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Author: Mrs. Anjum Shahnawaz

  • FPCCI urges following coronavirus SOPs to avert industrial halt

    FPCCI urges following coronavirus SOPs to avert industrial halt

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday urged trade and industry to follow SOPs related to coronavirus in order to avert complete halt of industrial and economic activities.

    FPCCI’s ruling group BMP Chairman Mian Anjum Nisar has asked the traders to strictly follow the government’s SOPs in markets for curbing the spread of deadly coronavirus and averting halt of the industrial wheel.

    Moreover, there is also need to speed up vaccination process, especially for the industry workers in the country, for the smooth operation of trade and industry, he added.

    “The businessmen themselves have to ensure a strict implementation of the standard operating procedures in markets and commercial areas in order to curb the spread of Covid-19 pandemic,” he said and warned that the third wave of coronavirus had spread to dangerous levels and the situation demanded that the business community play a role in strict compliance with the SOPs in business areas to control further Covid-19 infections.

    Mian Anjum Nisar stressed that a reduction in coronavirus cases would help the government to consider easing restrictions on businesses, as it would cause great losses to trade activities, render thousands of daily-wage workers and other workers jobless, making the lives more miserable, fuel a further increase in inflation besides badly impacting the economy.

    He said that during the third wave of coronavirus the situation has been deteriorating mainly due to lack of implementation of COVID-19 standard operating procedures and the solution lies in speeding up our vaccination programs, instead of opting for closure of trade and industry amidst GDP growth of just 1.5 percent. He said that in view of combating the coronavirus situation the government can impose smart lockdown where required, as complete lockdown would halt industry.

    The FPCCI former president pointed out that due to the previous lockdowns, Pakistan’s economy had suffered a loss of billions of dollars while millions of workers lost their jobs. Pakistan’s economy suffered negative growth last fiscal year for the first time in the history due to Covid-19, he said, adding that the best way to save the economy and businesses from more losses is to follow the SOPs.

    He observed that the complete lockdowns had created havoc globally, as the countries, which were providing loans had also came under debts while Pakistan is already facing financial crunch due to huge burden of debts. So, complete lockdown is not a good option, he added.

    He observed that the government will have to make visible reduction in taxes in the budget to help revive the businesses, which are near to bankruptcies owing to slowdown amidst coronavirus.

    He asked the government to take concrete steps to attract foreign investment, saving the livelihood of millions of workers associated with various sectors, as foreign investment in Pakistan’s long-term projects like power plants and oil and gas exploration.

    The BMP Chairman said that with a view to save the economy from the impacts of the slowdown due to the COVID-19 the government should announce special incentives for a cash-strapped SMEs, which represents more than 90 percent of around 3.2 million business enterprises in Pakistan, contributing 40 percent to the GDP, employing more than 80 percent of non-agricultural workforce, and generating 25 percent of export earnings.

    He expressed dissatisfaction over the financial packages by the government for the businesses to deal with the financial crunch, called for a significant cut in import duties and waiver of sales tax, income tax and additional income taxes, for the smooth running of trade and industry.

    He asked the government to expedite the process of vaccination and supply ample quantity of doses not only to the whole public but also to the trade and industry.

    Mian Anjum Nisar said that rising mortality in the midst of the third Covid-19 wave and growing anxiety in the business circles over possible restrictions on international travel and trade necessitate ramping up the pace of vaccination.

    To speed up inoculations, the government will need to bridge vaccine supply gaps with active participation from the federating units and the private sector, he added.

  • April inflation records double digit increase

    April inflation records double digit increase

    Pakistan’s headline inflation, based on the Consumer Price Index (CPI), witnessed a notable increase of 11.10 percent on a year-on-year (YoY) basis in April 2021, according to data released by the Pakistan Bureau of Statistics (PBS).

    (more…)
  • Weekly Review: Corona restriction may put pressure on market

    Weekly Review: Corona restriction may put pressure on market

    KARACHI: A possible strict lockdown due to rise in coronavirus cases in the country may put pressure on the stock market during next week.

    Analysts at Arif Habib Limited said that the National Command and Operation Center (NCOC) had instructed stricter restrictions and shorter working hours, while a complete lockdown is still a possibility.

    This could potentially continue to add pressure to the market next week.

    The ongoing third wave of the novel coronavirus is likely to keep sentiment under pressure, while in addition to a strong results season (particularly cyclical sectors) we may see the market react on a positive note in the upcoming week.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.6x (2021) compared to Asia Pac regional average of 16.0x while offering a dividend yield of ~7.4 percent versus ~2.6 percent offered by the region.

