Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Tax exemption to LNG Terminals costs Rs732 million

    Tax exemption to LNG Terminals costs Rs732 million

    ISLAMABAD: Federal Board of Revenue (FBR) has granted exemption of Rs732 million to LNG Terminal Operators and Terminal Owners during tax year 2020.

    According to official documents made available to PkRevenue.com, the FBR allowed the exemption to two taxpayers engaged in LNG Terminal Operators and Terminal Owners.

    The exemption is available from total income under Clause 141 of Part 1 of Second Schedule, Income Tax Ordinance, 2001.

    The FBR said that profit and gains derived by LNG Terminal Operators and Terminal Owners are exempt under the income tax laws.

  • Agha Steel’s IPO receives overwhelming response

    Agha Steel’s IPO receives overwhelming response

    KARACHI: The Initial Public Offering (IPO) of Agha Steel has received overwhelming response from investors as it was oversubscribed at the book building phase on Wednesday.

    The IPO received an overwhelming response from institutional investors and high net worth individuals as the strike price clocked in at Rs32 per share, higher than the floor price of Rs30, a statement said.

    The book-building phase of the Initial Public Offer (IPO) of Agha Steel concluded with investors oversubscribing it by as much as 1.63 times.

    This means Agha Steel is going to raise Rs3.8 billion in total, making it the largest IPO in the steel sector and the second-largest IPO in the private sector.

    Brokers and investment advisory firms had issued almost unanimous calls to ‘subscribe,’ which resulted in investor demand amounting to Rs4.4 billion against the IPO’s book-building size of Rs2.7 billion.

    The general public will subscribe to the remaining 30 million shares (25 percent of the total offer size) on Oct 14-15 at the strike price of Rs32.

    The company will use IPO proceeds to finance the expansion of its re-rolling capacity from 250,000 metric tons to 650,000 MT. It will increase the reinforcing bar production capacity by 160 per cent.

    Brokerage houses anticipate steady growth in the company’s bottom line owing to a substantial rise in construction activities across the country. The main product of Agha Steel is reinforcing bars that are used in the construction of megastructures, roads, bridges, skyscrapers and homes.

    In a research report last week, AL Habib Capital Markets stated that it expected the share price of Agha Steel to hover around Rs57 by June 2022. The target prices stated by Pearl Securities and KASB Securities are Rs50 and Rs42, respectively.

    In a message on social media, Agha Steel CEO Hussain Iqbal Agha expressed his gratitude to investors and their historic overwhelming response. He vowed to ensure growth of their shareholders’ equity.

  • FBR not to ask source of money invested for housing projects by December 31: MTO Chief

    FBR not to ask source of money invested for housing projects by December 31: MTO Chief

    KARACHI: Federal Board of Revenue (FBR) will not ask source of money to be invested till December 31, 2020 in a new housing projects, Abdul Hameed Memon, Chief Commissioner, Inland Revenue, Medium Taxpayers Office (MTO) said on Wednesday.

    “This is a unique program announced by the Prime Minister of Pakistan. The tax rates have also been reduced under this package,” he said while addressing an event organized by Association of Builders and Developers (ABAD).

    However, he said that those who availed the scheme will require to complete the project by September 2022.

    He urged the ABAD members to avail the opportunity as growth in the construction sector would generate employment.

    He said that the government through amendment in tax laws had announced the package for the construction sector. “The package has two types of benefits: immunity from questioning the source of investment; and reduced rate of income tax in the shape of a fixed tax regime for builders and developers.”

    The chief commissioner said that the package would help in enhancing activities in the construction sector and result in significant economic growth.

    Earlier, Abdul Hafeez, Commissioner Inland Revenue, MTO gave a detailed presentation to builders and developers on the immunity from Section 111 of Income Tax Ordinance, 2001. This section attracts penal action for persons who conceal assets from tax authorities.

    The commissioner said that the section 111 would not apply to an individual if the person deposited the money in a new bank account up to December 31, 2020 or having ownership / title of the land invested as on April 17, 2020.

    In case of a company or an Association of Persons (AOP), the section shall not apply if a single purpose company or AOP is registered between April 17, 2020 and December 31, 2020.

    The commissioner outlined other exemptions and benefits under the tax package as the investors would have exemption from the requirement of withholding tax on purchase of building material except cement and steel.

    They will also have exemption from the requirement of withholding tax on acquisition of services relating to construction except those from companies.

    The persons, who are engaged in low cost housing projects, will be granted 90 percent reduction in fixed tax liability, the commissioner said.

    Besides, dividends paid by builder or developer companies shall not be liable to tax and there shall be no withholding on the payment of these dividends, he added.

    Chairman Association of Builders and Developers of Pakistan (ABAD) Fayyaz Ilyas has demanded of the Federal Government to extend date of registration for Incentive Package of Naya Pakistan Housing Scheme upto 31st December 2021 and also extend time period for the completion of housing projects under this scheme.

  • Stock market rebounds with 723 points on buying activities

    Stock market rebounds with 723 points on buying activities

    KARACHI: The stock market rebounded on Wednesday and gained 723 points as significant buying activities seen during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 39,850 points as against 39,127 points showing an increase of 723 points.

    Analysts at Arif Habib Limited said that the market finally made a positive move today, which was jittery in the beginning but solidified by mid-day to post a total gain of 793 points and closing the index +723 points.

    Buying activity was observed across the board but had major impact on Cement sector, especially DGKC and LUCK. SBP’s notification to transfer Federal government related deposits in part from commercial banking system to SBP caused selling pressure in BOP and NBP.

