Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday recommended to present restructuring plan of Pakistan International Airlines Corporation Limited (PIACL) before the federal cabinet after reconciliation of tax liabilities.

    Sources in Large Taxpayers Office (LTO) Karachi said that billions of rupee as tax liability was pending against the PIACL.

    Federal Minister for Finance, Revenue, Industries and Production, Muhammad Hammad Azhar, chaired the meeting of the ECC.

    After detailed consultation, the ECC recommended the restructuring plan of PIACL for onward submission before the Cabinet, after reconciliation of tax liability figures, with a direction to place a cap on future debt which PIACL could take against its improved balance sheet, once restructuring plan is implemented.

    Earlier, the Aviation Division submitted a summary before the ECC regarding restructuring plan of the Pakistan International Airlines Corporation Ltd (PIACL).

    The Adviser to the Prime Minister for Institutional Reforms and Austerity made a detailed presentation on human resource and operational restructuring of the PIACL.

    He drew attention to the various options for restructuring and outlined measures to minimize losses and transform PIACL into a financially viable entity.

    It included human resource restructuring through Voluntary Separation Scheme (VSS), hiring Aviation experts, fleet modernization, routes rationalization, product development and revenue enhancement measures.

    Power Division presented a summary for a one-time grant to GENCOs for onward payment to DISCOs regarding the actuarial value of pension and pensionary benefits of surplus employees and also taking over the liability for payment of pension to existing pensioners of power plants which are decided to be closed immediately by the Cabinet Committee on Energy (CCOE).

    After seeking detailed input from relevant stakeholders, the Committee directed the Power Division to deliberate further and present options for cost optimization regarding pension liabilities.

    The Following Technical Supplementary Grants were approved by the ECC: –

    • Rs.330 million for the Ministry of Defence for the maintenance of aircrafts.

    • Rs.2382 million for the Ministry of Federal Education and Professional Training for the Prime Minister’s Special Package to implement “Skill for All” strategy for TVET sector.

    • Rs.1 billion for the Finance Division to refund the balance amount of funds of Insaf Imdad Ehsas Program.

    • Rs.382.280 million for the Ministry of Energy for completion of development schemes of Sindh and Balochistan provinces under PSDP.

    • Rs.150 million for the Ministry of Housing and Works for funding civil works on different schemes in Balochistan, under PSDP.

    • Rs.30 million for the Board of Investment for different operational expenses.

    • Rs.280 million for the Ministry of Information Technology and Telecommunications for consultancy and implementation of Internet voting (I-voting).

    Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Omar Ayub Khan, Federal Minister for Privatization Muhammad Mian Soomro, Minister for National Food Security and Research Syed Fakhar Imam, Advisor to the Prime Minister for Institutional Reforms and Austerity Dr. Ishrat Hussain, Advisor to the Prime Minister for Commerce Abdul Razzak Dawood, SAPM on Power Tabish Gauhar, SAPM on Revenue Dr. Waqar Masood, Federal Secretaries, Governor State Bank of Pakistan Reza Baqir, Chairman BOI and other senior officials participated in the meeting.

  • KSE-100 falls by 451 points on selling pressure

    KSE-100 falls by 451 points on selling pressure

    KARACHI: The benchmark KSE-100 index fell by 451 points on Wednesday owing to selling pressure witnessed during the day.

    The index closed at 43,954 points as against previous day’s closing of 44,404 points showing a decline of 451 points.

    Analysts at Arif Habib Limited said that the KSE-100 benchmark index lost 647 points during the session after posting an intra-day gain of 930 points.

    Banks, E&P, Fertilizer sectors remained under selling pressure whereas Tech and Refinery sector stocks saw mixed reaction from Investors.

    Different factors were at play that brought negative sentiment including anticipation of mute growth in financial sector results and decline in international crude oil prices.

    Cement sector performed well earlier in the session, however, change of overall sentiment brought cement stocks down as well. Among scrips, TRG led the table with 38.3 million shares, followed by DSL (30.3 million) and ANL (22.9 million).