    The week commenced on a positive note on Monday due to heavy investment from a major fund. For the remainder of the week the index was under pressure due to rise in the infection ratio, lockdowns in certain areas of the country and reduced business timings.

    Finally, a discussion of a possible complete lockdown is still on the cards which added extra pressure to the index. On a positive note inflows to foreign exchange through the Roshan Digital Account (RDA) crossed the USD 1bn this week, while the Current Account posted a nominal deficit of USD 47 million for March 2021. The KSE-100 Index closed the week at 44,262 points, declining 445 points WoW.

    Sector-wise negative contributions came from i) Technology & Communication (110) ii) Cement (95), iii) Tobacco (555 points), iv) Engineering (49 points) and v) Automobile Assembler (43 points).

    Whereas sectors that contributed positively include i) Textile Composite (25 points), and ii) Chemical (16 points). Scrip-wise negative contributors were TRG (82 points), MCB (65 points), PAKT (55 points), NBP (39 points) and INIL (31 points) while positive contributors included HBL (48 points), BAHL (36 points), FFC (34 points), COLG (31 points) and UBL (24 points).

    Foreign selling this week clocking-in at USD 13.1 million compared to a net buy of USD 7.3 million last week. Selling was witnessed in Commercial Banks (USD 4.8 million) and Technology and Communication (USD 1.5 million).

    On the domestic front, major buying was reported by Other Organization (USD 16.1 million) and Mutual Funds (USD 13.4 million). Average volumes arrived at 331 million shares (down by 0.5 percent WoW) while average value traded settled at USD 110 million (up by 14 percent WoW).

  • Shaukat Tarin assures FPCCI of taking on board before making economic decisions

    Shaukat Tarin assures FPCCI of taking on board before making economic decisions

    ISLAMABAD: Finance Minister Shukat Tarin on Friday assured the representatives of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to have a regular interaction.

    He also affirmed that all key stakeholders would be taken on board before making important economic decisions.

    The finance minister held a meeting with the FPCCI members through a video link. Adviser to the PM on Commerce Abdul Razak Dawood, SAPM on Finance and Revenue Dr. Waqar Masood, Chairman FBR and other senior officers participated in the meeting.

    While addressing the meeting, the Finance Minister briefed the participants about the economic priorities of the Government.

    He also outlined that the Government is adhering to strict financial discipline for achieving macro-economic stability and enhancing revenue generation.

    The Minister also outlined that Pakistan’s economy is showing signs of recovery amid Coronavirus pandemic, with construction and manufacturing sectors in lead. However, the third wave of COVID-19 is particularly challenging, he added.

    The Minister also stressed the role of Chambers of Commerce and Industry as a bridge between the Government and the traders for active coordination and welcomed suggestions from the members of FPCCI on the occasion.

    The representatives of FPCCI felicitated the Finance Minister on assuming new responsibilities and discussed the matters related to sales tax harmonization and rationalization of taxes.

    In his concluding remarks, the Finance Minister stated that the suggestions presented during the meeting would be accorded due consideration.

  • Prices of petroleum products kept unchanged

    Prices of petroleum products kept unchanged

    ISLAMABAD: The federal government on Friday decided not to increase the prices of petroleum products during next fortnight in order to provide relief to the consumers during the holy month of Ramazan.

    A statement said that in line with the vision of the Prime Minister to provide relief to the consumers in the holy month of Ramazan, the government has decided not to increase the prices of the petroleum products.

    The implementation of this proposal requires an adjustment in the rates of petroleum levy on all petroleum products and a reduction in sales tax as well in case of kerosene oil and light diesel oil.

    It is pertinent to mention that the government was not charging any Petroleum Levy (PL) on Kerosene and light diesel oil.

    The cumulative revenue impact of the decision will be Rs. 4.8 billion.

    The prices of petroleum products w.e.f May 01, 2021 are as follows:

    MS Petrol Rs.108.56/liter

    High Speed Diesel Rs. 110.76/liter

    Kerosene oil Rs. 80.00/liter

    Light Diesel Oil Rs. 77.65/liter

  • FBR promotes IRS officers to BS-19

    FBR promotes IRS officers to BS-19

    ISLAMABAD: Federal Board of Revenue (FBR) has promoted officers of Inland Revenue Service (IRS) to BS-19 on regular basis with immediate effect.

