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Author: Mrs. Anjum Shahnawaz

  • Kharlachi allowed export route for Afghanistan

    Kharlachi allowed export route for Afghanistan

    ISLAMABAD: Kharlachi border has been added to the list of borders for exports of goods from Pakistan to Afghanistan.

    The ministry of commerce on Monday issued SRO 1103(I)/2020 to make amendment into Export Policy Order 2020.

    After the amendment the export to Afghanistan and through Afghanistan to Central Asian Republics shall be allowed through export land routes i.e. Torkhan, Chaman and Ghulam Khan and Qamar Uddin Karez, Kharlachi.

    According to news reports, the Kharlachi border crossing in Kurram tribal district was reopened in July 2020 to trade with Afghanistan after remaining closed for four months.

    The border crossing was closed for bilateral trade after the outbreak of Covid-19.

    The formal trade was begun with Afghanistan through Kharlachi crossing, which was the nearest point with Kabul.

  • Rate of income tax on brokerage, commission

    Rate of income tax on brokerage, commission

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of income tax on brokerage and commission to be applicable for tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated rate of tax for deduction or collection brokerage and commission under Section 233 of Income Tax Ordinance, 2001 shall be as set out in the following table:

    S.No.PersonRate of Tax
    (1)(2)(3)
    1.Advertising Agents10%
    2.Life Insurance Agents where commission received is less than Rs.0.5 million per annum8%
    3.Persons not covered in 1 and 2 above12%

    Following is Section 233 under which the tax is applicable on brokerage and commission:

    233. Brokerage and commission. — (1) Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, a company or an association of persons constituted by, or under any law (hereinafter called the “principal”) to a person (hereinafter called the “agent”), the principal shall deduct advance tax at the rate specified in Division II of Part IV of the First Schedule from such payment.

    (2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.

    (2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account of commission to an advertising agent, directly or through electronic or print media, the principal shall deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section 153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the First Schedule on the amount equal to-

    A X 15/85

    Where A = amount paid or to be paid to electronic or print media for advertising services (excluding commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.

    (2B) Tax deducted under sub-section (2A) shall be minimum tax on the income of the advertising agent.

    (3) Where any tax is required to be collected from a person under sub-section (1), such tax shall be the minimum tax on the income of such persons.

  • SBP revises mechanism for valuation, repatriation of disinvestment proceeds

    SBP revises mechanism for valuation, repatriation of disinvestment proceeds

    KARACHI: In order to further streamline the process of remittance of disinvestment proceeds, State Bank of Pakistan (SBP) has decided to further delegate the authority to banks of resident companies for remittance of disinvestment proceeds to non-resident investors, a statement said on Monday.

    The SBP invited the attention of the Authorized Dealers (ADs) or banks is to the instructions contained in Para 7(vii), Chapter 20 of Foreign Exchange Manual in terms of which designated Authorized Dealer is allowed for remittance of disinvestment proceeds not exceeding the market value (in case of listed securities)/ break-up value (in case of unlisted securities) favoring the non-residents.

    Accordingly, the above referred Para of Chapter-20 ibid has been replaced as follows:

    “Subject to observance of the procedure outlined above, the companies issuing/registering transfer of shares in favour of non-residents on repatriation basis, may export the share certificates through the designated Authorized Dealer to the shareholders. The designated Authorized Dealer shall also allow remittances in respect of the following:-

    (i) Dividend, net of applicable taxes, as permitted under Chapter 14.

    (ii) Disinvestment proceeds, less brokerage / commission and taxes, as under:

    A. For disinvestment proceeds not exceeding the market value (in case of listed securities)/ break-up value (in case of unlisted securities), the designated Authorized Dealer shall allow the remittance on submission and review of:

    a) Name and address of the non-resident share holder.

    b) Name and address of the company whose shares were sold by the non-resident beneficiary, indicating whether it is a listed or unlisted/private limited company and is covered under para 6 ibid. (This requirement may be waived by the Authorized Dealer in case of quoted shares).

    c) Name, address and residential status of the buyer of the shares in question.

    d) Copy of broker’s memo in case of quoted shares/break-up value certificate of a QCR rated practicing Chartered Accountant in case of unlisted shares.

    e) Attested copy of executed Share Purchase Agreement (enforceable at law) between resident buyer and non-resident seller, showing rupee value of shares purchased.

    f) Attested copy of latest audited financials of the company whose shares were being sold.

    g) Duly filled/ signed M-Form for the rupee value of the remittance in favor of non-resident.

    h) An undertaking from the buyer that the transaction is not between related parties. In case the transaction is between related parties, an undertaking that the same has been concluded at an arms-length basis.

    i) Authorized Dealer will ensure due diligence of the transaction/ buyer from AML/ CFT perspective.

    B. For disinvestment proceeds exceeding the market value (in case of listed securities)/ break-up value (in case of unlisted securities), the designated Authorized Dealer shall allow the remittance after satisfying itself about the genuineness of the transaction by reviewing the following additional documents:

    a) Detailed justifications/ rationale/ basis of setting the transaction price per share, from the buyer, in original.

    b) Attested copy of detailed valuation/ transaction due diligence by the buyer showing basis, methodology and key valuation metrics used for valuation of shares as per generally accepted best practices for valuation of shares.

    c) In case the total remittance of disinvestment proceeds exceeds US Dollar 50 million (or equivalent in other currencies) during a span of six months, the applicant, in addition to above information/ documents, shall also submit an independent/ third party review of the buyer’s valuation, from QCR rated practicing chartered accountant as per the latest generally accepted valuation techniques/ methods for a particular type of industry in which resident company is operating. The review report should at least provide view on the appropriateness of the basis and methodology used in the valuation/ transaction due diligence. Further, the review report should also include local/ global comparable transactions and/or trading multiples of comparable publicly traded companies and key valuation metric(s) comparisons, if available.”

