Author: Mrs. Anjum Shahnawaz

Joint bank account of pensioners prohibited

KARACHI: The finance division has barred opening of joint account for disbursement of pension amount.

The State Bank of Pakistan (SBP) on Monday circulated instructions issued by the Finance Division regarding the payment of pension through bank accounts.

The central bank pointed out BC&CPD Circular Letter No. 01 dated January 18, 2016, regarding Standard Operating Procedures (SOPs) for DCS issued by Finance Division, Government of Pakistan vide letter No. 12(9)-Reg. 6/2012.pt1453 dated January 05, 2016.

In order to bring transparency and ease in the pension payment process, the government through letter No. 12(9)-Reg. 6/2012 dated January 06, 2021, has made the following amendments into the SOPs for DCS with immediate effect:-

Pensioner shall be required to undergo biometric verification from any branch of a bank maintaining his/ her pension account, every year in March and September. If the pensioner is unable to undergo biometric verification due to incapacitation by bodily illness, infirmity, or if his/ her fingerprints do not exist due to old age or a genetic condition, he/she will provide a life certificate as per the SOPs.

In case of family pension, Non-Marriage declaration as required under para 4 and 9(xiii) of SOPs shall be obtained from pensioners on or before 30th September of each year instead of March and September.

Submission of above mentioned Non-Marriage declaration will be dispensed with after the widow/ daughter/ sister of the pensioner (family pension recipient) attains the age of sixty years.

If a pensioner fails to submit a life certificate or fails to undergo biometric verification during March and September or a pensioner does not draw a pension for consecutive six months, the account shall become dormant.

The requirement of submission of indemnity bond by a pensioner, as laid down in para 3(f) and 9(xii) of the SOPs is discontinued.

In continuation to the above instructions, the following clarifications have also been issued by Finance Division:

The Pension shall be paid through a bank account either current or PLS maintained in the pensioner’s name.

A pension account shall not be a joint account.

A bank account dedicated to pension transactions only shall not be mandatory for the pension.

All banks are advised to disseminate the instructions widely to branches and ensure compliance in letter and spirit. Any violation of the instructions would be dealt with under the relevant provisions of the Banking Companies Ordinance, 1962.

February 1, 2021
Stock market slips by 137 points on profit booking

KARACHI: The stock market slipped by 137 points on Monday owing to profit booking during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 46,248 points as last Friday’s closing against 46,385 points showing a decline of 137 points.

Analysts at Arif Habib Limited said that the market retested a high towards 47k level today and again met profit booking around 46,700 level, bringing down the Index by 137 points.

During the session, the index oscillated +377 points and -197 points. Refinery, Fertilizer and Chemical sectors remained in the limelight, with buying activity, whereas Banks, E&P, O&GMCs and Cement sector stocks saw profit booking.

Cement sector contributed to the initial surge in Index; however, selling pressure brought the stock prices below respective LDCPs. Among scrips, PRL topped the volumes with 81.5 million shares, followed by KEL (65.1 million) and PIBTL (62 million).

Sectors contributing to the performance include Cement (-85 points), Banks (-74 points), Technology (-51 points), Engineering (-24 points), O&GMCs (-18 points), Fertilizer (+36 points) and Autos (+27 points).

Volumes declined from 840.2 million shares to 693.6 million shares (-18 percent DoD). Average traded value also declined by 6 percent to reach US$ 190.6 million as against US$ 203.4 million.

Stocks that contributed significantly to the volumes include PRL, KEL, PIBTL, HASCOL and TRG, which formed 40 percent of total volumes.

Stocks that contributed positively to the index include ENGRO (+38 points), MTL (+18 points), SEARL (+17 points), ATRL (+14 points) and MARI (+14 points). Stocks that contributed negatively include TRG (-58 points), LUCK (-46 points), UBL (-19 points), HBL (-16 points) and ANL (-15 points).

