KARACHI: The Pak Rupee fell by 27 paisas against the dollar on Tuesday owing to demand for import and corporate payments.
The rupee ended Rs159.54 to the dollar from previous day’s closing of Rs159.27 in the interbank foreign exchange market.
Currency dealers said that the local currency was under pressure because of oil import bill as international oil prices were increasing.
The dealers said that normalcy returned in the global economies following the launch of coronavirus vaccine.
ISLAMABAD: The recently promulgated Tax Laws (Amendment) Ordinance, 2021 has granted concessions to 4×4 electric motor vehicles on import of units in both Completely Built Up (CBU) and Completely Knocked Down (CKD) conditions.
The federal cabinet recently allowed duty and tax concessions to 4×4 electric vehicles. Earlier the concession was available to two-wheelers and three-wheelers electric vehicles.
The concessions have been allowed to import of 4×4 electric motor vehicles from customs duty, sales tax and income tax.
(a) Following are the categories of 4 wheelers electric vehicles imported in CBUs for which concessional rates have been allowed.
— 25 percent customs duty allowed on imports under Pakistan Customs Tariff (PCT) 8703.8090. The concession is allowed till June 30, 2026.
— Import of 4×4 electric motor vehicles imported under PCT 8703.8090 with condition that the concession shall be admissible till June 30, 2026 on import of electric vehicles 4 wheelers (CBU) per company of the same variant to be assembled or manufactured to the extent of 100 units per company, duly approved / certified by Engineering Development Board (EDB).
The EBD shall monitor compliance with EV Policy 2020 and intimate FBR immediately in case of violation by any manufacturer to stop further clearance at concessional rates.
Following are the categories of 4 wheelers electric vehicles imported in CKDs and specific parts for which concessional rates have been allowed:
| Description of Vehicle & PCT | Description of Imported goods | Rate of Customs Duty | Conditions |
| Electric Vehicles 4 wheelers (PCT Code 703.8090) | (i) EV Specific components for assembly / manufacturer in any kit-form (CKD) | 1% (notwithstanding the rate of customs duty on these items as specified in the First Schedule to the Customs Act, 1969). | The concession shall be admissible to manufacturers of electric vehicles 4-wheelers till 30th June 2026, subject to certification and quota determination by the EDB. |
| (ii) Components for assembly / manufacture in any kit-form Non-Localized parts. | 10% | The concession shall be admissible till 30th June 2026 subject to the conditions mentioned in para 2 of the SRO.656(I)/2006 dated June 22, 2006. | |
| (iii) Components for assembly / manufacture in any kit-form Localized parts. | 25% | The concession shall be admissible till 30th June 2026 subject to the conditions mentioned in para 2 of the SRO.656(I)/2006 dated June 22, 2006. |
In addition to the above, concession on import of CBU chargers with CKD kits for electric vehicles have been extended to 4 wheelers which was previously available for 2 and 3 wheelers.
In sales tax, (a) Local manufacturers / assemblers importing and supplying the electric vehicle of prescribed categories have been allowed exemptions and reduce rates of sales tax which have been tabulated below:
Import of CKD kits for the following electric vehicles (4 wheelers) by local manufacturers till June 30, 2026:
(a) Small cars and SUVs with 50 kwh battery or below; and
(b) Light Commercial Vehicles (LCVs) with 150 kwh battery or below
Following locally manufactured or assembled electric vehicles
(4 wheelers) are subject to one percent of sales tax till June 30, 2026:
(a) Small cars and SUVs with 50 kwh battery or below; and
(b) Light Commercial Vehicles (LCVs) with 150 kwh battery or below
Import of CKD, SUVs and LCVs have also been incentivized by excluding from the ambit of Minimum Value Addition (MVAT) at the time of import.
For that purpose, following classes of vehicles have been added in the exclusion section of
12th Schedule to the Sales Tax Act, 1990:
– Electric vehicles (4 wheelers) CKD kits for small cars or SUVs, with 50 kwh battery or below and Light Commercial Vehicles (LCVs) with 150 kwh battery or below till the 30th day of June 2026.
– Electric vehicles (4 wheelers) small cars or SUVs, with 50 kwh battery or below and Light Commercial Vehicles (LCVs) with 150 kwh battery or below in CBU condition till 30th day of June 2026.
– Electric vehicles (2-3 wheelers and heavy commercial vehicles) in CBU condition till the 30th say of June 2025.
FED is levied on locally manufactured / assembled and imported motor cars, SUVs at the rate of 2.5 percent ad Val. However, there were certain exemptions for rikshaws designed for transportation of persons.
Through the Amendment Ordinance, exemption has also been allowed to 4 wheelers electric vehicles (falling under tariff headings 87.03) up to June 30, 2026.
The reduced rate of 1 percent would now be applicable on import of CKD kits of electric vehicles for small cars or SUVs with 50 kwh battery or below and LCVs with 150 kwh battery or below.
