Author: Mrs. Anjum Shahnawaz

PSX makes all time high volumes of 2.22bn shares as KSE-100 falls by 22 points

KARACHI: The benchmark index KSE-100 index of Pakistan Stock Exchange (PSX) fell by 22 points on Thursday as the market recorded all time high volumes of 2.22 billion shares in a single day.

The Index closed at 46,791 points as against 46,812 points showing a decline of 22 points.

Analysts at Arif Habib Limited said that MSCI rebalancing created excitement today in the market with heavy flows in OGDC, LUCK and TRG which were the key subjects in the changes announced earlier during the month.

Besides, WTL repeated the performance shown yesterday being the volume leader consecutively and helping the market realize total trading volumes of 2217 million shares, the highest ever after posting 1560 million shares yesterday.

Since MSCI orders were mostly MoC, last half an hour caused the index to trade red with a decline of 137 points.

Banking sector kept the index green for most part of the session, with particular interest in HBL and UBL. Among scrips, WTL topped the volumes with 950.1 million shares, followed by HUMNL (172.4 million) and SILK (126.3 million).

Sectors contributing to the performance include Technology (+46p points), Inv Banks (+23 points), Fertilizer (-29 points), Tobacco (-21 points), Autos (-19 points), E&P (-14 points) and Engineering (-13 points).

Volumes increased from 2,220 million shares as against 1,563 million shares (+42 percent DoD). Average traded value also increased by 51 percent to reach US$ 276.7 million as against US$ 183 million.

Stocks that contributed significantly to the volumes include WTL, HUMNL, SILK, BYCO and KEL, which formed 65 percent of total volumes.

Stocks that contributed positively to the index include TRG (+46 points), LUCK (+30 points), HBL (+23 points), DAWH (+17 points) and KTML (+8 points). Stocks that contributed negatively include PAKT (-21 points), FFC (-18 points), MTL (-16 points), MCB (-14 points) and BAFL (-12 points).

May 27, 2021
Pakistan customs assures early disposal of valuation ruling issues

KARACHI: Pakistan Customs has assured business community of early resolution of pending valuation ruling issues on priority basis.

Director General Customs Valuation Ms. Shahnaz Maqbool assured this at a meeting held with members of Pakistan Federation of Chambers of Commerce and Industry (FPCCI), a statement said on Thursday.

According to the statement the FPCCI and Pakistan Customs had agreed in principle to form an advisory committee to resolve issues pertaining to valuation through consultation.

DG Customs Valuation Ms. Shahnaz Maqbool in a meeting held at Federation House agreed with the various recommendations of Shabbir Mansha Churra – Convener, Central Standing Committee on Customs, FPCCI – and his team.

The DG also assured of expeditious disposal of cases pending for many years related to valuation rulings. Former President FPCCI Mian Anjum Nisar; VPs FPCCI Hanif Lakhany and Adeel Siddiqui; Former VP Khurram Ejaz and others were also present on the occasion.

Shabbir Mansha Churra drew the attention of DG Valuation to the growing issues related to valuation rolling; and, said that for strong liaison between FPCCI and Customs, it was necessary to form a Joint Advisory Committee.

The committee will have representatives of the concerned stakeholders/associations; and, their legal and business experts.

Mian Anjum Nisar, Former President FPCCI, pointed out that the business community was facing severe problems due to delays in valuation ruling and because of very old valuation business community have to pay extra charges; although, the valuations have come down due to the reduction in the prices of some items.

But, the business and trade community still have the old rates and it calls for a swift and comprehensive process to update valuation ruling.

FPCCI demands that businesses that are in appeals with customs valuation should be facilitated by the department on priority basis and resolutions offered.

May 27, 2021
Rupee depreciates by six paisas in interbank

KARACHI: The Pak Rupee ended down by six paisas against the dollar on Thursday due to demand for import and corporate payments.

The rupee closed at Rs154.84 to the dollar from previous day’s closing of Rs154.78 in the interbank foreign exchange market.

Currency experts said that the due to improved GDP growth forecast the domestic demand had increased for imported good.

