The Federal Board of Revenue (FBR) is set to gain direct access to transaction information of members, brokers, and investors within Pakistan’s equity market.
(more…)Author: Mrs. Anjum Shahnawaz
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Foreign investment drops by 72 percent in first half
KARACHI: The inflow of foreign investment into Pakistan has dropped by 72 percent during first half (July – December) of fiscal year 2020/2021 due to outflows from debt securities and equity market.
The total foreign investment fell to $514.5 million during first half of the current fiscal year as compared with $1.83 billion in the corresponding half of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.
Foreign private investment – the major component of total foreign investment into the country – fell by 48.5 percent during the first half of the current fiscal year. The foreign private investment declined to $708 million during July – December 2020/2021 as compared with $1.37 billion in the corresponding period of the last fiscal year.
The total foreign direct investment (FDI) fell by 30 percent to $953 million during the half under review as compared with $1.35 billion in the corresponding half of the last fiscal year.
The investment in capital market witnessed outflow of $244 million during the first half of the current fiscal year as compared with inflow of $18.8 million in the same half of the last fiscal year.
The investment in debt securities also witnessed outflow of $194 million during July – December 2020/2021 as compared with inflow of $452 million during the same period of the last fiscal year.
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Finance minister directs monitoring consumer price of sugar
ISLAMABAD: Dr. Abdul Hafeez Sheikh, Federal Minister for Finance and Revenue, has directed authorities to monitor consumer price of sugar through the country besides focusing on stocks and supply position of the commodity.
The finance minister chaired the meeting of the National Price Monitoring Committee (NPMC) on Monday.
The finance minister directed ministry of industries and production to continuously monitor stocks of sugar, its supply position in the market and prices throughout the country for the consumers.
Minister for National Food Security & Research Syed Fakhar Imam, Federal Minister for Industries and Production Hammad Azhar, Adviser to the PM on Commerce Abdul Razak Dawood, SAPM on Revenue Dr. Waqar Masood, Provincial Chief Secretaries, Secretary M/o Industries and Production, Additional Secretary M/o NFS&R, Additional Secretary Ministry of Planning, Development and Special Initiatives, Chairman FBR, Member CCP, Chairman TCP, MD USC, Member IT/HRM & Member National Accounts from PBS and senior officers of the Finance Division participated in the meeting.
The National Price Monitoring Committee (NPMC) reviewed the price trend of essential commodities especially wheat, sugar and edible oil during the week.
Finance Secretary briefed the meeting that weekly SPI registered a decline of 0.22 percent and the main drivers behind decrease in SPI are falling prices of eggs, tomatoes, potatoes, onions and chicken. Prices of 21 basic items remained stable whereas 07 items registered a decline during the week.
The ministry of National Food Security and Research (NFS&R) apprised NPMC that all stakeholders are on board with reference to existing position of wheat stock in the country.
The Federal Minister for National Food Security and Research assured all possible measures would be taken to ensure smooth supply of wheat across the country.
The Finance Minister directed the provincial governments to follow a self-sustaining model and streamline daily release of wheat to ensure steady supply in the provinces as well as districts.
The Federal Minister for Industries and Production Hammad Azhar updated NPMC about the recent decline in international prices of palm oil which will eventually reduce the upward pressure on the prices of edible oil in the domestic market.
Member PBS updated NPMC about the benefits of recently developed dashboard of prices of essential items and progress on its implementation in coordination with the provinces.
The NPMC directed PBS to provide necessary support to the provinces to make the system fully functional for vigilant monitoring of prices of essential commodities and to remove price disparity across the country.
The Finance Minister directed M/o NFS&R to chalk out a comprehensive strategy to ensure smooth supply of wheat flour at reasonable rates for the general public.
He also urged the provincial governments to continue taking necessary steps to ensure provision of basic items at affordable prices across the country.
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Share market ends down by 204 points amid selling pressure
KARACHI: The Pakistan Stock Exchange (PSX) experienced a downturn on Monday, with the share market closing lower by 204 points as selling pressure dominated trading activities throughout the day.
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Rupee falls by 19 paisas on import payment demand
KARACHI: The Pak Rupee fell by 19 paisas against the dollar on Monday owing to demand for import and corporate payments, dealers said.
The rupee ended Rs160.52 to the dollar form last day’s closing on of Rs160.33 in the interbank foreign exchange market.
The dealers said that the rupee weakened owing to dollar demand for import and corporate payments. They said that the demand was seen because the market opened after two weekly holidays.