    The FBR promoted following BS-18 IRS officers to BS-19 on regular basis:

    1. Zeeshan Asif

    2. Ms. Amina Batool

    3. Syed Mashkoor Ali

    4. Shahzad Ali Khan

    5. Ms. Kiran Maqsood

    6. Muhammad Imran

    7. Soban Ahmad

    8. Ms. Hira Nazir

    9. Muhammad Asif

    10. Tanvir Hussain Bhatti

    11. Ms. Nafeesa Bano

    12. Sami Ullah Khan

    13. Zulfiqar Ali

    14. Abid Hussain Gulshan

    15. Mohammad Hayat Khan

    16. Shoukat Ali

    17. Sohail Ahmad

    18. Rao Shahzad Akhter Ali Khan

    19. Ch. Murtaza Ali Akbar

    20. Syed Hasan Sardar

    21. Ms. Sana Aslam Janjua

    The FBR said that the officers, if drawing performance allowance prior to issuance of this notification, will continue to draw the same after regular promotion to BS-19.

    The officers, already working in BS-19 on acting charge basis or on OPS basis as Additional Commissioner / Additional Director / Secretary FBR (HQ), Islamabad shall actualize promotion at their present place of posting.

    For actualization of promotion in

    BS-19 on regular basis of the remaining officers, separate orders shall be issued.

  • SHC declares income tax on undistributed profits as unconstitutional

    SHC declares income tax on undistributed profits as unconstitutional

    KARACHI: Sindh High Court (SHC) on Friday declared levy of tax on undistributed profits under Section 5A of Income Tax Ordinance, 2001 as unconstitutional and set aside all the show cause notices and demand notices issued by the tax authorities under the section.

    A division bench of the SHC ordered in Sapphire Textile Mills Limited vs Federation of Pakistan & Others: “insertion of Section 5A in the Income Tax Ordinance, 2001, including amendments theretho from time to time, does not fall within the parameters delineated per Article 73 of the constitution of Pakistan, 1973, hence, the provision impugned is found to be ultra vires of the constitution, and is hereby struck down.”

    It ordered further that as a consequence, any show cause / demand notices or constituents thereof, seeking enforcement of Section 5A of the Income Tax Ordinance, 2001, are hereby set aside.

    A large number of taxpayers filed petition before the higher court seeking relief against action initiated by Federal Board of Revenue (FBR).

    The petitioners challenged the Section 5A of the Income Tax Ordinance, 2001, which was initially inserted in the Ordinance through Finance Act, 2015 and amended through Finance Act, 2017, ostensibly in order to induce certain public companies to distribute dividends among their shareholders.

    In original form, as inserted through Finance Act, 2015, the tax was levied upon the reserves of a company. However, post Finance Act, 2017 the levy befell upon accounting profit before tax of a company.

    The petitioners requested the court to declare the provision as unconstitutional. The plain reading of Section 5A suggests that it amounts to double taxation, as income received or taxed in the same hand ceases to be income.

    It is submitted: “the regulation of companies is undertaken inter alia vide the Companies Act, 2017, being special in nature, and any attempt at such regulation by inserting penal provisions into the Ordinance routed through a money bill, was prima facie unmerited.”

    Counsel for the respondents submitted: “5A did not amount to double taxation as it contemplated an independent levy.”

    It was argued that 5A identified a class to be taxed, hence, could not be considered discriminatory.

    It was concluded that the legislature had ample power to regulate economic behavior and 5A was merely one specie of exercise of such power.

    The court observed that 5A of the Ordinance amounts to legislation, not contemplated in the Constitution to be undertaken vide a money bill. “In such a scenario no rationale has been articulated before us to justify the regulation of companies behavior, pertaining to dividends, to be effected vide a money bill, within the mandate of Article 73 of the Constitution, while abjuring the regular legislative process.

    “Therefore, it is our deliberated view that section 5A of Income Tax Ordinance, 2001 cannot be sustained on the constitutional anvil; hence, could not be construed to have legal effect.”

  • Karamatullah Khan posted as Director General Intelligence and Investigation

    Karamatullah Khan posted as Director General Intelligence and Investigation

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday transferred and posted Karamatullah Khan, a BS-21 officer of Inland Revenue Service (IRS), as Director General, Directorate General of Intelligence and Investigation (IR), Islamabad.

    Karamatullah Khan has been transferred from the post of Chief Commissioner, Regional Tax Office, Faisalabad.