February 1, 2021
Rupee ends down by 12 paisas on higher payment demand

KARACHI: The Pak Rupee ended down by 12 paisas against the dollar on Monday owing to higher demand of the foreign currency against import and corporate payments as market opened after two weekly holidays.

The rupee ended Rs160.22 to the dollar from last Friday’s closing of Rs160.10 in the interbank foreign exchange market.

The currency dealers said that higher demand was witnessed during the day as market was opened after two weekly holidays.

They however said that the improved economic indicators would help the local currency to gain value.

February 1, 2021
NSS: tax rate at 10% on profit subject to furnishing certificate

ISLAMABAD: Persons deriving profit less than Rs500,000 on national saving schemes are required to provide a certificate in order to get reduced income tax rate at 10 percent, official sources said.

Officials at Central Directorate of National Savings (CDNS) said that at present the rate of income tax on profit from national savings scheme is 15 percent. However, the rate shall be 10 percent in case annual profit is up to Rs500,000 if a person receiving the profit provide a certificate that his return on saving schemes shall not be above the threshold.

They said that the rate of tax shall be 15 percent in case the annual profit is above 15 percent if the profit is above Rs500,000 in the said schemes. However, the rate at 15 percent is available only to persons on the Active Taxpayers List (ATL). In other case where person is not on the ATL the tax rate shall be 30 percent.

The sources said that the CDNS had circulated information about the amendments to the Income Tax Ordinance, 2001 through a letter issued early this fiscal year to all zonal heads and other concerned stakeholders.

Through Finance Act, 2020, an amendment introduced to Section 151 of Income Tax Ordinance, 2001 which related to profit on debt.

Section 151 (1)(a) explained that yield on profit (profit on debt) on account, deposit or a certificate under the National Saving Schemes or Post Office Savings Account, the rate of tax shall be 10 percent of the gross yield/profit paid on amount up to Rs500,000.

The rate of tax exceeding Rs500,000 shall be 15 percent of the gross yield / profit paid. The rate of tax on persons not appearing in the ATL, the applicable tax rate is be increased by 100 percent.

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February 1, 2021
Petrol price increased to Rs111.90 per liter

The government has announced an increase in the prices of petrol and other petroleum products, citing rising international oil prices as a key factor.
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January 31, 2021
FBR issues 1.4 million notices for not filing returns, concealing income

ISLAMABAD: Federal Board of Revenue (FBR) has issued around 1.4 million notices to non-filers of income tax returns and those who concealed income in their declaration, a statement said on Saturday.
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January 31, 2021
FY21 tax target requires Rs2,393 billion or 53.4 percent growth in next five months

ISLAMABAD: Federal Board of Revenue (FBR) needs to collect an amount of Rs2,393 billion during next five months of fiscal year 2020/2021 (FY21) to achieve the annual target of Rs4,963 billion.

According to provisional revenue figures released on Saturday, the FBR collected Rs2,570 billion during July – January 2020/2021 as compared with Rs2,416 billion in the corresponding period of the last fiscal year, showing an increase of 6.4 percent.

In order to achieve the revenue collection target the FBR required to maintain 53.4 percent growth in revenue collection during remaining months of the current fiscal year. The FBR collected Rs1,560 billion during February – June of the last fiscal year. However, the revenue body needs Rs2,393 billion in the remaining five months of the current fiscal year.

It is worth mentioning that the revenue collection was adversely affected during March – June 2020/2021 due to spread of coronavirus in the same period. This has cost around Rs500 billion to the revenue collection.

The net collection for the month of January was Rs.364 billion against a target of Rs340 billion, representing an increase of 12.3 percent over last January and 107 percent of the target. This is the first double-digit monthly growth during the fiscal year.

On the other hand, the gross collections increased from Rs.2464 billion to Rs.2699 billion, showing an increase of nearly 10 percent.