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FBR chairman visits Karachi to boost revenue collection
ISLAMABAD: The Chairman of Federal Board of Revenue (FBR) Muhammad Javed Ghani to hold meetings with senior officials of Inland Revenue and Pakistan Customs on Monday January 18, 2021 to discuss measures to boost revenue collection during second half of the current fiscal year.
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Import of CKD motor vehicles witnesses unprecedented growth
ISLAMABAD: The import of motor vehicles in Completely Knock Down (CKD) condition has witnessed a unprecedented growth of 4902 percent in December 2020 due to acceleration of manufacturing activities by auto industry in the country.
According to Pakistan Bureau of Statistics (PBS), the import of motor vehicles in CKD/Semi Knock Down (SKD) condition increased to $107 million in December 2020 as compared with meagre $2.14 in the same month of the last year.
The country’s car industry witnessed significant downfall during the last year due economic slowdown and adverse impact of coronavirus.
The economy during the first half of the last year had witnessed consolidation and shown improvement in early 2020. However, the coronavirus which detected in last months of 2019 in China adversely affected the world as well as domestic economy.
The car manufacturing in the country has witnessed growth during the first half of the current fiscal year. However, the pace of manufacturing grew at a faster pace in the last months of the first half of the current fiscal year.
The car production is major component of Large Scale Manufacturing (LSM) as this industry grew by 1.97 percent in November 2020 over the corresponding month of the last year.
Meanwhile, car sales, as reported by PAMA, increased by 15 percent YoY in December 2020 to 13,870 units.
The same, including Lucky Motor Corporation (KIA, non-member of PAMA), is up by 20 percent YoY.
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Adjustment of expenses allowed against property income
ISLAMABAD: The Federal Board of Revenue (FBR) has said that adjustment of expenses on property income has been allowed if a taxpayer opted to pay income tax under the head of individual income.
Sources in FBR said that through Finance Act, 2016, a dual tax treatment was introduced for property income of individuals/A0Ps and companies.
Individuals and AOPs had to pay fixed amount of tax on gross rentals at the rates specified in Division VIA of Part-I of First Schedule.
However, certain deductions were allowable for computing property income in case of a company.
A new sub-section (7) was added to Section 15A through Finance Act, 2019 to enable Individuals/A0Ps to opt for normal tax regime and claim deductions against gross rentals as provided in the law.
But that option was available only to those individuals and AOPs who derived income from property in excess of Rs.4 million.
The Finance Act, 2020 has removed this condition by making amendment in sub-section 7 of section 15A.
Now all individuals/A0Ps are allowed to claim deductions against gross rental income if they opt to pay tax at rates given in Divisions I of Part-I of First schedule to the Ordinance.
Furthermore, deduction in respect of administration and collection charges under clause (h) of Section 15A has been reduced from 6% to 4% of the rent chargeable to tax.
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Transfer of foreign assets required to be declared in annual return
ISLAMABAD: A person makes transaction or transfer of foreign assets during a tax year is required to declare the same in annual return.
Officials in the Federal Board of Revenue (FBR) said that according to Income Tax Ordinance, 2001 a person having foreign assets or foreign income is required to file annual return of income and wealth statement.
The law also makes mandatory for the person to declare any foreign assets transferred to any other person during the tax year and the consideration for the said transfer.
Section 116A of the Income Tax Ordinance, 2001 explains the return filing requirement for a person having foreign income and assets statement.
Section 116A. Foreign income and assets statement.
(1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—
(a) the person’s total foreign assets and liabilities as on the last day of the tax year;
(b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and
(c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.
(2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.
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Committee may recommend reduction in withholding tax provisions
ISLAMABAD: A committee constituted to simplify taxation procedures may recommend a reduction in the number of withholding tax provisions and measures for enhancing the revenue collection.
Sources in the Federal Board of Revenue (FBR) said that a technical committee was constituted on September 17, 2020, for simplification of all taxation procedures.
They said that the committee likely to submit its recommendations during next month for incorporation into the budget.
The committee was assigned to propose measures to reduce the dependence on withholding taxes, minimum tax, advance tax, etc.
According to the terms of reference (TOR), the committee would identify distortion, anomalies, and inequalities in the taxation system which cause difficulties for taxpayers, or discourage investment, industrialization, and documentation, and propose solutions.
Further, the committee is also required to propose measures for simplification of all taxation procedures, in a manner that does not compromise revenue collection and documentation.
The committee is also required to propose measures for improvement in the temporary importation and manufacturing bond schemes in order to enhance their scope and facilitate direct and indirect exporters throughout the value chain.
The committee has been asked to propose remedies for issues relating to adjustment of input tax paid against services subjected to sales tax by the provinces.
Meanwhile, the committee shall also identify issues hindering the smooth processing of refund claims through the FASTER system.