    Sectors contributing to the performance include Banks (-183 points), E&P (-103 points), Fertilizer (-98 points), Autos (-37 points) and Power (-31 points).

    Volumes increased slightly from 305.9 million shares to 371 million shares (+21 percent DoD). Average traded value also increased by 26 percent to reach US$ 132.8 million as against US$ 105.2 million.

    Stocks that contributed significantly to the volumes include TRG, DSL, ANL, GGL and TELE, which formed 33 percent of total volumes.

    Stocks that contributed positively to the index include LUCK (+39 points), AICL (+15 points), TRG (+12 points), EFUG (+11 points) and ISL (+11 points). Stocks that contributed negatively include HBL (-55 points), ENGRO (-52 points), BAHL (-46 points), OGDC (-44 points) and FFC (-35 points).

  • CDC, NIFT sign agreement to enable digital payments for mutual fund investors

    CDC, NIFT sign agreement to enable digital payments for mutual fund investors

    KARACHI: Central Depository Company (CDC) and National Institutional Facilitation Technologies (NIFT) have signed an agreement to enable digital payments through NIFT ePay.

    The collaboration will enable the investors to use NIFT ePay services for investing into Mutual Funds using CDC’s digital platform” “Emlaak Financials”. Furthermore, the solution will also be facilitating CDC’s IAS account holders to make IAS payments through CDC Access portal, a statement said on Wednesday.

    Central Depository Company (CDC) is recognized as the infrastructure backbone of Pakistan’s Capital Market and it is the sole securities depository in the country, while NIFT is one of the largest payment processors in Pakistan. Central Depository Company (CDC) and National Institutional Facilitation Technologies (NIFT) signed an agreement to enable digital payments through NIFT ePay.

    The agreement was signed by Haider Wahab CEO – NIFT and Badiuddin Akber CEO –  CDC at the head office of Central Depository Company (CDC).

    Haider Wahab CEO, NIFT stated, “We are delighted to be a part of CDC’s newly launched initiative for the Mutual Fund Industry. We understand that the “Emlaak Financials” platform has an aspiring roadmap, and we look forward to playing our role in enabling the platform and in making this service a success. NIFT will always focus to partner for unique and innovative ideas which will uplift the digital transformation in Pakistan.”

    At the signing ceremony, Badiuddin Akber – CEO, CDC said, “As we embark on this collaboration with NIFT, it gives us immense pride that we are engaging NIFT’s payment gateway for the first of its kind mutual fund aggregator platform being launched in the financial landscape of Pakistan. The launch of this platform and its integration with NIFT’s services to enable secure and swift payments for mutual fund investors is in-line with CDC’s vision of enhancing efficiency and ease of doing business.”

  • Rupee gains 15 paisas on lower import payment demand

    Rupee gains 15 paisas on lower import payment demand

    KARACHI: The Pak Rupee gained 15 paisas against the dollar on Wednesday owing to lower demand for import payment.

    The rupee ended Rs153.18 to the dollar from previous day’s closing of Rs153.33 in the interbank foreign exchange market.

    Currency dealers said that importers were cautious in placing orders for foreign purchases due to rising cases of coronavirus.

    They further said that the inflows of export receipts, workers’ remittances and improved foreign exchange reserves also helped the rupee to make gain.

  • FBR collects Rs24 billion on purchases of immovable properties

    FBR collects Rs24 billion on purchases of immovable properties

    ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs24 billion as withholding tax on purchase of immovable properties during tax year 2020.

    According to collection statistics for tax year 2020 released by the FBR on Tuesday revealed the withholding tax collection on purchase of immovable properties increased to Rs24 billion as compared with Rs13.50 billion in the preceding fiscal year, showing an increase of 78 percent.

    The collection of withholding tax on purchase of immovable properties is made under Section 236K of the Income Tax Ordinance, 2001.