ISLAMABAD: Sportsmen – participating in an international event – have been allowed tax holiday o import of professional and technical apparatus with condition of re-export of those things within stipulated time period.
Sources in Federal Board of Revenue (FBR) on Tuesday said that the exemption from income tax, sales tax and customs duty has been allowed through Tax Laws (Amendment) Ordinance, 2021, which was recently promulgated through presidential order.
Customs duty has been reduced to zero percent on temporary import of professional and technical apparatus or equipment or instruments imported by foreign nationals, experts and athlete etc. participating in an international event (including but not limited to sports events) or under any international arrangement for use solely during such event or arrangement provided:
(a) it is endorsed on the passports of importer.
(b) The goods allowed for temporary admission shall be identified at the time of import and subsequent re-export
The condition of furnishing undertaking or bond by such foreign nationals has been made inapplicable.
Goods temporarily imported into Pakistan by international athletes or sportsmen, which would be subsequently taken back by them within 120 days have been allowed exemption from sales tax as well as income tax at import stage.
ISLAMABAD: A time period for setting up transmission line projects has been extended for four years up to June 30, 2022 in order to allow 10-year tax exemption on profit and gains derived by a taxpayer from such projects.
The amendment has been made to clause 126M of Second Schedule to Income Tax Ordinance, 2001 through Tax Laws (Amendment) Ordinance, 2021.
Earlier, income tax exemption was granted to those projects which were set up on or after June 30, 2018. However, with the amendment the time for setting up projects has been extended up to June 30, 2022.
The text of the clause is:
“(126M) Profits and gains derived by a taxpayer from a transmission line project set up in Pakistan on or after the1st day of July, 2015 for a period of ten years. The exemption under this clause shall apply to such project which is—
(a) owned and managed by a company formed for operating the said project and registered under the Companies Ordinance, 1984 (XLVII of1984), and having its registered office in Pakistan;
(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business; and
(c) owned by a company fifty per cent of whose shares are not held by the Federal Government or Provincial Government or a Local Government or which is not controlled by the Federal Government or a Provincial Government or a Local Government.
ISLAMABAD: The collection of withholding tax on immovable properties has been made final liabilities in case payment made through Roshan Digital Accounts (RDAs).
The changes have been brought through Tax Laws (Amendment) Ordinance, 2021. The Federal Board of Revenue (FBR) posted the ordinance on its website on Monday.
An amendment has been made to Section 236C of the Income Tax Ordinance, 2001, which is related to deduction of withholding tax on sale of immovable properties.
According to the amendment that if the seller or transferor is a non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who had acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan (SBP), the tax collected under the section from such persons shall be final discharge of tax liability in lieu of capital gain taxable under Section 37 earned by the seller or transferor from the property so disposed of.
Similar change has been made in Section 236K of the Income Tax Ordinance, 2001. This section is related to deduction of withholding tax on purchase of immovable property.
According to the amendment that if the buyer or transferee is a non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with the authorized banks in Pakistan under the foreign exchange regulations issued by the SBP, the tax collected under this section from such persons shall be final discharge of tax liability for such buyer or transferee.
According to the SBP, there are two types of accounts offered under Roshan Digital Accounts.
These are:
Foreign Currency Value Account (FCVA)
NRP Rupee Value Account (NRV)
ISLAMABAD: The federal government has decided to keep the prices of petroleum products unchanged for next fortnight.
According to a statement issued on Monday, the government has decided not to change the prices of petroleum products for next fortnight.
The prices as of February 01, 2021 remain effective for the rest of the month.
The government on January 31, 2021 announced raise in petroleum prices. Following prices were increased and effective from February 01, 2021:
The price of petrol has been increased by Rs2.70 per liter to Rs111.90 from previous rate of Rs109.20.
The rate of high speed diesel has been enhanced by Rs2.88 per liter to Rs116.07 from Rs113.19.
The price of kerosene oil has been increased by Rs3.54 per liter to Rs80.19 from Rs76.65.
The rate of light diesel oil has been increased by Rs3.00 per liter to Rs79.23 from Rs76.23.
The new prices of petroleum products are applicable from mid night February 01, 2021.
KARACHI: The stock market gained 567 points on Monday owing to rise in foreign remittances and expectations of better financial results.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 46,375 points as against 45,808 points showing an increase of 567 points.
Analysts at Arif Habib Limited said that the market priced in the positive fundamentals relating to foreign remittances as well as the expectation of better quarterly results of the corporate sector, which has so far posted +60 percent growth.
Cement sector continued uptrend on the prospects of better results, whereas E&P sector benefited from an increase in international crude oil prices.
Selling pressure witnessed last week from institutional and foreign investors subsided in banks and fertilizer sectors that resulted in improved performance across the board.
EFERT declared financial results along with dividend that brought support to the benchmark Index from overall fertilizer sector.