They also attributed the higher demand of the foreign currency to the government decision for not imposing strict lockdown and using alternate ways to prevent coronavirus pandemic.

The experts said that the improved inflows of export receipts and remittances would help the rupee to gain values in coming days.

May 27, 2021
KTBA recommends abolishing alternative corporate tax

KARACHI: Tax practitioners have recommended to abolish alternative corporate tax (ACT) in the budget 2021/2022 as the levy is increasing cost of doing business.

The tax bar in its proposals for the upcoming budget 2021/2022 recommended to abolish the ACT.

As per section 113C of the Income Tax Ordinance, 2001, tax payable by company subject to tax under Division-II Part-I of 1st Schedule or minimum tax shall be higher of corporate tax or ACT.

The tax bar said that it was increasing cost of doing business and regressive taxation.

Therefore, the KTBA proposed that ACT Should be abolished.

There is already a minimum tax regime which imposes tax on the gross turnover U/s. 113, alongside minimum tax regime for supplies, services, under various section of the Ordinance and hence ACT is only increasing the complexity of the computations.

Besides, the KTBA has also recommended to reduce the minimum tax rate.

Currently rate of minimum tax is 1.5% of the turnover. The threshold for turnover in case of individuals and AOPs was decrease from Rs50 million to Rs10 million by the Finance Act, 2016.

It resulted in increased cost of doing business and regressive taxation.

The KTBA proposed that minimum tax on listed companies should be abolished and in case of other cases the rate of minimum tax should be gradually reduced by 0.2 percent annually so that by tax year 2025 the rate shall be reduced up to 0.5 percent. The threshold of turnover should be increase to Rs50 million.

Moreover, minimum tax should also be allowed to be carried forward for adjustment in subsequent year even in case of losses.

The receipts now brought under Minimum Tax (from Final Tax Regime) should be exempted from this minimum tax.

Removal of minimum tax will promote industrialization. Decrease in turnover threshold will result the true declaration of turnover and created hardship for taxpayers, the tax bar added.

May 27, 2021
Finance ministry, IMF meeting to finalize budget proposals

ISLAMABAD: An important meeting of the ministry of finance with representatives of International Monetary Fund (IMF) will be held today evening (Thursday evening) to finalize the recommendations for budget 2021/2022.

Senior officials of the ministry of finance, three representatives, including country head, of IMF and senior officials of Federal Board of Revenue (FBR) will attend the meeting, sources said.

Officials of the IMF will attend the meeting through video link.

The meeting will discuss important points of the budget, which will include salary income tax and sales tax reforms.

The sources said that the meeting would finalize tax slabs for salaried persons.

The IMF had proposed reduction in salary tax slabs from 11 to five. Further the meeting will discuss sales tax incentives and reduced rates.

The sources said that the government would finalize the proposals after discussions with the IMF.

The source said that the government is considering an increase of 10 percent in salaries and pension. This increase would be given through adhoc basis. However, the government is not considering to grant the increase in basic pay scale.

The government has decided to allocate an amount of Rs900 billion for Public Sector Development Program (PSDP). The budget deficit may be curtailed at six percent of the GDP.

In his recent statement, Finance Minister Shaukat Tarin had already made it clear that the government was not in position to take strict measures due to covid pandemic.

May 27, 2021
Bestway Cement announces to set up new plant

KARACHI: Bestway Cement Limited on Thursday announced to setup Greenfield cement plant with a capacity of 7,200 tonnes of clinker per day at Mianwali.

In a notice sent to Pakistan Stock Exchange (PSX), the company stated: “In view of increasing demand for cement in the country, Bestway Cement Limited has decided to set up a Greenfield cement plant with a capacity of 7,200 tonnes of clinker per day near Paikhel, District Mianwali along with 9MW waste heat recovery plant.

“To that end the company has entered into an agreement with Sinoma International Engineering Co., Limited, PR China for EPC.”

All necessary regulatory approvals and financial arrangements have been secured, the company said.

May 27, 2021
FBR urged to reintroduce income tax credit on registered sales

KARACHI: Federal Board of Revenue (FBR) has been urged to reintroduce income tax credit on registered sales in order to provide incentive to documentation of economy and increase the tax base.