    Prior to Finance Act, 2019, the withholding tax rate was at zero percent where value of immovable property was up to Rs4 million. While, withholding tax at two percent for income tax return filer was to be collected where the value of immovable property is more than Rs4 million. However, at this value of immovable properties the withholding tax for non-filers was prescribed at 4 percent.

    However, through Finance Act, 2019 the withholding tax rate was amended to one percent on fair market value of the immovable properties purchased during tax year 2020 and onwards in case the purchase is on the Active Taxpayers List (ATL).

    The rate of withholding tax in case person is not on the ATL is 2 percent.

    The withholding tax was imposed on purchase of immovable properties under Section 236K was introduced through Finance Act, 2014 in order to encourage income tax return filing.

    According to the Section 236K of Income Tax Ordinance, 2001, any person responsible for registering, recording or attesting transfer of any immovable property shall collect withholding tax at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee.

    It further said that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.

  • FBR removes additional customs duty on import of auto disable syringes

    FBR removes additional customs duty on import of auto disable syringes

    ISLAMABAD: Federal Board of Revenue (FBR) has removed additional customs duty on import of auto disable syringes with or without needles.

    The FBR issued SRO 367(I)/2021 dated March 30, 2021 and amended the SRO 572(I)/2020 dated June 30, 2020.

    According to the latest notification the additional customs duty shall not be collected on the import of auto disable syringes with or without needles under PCT codes 9018.3110, 9018.3120 up to June 30, 2021.

    Similarly, the additional customs duty is also not leviable on import of tubular metal needles under PCT code 9018.3200 and rubber gaskets under PCT 4016.9310 imported by sales tax registered manufacturers of auto disable syringes up to June 30, 2021.

    Prior to this through Tax Laws (Second Amendment) Ordinance, 2021, the import of auto disable syringes with or without needles were allowed sales tax exemption.

    Similarly, import of raw materials for the manufacturers of auto disable syringes including tubular metal needles and rubber gaskets were allowed sales tax exemption.

  • Tax collection from cash withdrawals falls by 52 percent in Tax Year 2020

    Tax collection from cash withdrawals falls by 52 percent in Tax Year 2020

    ISLAMABAD: The income tax collection on cash withdrawal from banking system fell by around 52 percent during tax year 2020 following return filers allowed tax free transactions.

    According to statistics released by the Federal Board of Revenue (FBR) the collection of income tax under Section 231A of Income Tax Ordinance, 2001 was at Rs15.17 billion as compared with Rs31.75 billion in the preceding tax year.

    Prior to March 2019 the person filing income tax return and were on the Active Taxpayers List (ATL) were liable to pay 0.3 percent on cash withdrawal above Rs50,000 in a day from banking system. Meanwhile, the persons not on the ATL were required to pay 0.6 percent on the cash withdrawal above Rs50,000 in a day.

    However, through Finance Supplementary (Second Amendment) Act, 2019 amendment was made to Section 231A Income Tax Ordinance, 2001 and persons on the ATL were exempt from paying 0.3 percent income tax on making cash withdrawal above Rs50,000.

    The levy of withholding income tax on cash withdrawal was introduced through Finance Act, 2005. Initially the tax was payable on withdrawal of above Rs25,000 per day. But through Finance Act, 2012 the limit was increased to Rs50,000.

    According to Section 231A of the Income Tax Ordinance, 2001 every banking company shall deduct tax, if the payment for cash withdrawal, or the sum total of the payment for cash withdrawal in a day, exceeds fifty thousand rupees.

    The FBR clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.

  • Harmonizing general sales tax top priority: Hammad Azhar

    Harmonizing general sales tax top priority: Hammad Azhar

    ISLAMABAD: Federal Minister for Finance, Revenue, Industries and Production, Mohammad Hammad Azhar on Tuesday said that harmonization of general sales tax is priority area of the government.

    Hammad Azhar, held a virtual meeting with Hartwig Schafer, Vice President South Asia Region, World Bank Group at the Finance Division.

    The federal and provincial tax authorities are working out procedures for its smooth implementation, the finance minister added.