    A number of mid-cap stocks (usually traded in high volumes) like UNITY, TRG and HASCOL traded at and near upper circuits in the later part of the session.

    The rebound in Index is among other reasons also attributed to adjustment / settlement of CGT lately demanded by NCCPL from Investors which had negative impact on investor sentiment. Among scrips, HASCOL topped the volumes with 59.7 million shares, followed by UNITY (34.5 million) and TRG (23.9 million).

    Sectors contributing to the performance include Cement (+133 points), Pharma (+74 points), O&GMCs (+66 points), Technology (+65 points) and Banks (+58 points).

    Volumes increased from 406 million shares to 432.0 million shares (+6 percent DoD). Average traded value also increased by 9 percent to reach US$ 82.5 million as against US$ 75.4 million.

    Stocks that contributed significantly to the volumes include HASCOL, UNITY, TRG, FFL and POWER, which formed 36 percent of total volumes.

    Stocks that contributed positively to the index include LUCK (+46 points), SEARL (+39 points), TRG (+32 points), ENGRO (+32 points) and MCB (+27 points). Stocks that contributed negatively include NBP (-16 points), PMPK (-7 points), HGFA (-4 points), FFC (-4 points) and HMB (-3 points).

  • Karachi Chamber resents FBR’s decision to install surveillance cameras

    Karachi Chamber resents FBR’s decision to install surveillance cameras

    The Karachi Chamber of Commerce and Industry (KCCI) has expressed strong discontent over the recent decision by Federal Board of Revenue (FBR) to monitor production activities through cameras directly connected to the main tax database.

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  • Dollar weakens to Rs163.97

    Dollar weakens to Rs163.97

    KARACHI: The US dollar on Wednesday weakened against the Pak Rupee to Rs163.97 as sufficient supply was seen in the currency market.

    The rupee gained six paisas to close at Rs163.97 to the dollar from previous day’s closing of Rs164.03 in interbank foreign exchange market.

    Currency experts said that the market witnessed sufficient supply of the foreign currency to meet demand for import and corporate payments.

    They said that the sentiments were remained positive in the market due to escalating economic activities.

    The experts said that the exports registered 18.24 percent growth to $1.873 billion during September 2020 as compared with $1.58 billion in August 2020.

    They hoped that present positivity in the market would help the local unit to make gain further against the greenback.

  • SBP issues carrot, stick policy for banks on housing loan targets

    SBP issues carrot, stick policy for banks on housing loan targets

    KARACHI: The State Bank of Pakistan (SBP) has adopted a policy of carrot and stick for banks related to mandatory targets for housing/construction financing.

    (more…)
  • Teachers, researchers avail Rs2.42 billion income tax exemption

    Teachers, researchers avail Rs2.42 billion income tax exemption

    ISLAMABAD: Teachers and researchers have availed tax exemption to the tune of Rs2.42 billion on their income during Tax Year 2020, official sources said on Tuesday.

    Under Clause 1(2) of Part 3 of the Second Schedule of Income Tax Ordinance, 2001, full time teachers or researchers are entitled for reduction in tax liability since 2006 and there is no sunset clause attached to this concession.

    The FBR said that the tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25 percent of tax payable on his income from salary.

    Data of teachers is taken from Pakistan Bureau of Statistics (PBS) website, for the following categories of teachers: Arts/Science colleges, professional colleges, universities, secondary vocational institutions. Teachers in secondary schools have not been considered, being relatively less paid.

    Latest available data is for year 2017. For 2018, an 8 percent multiplier on number of teachers is used keeping in view increase in number of teachers over past years.

    Average annual salaries for different categories of teachers have been taken as following:

    – Arts/Science College: Rs. 900,000

    – Professional College: Rs. 1,200,000

    – University: Rs. 2,400,000

    – Secondary vocational institutions: Rs. 1,800,000

    Separate data for researchers is not available, the FBR said.

    The FBR said that approximate 133,255 teachers and researchers had availed the tax concession.

  • FBR estimates Rs69.5 billion annual tax loss on agriculture income

    FBR estimates Rs69.5 billion annual tax loss on agriculture income

    ISLAMABAD: Federal Board of Revenue (FBR) has estimated an amount of Rs69.5 billion annual loss of tax on agriculture income, sources said on Tuesday.

    In a report the FBR said that agricultural income is exempt from income tax under section 41 of the Income Tax Ordinance, 2001.

    However, it falls under the provincial domain as per the Constitution of Pakistan, and the provinces have the mandate to levy tax on agricultural incomes.

    The provincial collection of income tax on agricultural income for FY 2018 is as under:

    Punjab: Rs 913 million
    Sindh: Rs559 million
    KP: Rs100 million
    Balochistan: Rs17 million
    Total: Rs1.589 billion

    The FBR carried out an estimate on the basis of agriculture census 2010 in order to measure the actual potential of revenue from agriculture.

    The key assumption in this estimation is that the average income per acre earned by farmer has been taken at Rs. 50,000, keeping in view current year’s average price levels of commodities.

    Farm sizes have been categorized as per column 2 of the table below. Farms smaller than 7.5 acres have not been consid¬ered, being of subsistence income level.

    Income for each farm size (column 5) is estimated by multiplying cultivated area (acres) for each category with average income per acre (Rs50,000). If statutory slab-wise tax rates are applied on average income per farm for the six categories of farm sizes, the estimated revenue forgone due to this exemption comes to Rs69.5 billion annually.