set, including Smart Phones having C&F value up to US$ 30 per set)Rs.3,000/set
    8517.1219Other (having C&F Value above US$ 100 per set but not exceeding US$ 200 per set)Rs.7,500/set
    8517.1219Other (having C&F Value above US$ 200 per set but not exceeding US$ 350 per set)Rs.11,000/set
    8517.1219Other (having C&F Value above US$ 350 per set but not exceeding US$ 500 per set)Rs.15,000/set
    8517.1219Other (having C&F Value above US$ 500 per set)Rs.22,000/set
  • Tax officials’ power to amend assessment without audit selection withdrawn

    Tax officials’ power to amend assessment without audit selection withdrawn

    KARACHI: Federal Board of Revenue (FBR) has said that the powers of Inland Revenue officers to conduct an inquiry for amendment of assessment without selection of audit have been withdrawn.

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  • Sindh Revenue Board fails to achieve annual collection target

    Sindh Revenue Board fails to achieve annual collection target

    KARACHI: The Sindh Revenue Board (SRB) has missed the revenue collection target of Rs135 billion for fiscal year 2020/2021 and collected Rs128 billion during the year.

    However, the collection for 2020/2021 has registered an increase of 21 per cent in revenue collection for fiscal year 2020/2021 despite adverse economic environment due to coronavirus.

    The SRB collected Rs128 billion during fiscal year 2020/2021 as compared with Rs106 billion in the preceding fiscal year, a top official said on Thursday.

    The official said the growth in revenue collection is impressive considering the general economic slowdown and the resurgence of COVID during the year.

    The SRB however missed the revenue collection target of Rs135 billion for the fiscal year under review.

    The official that the collection of Rs128 billion includes record receipts of Rs121 billion of Sindh sales tax, representing a growth of 21 percent over the collection of Rs100 billion during 2019/2020.

    Collection of Sindh Workers Welfare Fund by SRB during 2020/2021 stood at Rs7 billion as compared to the collection of Rs6 billion during the preceding year, which also represents a growth of 17 per cent.

    The official said that the milestone that SRB had reached represented a consistency of achievement since organization’s inception since 2011, courtesy the hard work and steadfastness demonstrated by the workforce beyond the normal call of duty.

    The official said that no new tax was levied in the Sindh Budget 2020/2021. The business environment was also significantly unfavorable for the services sector which was hard hit by the COVID-19 throughout the year, forcing partial lockdowns.

  • Capital gain tax rates enhanced on disposal of immovable properties

    Capital gain tax rates enhanced on disposal of immovable properties

    ISLAMABAD: The Federal Board of Revenue (FBR) has said that the rates of capital gain tax (CGT) on disposal of immovable properties have been slightly enhanced through Finance Act, 2021.

    The FBR in its explanation to changes made through Finance Act, 2021 in Income Tax Ordinance, 2001, said that a separate block of taxation of capital gain on the sale of immoveable property is available under the Ordinance.

    The gain arising on the disposal of immovable property for more than 4 years, is not taxable.

    The capital gain arising on the disposal of immovable properties is taxable to extent of 100 per cent, 75 per cent, 50 per cent and 25 per cent, if property is sold within 1, 2, 3 and 4 years respectively.

    The gain so calculated on the basis of holding period was taxable at the rates ranging from 2.5 per cent to 10 per cent. Now these rates have been slightly enhanced through changes in Division VIII of Part I of First schedule of the Ordinance, however, the holding period concession remains intact.

    ―Division VIII

    Tax on capital gains on disposal of Immoveable Property

    The rate of tax to be paid under sub-section (1A) of section 37 shall be as follows:-

    TABLE S.NoAmount of GainRate of Tax
    (1)(2)(3)
    1.Where the gain does not exceed Rs. 5 million3.5 per cent
    2.Where the gain exceeds Rs. 5 million but does not exceed Rs. 10 million7.5 per cent
    3.Where the gain exceeds Rs. 10 million but does not exceed Rs. 15 million10 per cent
    4.Where the gain exceeds Rs. 15 million15 per cent
  • Form-E requirement to be abolished for PSW exports

    Form-E requirement to be abolished for PSW exports

    KARACHI: State Bank of Pakistan (SBP) on Friday said that requirement of Electronic Form-E (EFE) will be eliminated for carrying out exports through Pakistan Single Window (PSW).

    In this regard SBP has notified revisions in foreign exchange regulations for export of goods from Pakistan (Chapter 12 of the Foreign Exchange Manual).