The amount of refunds was Rs129 billion compared to Rs69 billion paid last year, showing an increase of 87 percent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity issues of the industry.

The improved revenue performance is a reflection of growing economic activities in the country despite facing the challenge of second wave of COVID-19. Going forward, it is expected that this revenue performance would be further strengthened as economic recovery gains more momentum.

January 31, 2021
FBR initiates action against non-filer corporate taxpayers

ISLAMABAD: Federal Board of Revenue (FBR) on Saturday directed tax offices to ensure recovery of penalty amount from corporate taxpayers, who failed to file income tax returns by due date.

The last date for filing income tax returns for tax year 2020 was December 31, 2020. However, the FBR said that a large number of companies had failed to comply with the mandatory requirement.

The revenue body said that the data obtained from PRAL in respect of non-filer companies, which are filers for tax year 2019, goes to reveal that not only that they have not filed tax returns but also that a considerable amount of revenue has not been paid by these taxpayers.

It may be noticed that notices u/s 182 of the Income Tax Ordinance, 2001 were issued to all non-filers currently by the FBR Head Office.

All Chief Commissioners of Inland Revenue (CCIRs) have been directed to monitor progress of penalty progress proceedings particularly in company cases and make sure enforcement of returns and also to realize due revenue. Formation-wise lists of such cases have been sent through email to all concerned.

The FBR directed all the CCIRs to share the progress on enforcement measures in recovery of penal amount and payment of outstanding dues by February 15, 2021.

January 30, 2021
Tax offices directed to issue penalty notices to sugar mills for not complying VAS

ISLAMABAD: Federal Board of Revenue (FBR) has directed tax offices to issue penalty notices to sugar mills, which have failed to install video analytics system, sources said on Saturday.

The FBR directed Chief Commissioners of LTO, MTO, CTO of Karachi, Lahore and RTO Peshawar to issue penalty notices to non-compliant sugar mills which have not followed FBR guidelines.

The FBR also decided to launch stern action from next week against sugar mills and suppliers of video analytics system (VAS), who failed to comply with the mandatory requirement under the law.

“The FBR will take action by imposing heavy penalties on non-compliant sugar mills and non-compliant vendors if they fail to install the video analytic equipment at their factory premises by January 31, 2021,” according to a notice sent to vendors of VAS.

The notice has been sent to all the pre-qualified vendors, included: M/s. AJCL (Pvt) Ltd., M/s. TPL Trekker, M/s. CNS Engineering & Technology, M/s. NRTC and GCS, M/s. COMMTEL, M/s. DWP Technologies and M/s. Focus Technology Pvt Ltd.

The FBR said that it had authorized seven vendors through its report on November 20, 2020 for VAS and the copy was shared with Pakistan Sugar Mills Association (PSMA) and all pre-qualified vendors to initiate the process.

In order to ensure the implementation of VAS, the FBR issued a letter on December 02, 2020 directing the PSMA to provide mill wise update status of deployment of VAS by December 31, 2020, which was further extended up to January 31, 2021.

“In response to the letters only few sugar mills have issued final quotations to the vendors for installation of the system. However, large number of sugar mills is not willing to implement the system as they have either issued provisional quotations or not issued any quotation at all the process of VAS.”

The FBR observed that the pre-qualified vendors had failed to install the video analytics equipment on the sugar mills, which had issued final quotations to the pre-qualified vendors for the system.

It is pertinent to mention that the Video Analytics Rules, 2020 were issued through SRO 889(I)/2020 dated September 21, 2020. These clearly laid down responsibilities of the manufacturer to provide unhindered availability of production facilities for installation of the system.

Besides, Rule 150ZQT(2) of the rules provides severe penalty of non-removal goods from business premises by non-compliant manufacturing units.

January 30, 2021
Weekly Review: corporate profitability may keep market in green

KARACHI: The stock market may move in green owing to ongoing result season, whereby corporate profitability appears strong.
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January 30, 2021