    He expressed firm resolve of the government in implementing reforms under ongoing World Bank projects and thanked the Vice President for their continued guidance and collaboration.

    The Finance Minister reiterated that the government is fully committed to implementing structural reforms, protecting social spending and boosting social safety nets in order to protect the vulnerable segments of the society.

    Federal Minister for Economic Affairs Division Makhdoom Khusro Bakhtiar, Federal Minister for Energy Omar Ayub Khan, SAPM on Power Tabish Gauhar, Governor State Bank of Pakistan Reza Baqir, Secretary Finance Division, Secretary Power Division, Secretary EAD, Chairman FBR and senior officials participated in the meeting.

    The finance minister appreciated the pivotal role being played by the World Bank in strengthening governance and service delivery through institutional reforms in Pakistan over the years.

    The Federal Minister for Energy and SAPM on Power outlined the steps being taken to streamline the power sector, improving service delivery and serving the larger interest of electricity consumers.

    They emphasized that the government is fully committed to make power sector dynamic and more sustainable.

    The Federal Minister for Economic Affairs Division (EAD) lauded the World Bank’s IDA financing for the Crisis-Resilient Social Protection (CRISP) and other projects on the occasion.

    The Vice President, World Bank appreciated the government’s relief initiatives to curtail the impact of COVID-19 pandemic effectively. The Vice President reiterated the World Bank’s continuous support to the Government of Pakistan during testing times.

    The World Bank also acknowledged that a lot of progress has been made on implementation of structural reforms in various sectors. There is a need to keep up the momentum once the health crisis abates, he added.

  • Stock market gains 857 points on massive buying activities

    Stock market gains 857 points on massive buying activities

    KARACHI: The stock market registered a gain of 857 points on Tuesday amid across the board buying activities during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,405 points as against previous day’s closing of 43,548 points, showing an increase of 857 points.

    Analysts at Arif Habib Limited said that the market made a strong come back today by adding a total of 930 points during the session and ending the session +857 points.

    Tech & Refinery sectors contributed to change of sentiment, which hit lower circuits yesterday and rebounded today. After yesterday’s dismal performance, the total leverage dropped to Rs. 33 billion with significant reduction in leverage levels of Tech & Refinery sectors stocks in recent time, thereby giving some breathing space to the Investors.

    Besides, buying activity was observed across the board with consistent performance from Fertilizer sector, but saw rebound in E&P, O&GMCs and Cement sector stocks. Among scrips, TRG topped the volumes with 20.6 million shares, followed by NETSOL (19.2 million) and UNITY (16.4 million).

    Sectors contributing to the performance include Cement (+165 points), Technology (+137 points), Banks (+97 points), E&P (+53 points) and Power (+53 points).

    Volumes increased slightly from 302.8 million shares to 306.0 million shares (+1 percent DoD). Average traded value increased by 20 percent to reach US$ 105.1 million as against US$ 87.5 million.

    Stocks that contributed significantly to the volumes include TRG, NETSOL, UNITY, ANL and BYCO, which formed 29 percent of total volumes.

    Stocks that contributed positively to the index include TRG (+103 points), LUCK (+66 points), HUBC (+41 points), HBL (+32 points) and SYS (+27 points). Stocks that contributed negatively include BAFL (-4 points), EFUG (-3 points), AKBL (-2 points), INDU (-2 points) and ATLH (-1 points).

  • Rupee strengthens by 33 paisas on lower import payment demand

    Rupee strengthens by 33 paisas on lower import payment demand

    KARACHI: The Pak Rupee strengthened by 33 paisas against the dollar on Tuesday owing to decline in international oil prices and lower import payment demand after fast spread of coronavirus.

    The rupee ended Rs153.33 to the dollar from previous day’s closing of Rs153.66 in the interbank foreign exchange market.

    Currency experts said that demand for the foreign currency was eased following decline in international oil prices and lackluster response from the importers following rise in cases of coronavirus.