    Shaban Bhatti (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue, Regional Tax Office, Islamabad from the post of Directorate General, (SPR&S) Federal Board of Revenue (HQ), Islamabad.

    Mehmood Hussain Jafri, a BS-21 officer of IRS, has been transferred and posted as Chief Commissioner Inland Revenue, Regional Tax Office, Faisalabad from the post of Chief Commissioner, Regional Tax Office, Sargodha. The officer has also been assigned the additional charge of the post of Chief Commissioner – IR, Regional Tax Office, Sargodha for a period of three months under the rules.

  • SBP directs banks to provide tracking numbers against housing loan applications

    SBP directs banks to provide tracking numbers against housing loan applications

    KARACHI: State Bank of Pakistan (SBP) has taken notice of delayed processing of housing loans by banks and issued directives in this regard to ensure speedy process of applications.

    The central bank on Friday said that it was receiving a number of complaints especially regarding delayed processing, long turnaround time and no mechanism to track the financing application after submission.

    In this regard, banks/DFIs are directed to take the following measures:

    a. Immediately start providing to the applicants a receipt with unique tracking number against each housing finance application. Meanwhile, banks/DFIs are advised to put in place within 30 days from the date of this Circular an online e-tracking mechanism and a phone based help line to provide, on query of applicant, status and expected time required for decision on application.

    b. Devise a system to monitor 30 days Turn Around Time (TAT) for decision on applications received.

    c. Record and convey reasons of rejection of housing finance application to the applicant in simple and clear form.

    d. Equip the branch officials, through trainings and alignment of systems and procedures, to perform initial scrutiny and inform the customer about missing requirements/documents at the time of submission of application.

    e. Conduct rigorous trainings of branch officials to enhance their knowledge on G-MSS and improve their behavior towards customers.

    f. Conduct capacity building of call center officials to adequately address queries of customers.

    It has also been observed that complaints lodged on State Bank complaint portal remain pending with banks for unduly long times.

    The banks/ DFIs are advised to adopt appropriate measures to resolve complaints in timely manner.

    Moreover, policy for designation of focal person for State Bank complaint portal must be reviewed and it should be ensured that at least one focal person is present in each region to handle the complaints.

    Furthermore, potential borrowers under G-MSS have complained about exorbitant processing charges. Accordingly, banks/DFIs are advised to review and rationalize their processing fee for financing considering their actual costs and provide breakup of these charges to the applicants at the time of receipt of applications.

    In order to increase prospects of applicants to avail housing finance under G-MSS, banks/DFIs are advised to guide the applicants regarding the options of 100 percent clubbing of income of up to four co-applicants and enhancing their credit worthiness through third party guarantee as allowed vide IH&SMEFD Circular No. 01 of 2021.

  • KSE-100 index loses 601 points on selling pressure

    KSE-100 index loses 601 points on selling pressure

    KARACHI: The equity market ended down by 601 points on Friday owing to selling pressure witnessed across the board during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,262 points as against 44,863 points, showing a decline of 601 points.

    Analysts at Arif Habib Limtied said that end of roll-over week had a painful impact on market, causing the index to tumble 711 points during the session and closing -601 points.

    Leveraged stocks, NETSOL, TRG and UNITY which had significant outstanding balance in the DFC open interest created negative sentiment, despite TRG declaring good results with a hefty payout.

    NETSOL, on the other hand, posted negative earnings for the quarter. Resultantly, NETSOL hit lower circuit.

    Besides, selling pressure was observed across the board with UBL contributing to loss on points table among banking sector stocks with the exception of HBL that maintained level above LDCP.

    Among scrips, GGL topped the volumes with 34.8 million shares, followed by TRG (25.9 million) and TELE (22.4 million).

    Sectors contributing to the performance include Technology (-133 points), Cement (-60 points), E&P (-50 points), O&GMCs (-46 points) and Banks (-42 points).

    Volumes increased from 280.6 million shares to 293.7 million shares (+4 percent DoD). Average traded value also increased by 1 percent to reach US$ 89.6 million as against US$ 88.6 million.

    Stocks that contributed significantly to the volumes include GGL, TRG, TELE, WTL and HASCOL, which formed 37 percent of total volumes.

    Stocks that contributed positively to the index include BAHL (+19 points), HBL (+14 points), SCBPL (+6 points), SHFA (+6 points) and AGP (+5 points). Stocks that contributed negatively include TRG (-105 points), HUBC (-30 points), SYS (-28 points), NBP (-24 points) and NRL (-23 points).