Similarly, HBL & UBL rebounded cautiously during the session, adding contribution to the Index. Among scrips, WTL topped the volumes with 40.3 million shares, followed by MLCF (35.6 million) and TELE (28.7 million).
Sectors contributing to the performance include E&P (+116 points), Technology (+73 points), Cement (+67 points), Pharma (+48 points) and Banks (+46 points).
Volumes increased from 442.7 million shares to 486.4 million shares (+10 percent DoD). Average traded value also increased by 19 percent to reach US$ 155.9 million as against US$ 131.2 million.
Stocks that contributed significantly to the volumes include WTL, MLCF, TELE, ANL and HUMNL, which formed 31 percent of total volumes.
Stocks that contributed positively to the index include OGDC (+54 points), TRG (+45 points), DAWH (+33 points), DGKC (+33 points) and SYS (+30 points).
Stocks that contributed negatively include HUBC (-8 points), FFC (-7 points), NBP (-6 points), KOHC (-6 points) and BAFL (-6 points).
ISLAMABAD: The levy of super tax has been made permanent for banking companies beyond Tax Year 2021, sources in Federal Board of Revenue (FBR) said on Monday.
Tax Laws (Amendment) Ordinance, 2021 has been promulgated on February 12, 2021 after approval by the President of Pakistan.
As per the ordinance the levy of super tax on banks shall continue beyond Tax Year 2021. Through the ordinance the levy shall apply in tax year 2021 and onwards.
With this amendment the banks shall pay the super tax at four percent in subsequent tax years. For the banking companies the tax year 2022 has commenced from January 01, 2021.
The one-time super tax was imposed by inserting Section 4B of Income Tax Ordinance, 2001 through Finance Act, 2015.
The Income Tax Ordinance, 2001 explained the super tax as:
“4B. Super tax for rehabilitation of temporarily displaced persons.― (1) A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 and onwards, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.
(2) For the purposes of this section, “income” shall be the sum of the following:—
(i) profit on debt, dividend, capital gains, brokerage and commission;
(ii) taxable income (other than brought forward depreciation and brought forward business losses) under section (9) of this Ordinance, if not included in clause (i);
(iii) imputable income as defined in clause (28A) of section 2 excluding amounts specified in clause (i); and
(iv) income computed, other than brought forward depreciation, brought forward amortization and brought forward business lossess under Fourth, Fifth, Seventh and Eighth Schedules.
(3) The super tax payable under sub-section (1) shall be paid, collected and deposited on the date and in the manner as specified in sub-section (1) of section 137 and all provisions of Chapter X of the Ordinance shall apply.
(4) Where the super tax is not paid by a person liable to pay it, the Commissioner shall by an order in writing, determine the super tax payable, and shall serve upon the person, a notice of demand specifying the super tax payable and within the time specified under section 137 of the Ordinance.
(5) Where the super tax is not paid by a person liable to pay it, the Commissioner shall recover the super tax payable under subsection (1) and the provisions of Part IV,X, XI and XII of Chapter X and Part I of Chapter XI of the Ordinance shall, so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance.
(6) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.”
In tax year 2018 the rate of super tax was four percent for banking companies on percentage of income and three percent on person other than a banking company, having income equal to or exceeding Rs500 million.
In tax year 2020 the tax rate at 4 percent was maintained for banking companies. However, in other cases it was abolished.
With the new amendment, the banking companies shall continue to pay the super tax with not time frame.
The Pakistani Rupee experienced a depreciation of 45 paisas against the US Dollar on Monday, ending the day at Rs159.27 in the interbank foreign exchange market. This decline comes after a period of consecutive gains, attributed to heightened demand for import and corporate payments.
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KARACHI: The State Bank of Pakistan (SBP) on Monday eased condition for availing loan for housing loan by allowing personal guarantee.
The SBP said that currently applicants face difficulties in obtaining housing finance, especially for low cost housing, as banks are reluctant to take the risk of the house not being completed or documentation completion.
The completion of housing unit and mortgage creation takes time. In order to address this issue for applicants and banks, the SBP has allowed acceptance of a third party guarantee for this period up to a maximum of one year.
With the aim to facilitate the banks in extending low cost housing finance, SBP has allowed them to accept personal guarantee of third party until the housing unit is completed and the mortgage is perfected.
The guarantee will remain valid for a maximum period of one year. This step will help promote home ownership of potential borrowers wishing to avail housing finance under Government Markup Subsidy Scheme issued by State Bank of Pakistan on October 12, 2020.
Third party guarantee will cover the period from the disbursement of loan to the time when construction is completed and risk coverage becomes available by Pakistan Mortgage Refinance Company. Acceptance of third party personal guarantee will provide additional comfort to banks for extending low cost housing finance, an area in which banks have keen interest for its business potential.
It is expected that with this move, banks will increase their efforts to ensure that the benefits of the markup subsidy scheme reach marginalized segments of the society who currently do not own a house.