    The key changes include amendments in regulations to facilitate export transactions through the Pakistan Single Window when it becomes operational.

    This will eliminate the requirement of Electronic Form-E (EFE) for carrying out exports from Pakistan.

    Another key amendment introduced in the revised export regulations is the framework for facilitating Pakistani exporters/ entrepreneurs to sell their products through international digital marketplaces including Amazon, e-Bay, Ali Baba under Business to Business to Consumer (B2B2C) e-Commerce model.

    These regulations would pave the way for Pakistani exporters particularly the SME exporters to reach out to millions of international consumers for selling their products. This would open up the window of new opportunities for the Pakistani business community and result in boosting the economic activity and creation of new employment opportunities in the entire value chain.

    It is pertinent to mention here that considering the market dynamics and keeping pace with changing business environment, SBP is in process of revising the foreign exchange regulations, in consultation with relevant stakeholders in a phased manner. The primary objective of these revisions is to promote ease of doing business by simplifying the existing instructions, removing the redundancies and delegating more powers to the Authorized Dealers for facilitation of the stakeholders.

    Earlier, SBP and Pakistan Customs had joined hands in 2015 and switched from manual export form to electronic export form by implementing EFE Module in WeBOC system. EFE is an electronic declaration submitted by exporters to the Pakistan Customs and is required before filing of Goods Declaration to the Pakistan Customs for clearance of each export consignment. However, once the Pakistan Single Window (PSW) becomes operational, the requirement for EFE will be eliminated thus enhancing ease of doing business for exporters. PSW system is a facility that will allow parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfil all import, export, and transit-related regulatory requirements. The system will help reduce the time and cost of doing business by making trade related business processes more efficient, transparent and consistent.

  • Dollar gains 33 paisas on foreign payment demand

    Dollar gains 33 paisas on foreign payment demand

    KARACHI: The US dollar on Friday strengthened by 33 paisas against the Pak Rupee on higher demand for foreign payments.

    The rupee ended at Rs157.87 to the dollar from the previous day’s closing of Rs157.54 in the interbank foreign exchange market.

    Experts said that demand for the foreign currency remained higher during the day because the market opened after the bank holiday. The foreign exchange market remained closed on July 01, 2021 on account of bank holiday.

  • KIBOR rates on July 02, 2021

    KIBOR rates on July 02, 2021

    KARACHI: State Bank of Pakistan (SBP) on Friday issued following Karachi Interbank Offered Rates (KIBOR) on July 02, 2021.

     TenorBIDOFFER
    1 – Week6.917.41
    2 – Week6.957.45
    1 – Month7.017.51
    3 – Month7.207.45
    6 – Month7.427.67
    9 – Month7.518.01
    1 – Year7.578.07
  • SBP issues customers exchange rates on July 02, 2021

    SBP issues customers exchange rates on July 02, 2021

    Islamabad, July 2, 2021 – The State Bank of Pakistan (SBP) has officially released the exchange rates for various currencies on July 2, 2021, providing a reference for banks and financial institutions for customer transactions. These rates serve as a benchmark for buying and selling different foreign currencies against the Pakistani Rupee (PKR).

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  • Law amended to prevent tax avoidance on gifts

    Law amended to prevent tax avoidance on gifts

    KARACHI: The Finance Act, 2021 has amended Income Tax Ordinance, 2001 to prevent tax avoidance on giving away gifts, official sources said on Friday.

    The Federal Board of Revenue (FBR) while explaining the Finance Act, 2021 stated that tax law had provided a special mechanism for treatment of transfer of assets under certain transactions.

    The non-recognition rules provide that no gain or loss shall arise on disposal of assets under certain special arrangements enumerated in sub-section (1) of section 79 of Income Tax Ordinance, 2001.

    However, these rules did not apply if the recipient was a non-resident person. This was giving rise to anomalous situations in certain circumstances therefore, non-recognition rules have been extended in cases of disposal of assets between spouses under an agreement to live apart, inheritance and gift from a relative in case of non-residents.

    Sub-section (4A) of section 37 provides valuation of assets received under certain transactions. However, this was manipulated to avoid tax therefore a proviso has been inserted whereby the commissioner has been empowered to undo such a tax avoidance scheme.

    Gifts received from certain persons were made taxable in the hands of recipients. The provision has been broadened to exclude gifts received from relatives from this taxation in line with other provisions. Necessary changes have been made in clause (la) of sub-section (1) of section 39 of the Ordinance.