Karachi Tax Bar Association (KTBA) in its recommendations for budget 2021/2022 submitted to the FBR proposed the reintroduction of tax credit on registered sales.

The KTBA said that the tax credit would provide incentive for documentation of economy and increase of the tax base a tax credit of 2.5 percent of tax liability was offered to manufacturers given in the year 2009 making 90 percent of their sales to persons registered under the Sales Tax Law.

The tax credit was increased to 3 percent by Finance Act, 2016. However, this Tax credit was deleted by Finance Act, 2017.

Years of efforts to document the economy has been pushed backwards and that too without any warning and rationale.

The KTBA said that the tax credit should be re-introduced. Further this tax credit on 90 percent sales should be extended to persons making 90 percent of purchases from persons registered under the Sales Tax Act, 1990 as well.

It will encourage the much-desired documentation of the economy.

May 27, 2021
FBR directs officials to avoid initiating audit on assumptions

ISLAMABAD: The Federal Board of Revenue (FBR) has directed the officials of Inland Revenue (IR) to avoid opening audit cases merely on surmises and assumptions, sources said on Wednesday.

The FBR issued instructions to all chief commissioners of tax offices regarding proceedings under section 122(5) of Income Tax Ordinance, 2001.

The FBR said that it had received representations suggesting that the field offices were recklessly issuing notices under section 122(5) read with section 122(9) of Income Tax Ordinance, 2001 where purportedly the threshold of ‘definite information’ as defined under section 122(8) was not met.

“It goes without saying that amendment proceedings under section 122(5) of the Ordinance, merely on basis of audit suspicion picked from within the declarations lodged by the taxpayers themselves, is an enforcement travesty and need to abate,” the FBR said.

The scheme of law warrants that a taxpayer must be dealt with precisely as per principle of justice and fair play, it added.

The FBR directed the field formation to adhere with law and due diligence must be ensured in respect of each taxpayer and no case should be opened merely on surmises and assumptions. “All taxpayers must be provided adequate opportunity of being heard, too,” the FBR added.

May 27, 2021
Stock market gains 512 points amid highest ever volumes

KARACHI: The stock market gained 512 points on Wednesday amid the highest ever volumes, analysts said. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) ended at 46,812 points as against previous day’s closing of 46,300 points, showing an increase of 512 points.

The analysts at Arif Habib Limited said that historic day at PSX that saw highest ever trading volumes of 1.560 billion shares, courtesy of WTL which realized trading volume of 706.5 million shares.

Though E&P and Banking sector stocks helped the index maintain the momentum, the real head turners were the Technology and Telecommunication sectors where listed scrips of IT and Media made the sentiment.

WTL, HUMNL, MDTL, PTC, TELE, AVN and UNITY remained in the limelight today. Among scrips, WTL led the table with 706.5 million shares, followed by HUMNL (112.3 million) and UNITY (45.1 million).

Sectors contributing to the performance include Banks (+147 points), Technology (+99 points), E&P (+73 points), Textile (+46 points) and Power (+28 points).

Volumes increased from 677.3 million shares to 1,563 million shares (+131 percent DoD). Average traded value also increased by 21 percent to reach US$ 183.1 million as against US$ 151.8 million.

Stocks that contributed significantly to the volumes include WTL, HUMNL, UNITY, BYCO and PIAA, which formed 60 percent of total volumes.

Stocks that contributed positively to the index include TRG (+72 points), OGDC (+45 points), PPL (+30 points), MCB (+29 points) and BAFL (+28 points). Stocks that contributed negatively include FFC (-22 points), FCCL (-9 points), MLCF (-8 points), EPCL (-5 points) and PAKT (-4 points).

May 26, 2021
Rupee ends down by 41 paisas against dollar

KARACHI:The Pak Rupee fell by 41 paisas against the dollar on Wednesday owing to the high demand for import and corporate payments.

The rupee closed at Rs 154.78 to the dollar from previous day’s closing of Rs 154.37 in the interbank foreign exchange market.

Currency experts said that economic growth forecast had escalated the demand for the domestic demand for import goods.

May 26, 2021