    4. Authorized Dealers are advised to bring the above instructions to the knowledge of all their constituents for meticulous compliance.

  • Ms. Sethi appointed as chief pay, pension commission

    Ms. Sethi appointed as chief pay, pension commission

    ISLAMABAD: The government has appointed M.s Nargis Sethi as chairperson of the pay and pension commission with immediate effect.

    A notification issued dated October 15, 2020 by the Finance Division stated that the Prime Minister had appointed Ms. Nargis Sethi, former federal secretary, as chairperson of the pay and pension commission with immediate effect.

    Abdul Wajid Rana has regretted to continue as the chairman of the pay and pension commission, it added.

  • ECC decides to propose increase in wheat support price to Rs1600

    ECC decides to propose increase in wheat support price to Rs1600

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday decided to propose the federal cabinet to enhance support price of wheat to Rs1600 for the crop 2020-2021.

    It was briefed to the ECC that was chaired by Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue that the support price mechanism plays a pivotal role in boosting wheat production as it stabilizes market and increases profitability of the farmers, a statement said.

    The wheat support price has been decided to increase from Rs1200 to Rs1600.

    Since 2010-2011, MSP for wheat has been revised 4 times.

    The new price which has been decided by the ECC is close to the price recommended by Punjab, which is the largest producer of wheat in the country.

    ECC was also apprised of the Status of wheat import by the Trading Corporation of Pakistan (TCP).

    ECC was briefed that till January 2021 TCP shall be able to secure 1 million metric tons of wheat through international bidding.

    On the request of MNFS&R, ECC decided that the initial allocation of TCP for the import of 1.50 MMT of wheat may be enhanced to 1.80 MMT to cater for the additional requirement of 0.30 MMT demanded by the KP and Sindh for shipment by mid-February.

    It was also decided that 300,000 MT of wheat shall be imported on G2G basis from the Russian Federation by PASSCO.

    ECC endorsed the request of Ministry of Food to import another 320,000 from Russia under the G2G arrangement but constituted a Committee of Secretaries of Finance, Commerce and Food Ministry to look into the possibility of import of wheat either by PASSCO or TCP.

    It was also decided that further tendering of wheat may be stopped and TCP may resort to GTG arrangement for additional procurement of wheat.

    Keeping in view the arrival of the new crop in March 2021, the forum decided that no vessel of imported wheat should be arranged either in public or private sector beyond February 2021.

    ECC also decided to release 50 percent of the tariff differential subsidy to the Power Division.

    Finance Division has earmarked Rs.140 billion for 2020-21 as Power Division subsidy.

    The release of Rs.65.8 billion demanded by the Power Division will be used for payments to the power producers in order to maintain adequate liquidity.

    On the summary moved by the Ministry of Industries and Production for the determination of Gas rate for operations of Fatima fertilizer and Agritech, ECC decided that gas rate of Rs772/MMBTU with Variable contribution margin at 186 per bag may be offered to both the units for the period 3rd November 2020 onwards.

    It was briefed to the ECC that GoP’s share at this gas rate has been estimated by NFDC on the basis of RLNG’s last notified rate for July by OGRA, which is approximately 0.42 Billion.

    Further, actual payment by GoP for price differential sum to SNGPL may vary due to difference in monthly rate of RLNG.

    ECC granted approval for the sale of surplus power available at the incremental rate of Rs. 12.96/kwh to all industrial consumer categories, excluding zero-rated industrial consumers, on the incremental consumption over their respective historical consumption or established benchmark.

    ECC also formed a committee consisting of Dr. Ishrat Hussain, Dr. Waqar Masood, Federal Minister for Industries and Production, Hammad Azhar, Federal Minister for Power, Omer Ayub, SAPM Nadeem Babar and SAPM Tabish Gohar to prepare a proposal to include K-Electric in the package.

    The Committee will also propose whether the package shall continue for one year or three years.

    The Committee will also analyze the need for any subsidy that will be involved in the package and source for arranging the same and all the issues that may come up in the calculation and distribution of that subsidy.

  • Stock market gains 585 points on FATF decision

    Stock market gains 585 points on FATF decision

    The Pakistan Stock Market experienced a significant boost on Monday, with the benchmark KSE-100 index soaring by 585 points. This rise is attributed to positive stock market sentiments following the Financial Action Task Force (FATF) decision and the announcement of exceptional financial results from major companies.

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  • Dollar eases to Rs161.05

    Dollar eases to Rs161.05

    KARACHI: The Pak Rupee appreciated by 32 paisas to the dollar on Monday owing to improved foreign exchange reserves of the country and better inflows.

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  • Gul Rehman posted as Chief Collector Balochistan

    Gul Rehman posted as Chief Collector Balochistan

    The Federal Board of Revenue (FBR) has announced a significant reshuffling of officers within the Pakistan Customs Service (PCS), appointing Gul Rehman, a BS-21 officer, as the new Chief Collector of Customs, Balochistan. This move is part of a broader set of transfers and postings aimed at enhancing the efficiency and effectiveness of the Customs administration.

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  • UBL makes Rs5.45 billion quarterly provisioning, write-offs

    UBL makes Rs5.45 billion quarterly provisioning, write-offs

    KARACHI: High provisioning and write-offs of Rs5.45 billion has resulted in decline of after tax profit declared by United Bank Limited (UBL)

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  • Pakistan, Iran agree to increase working hours at borders

    Pakistan, Iran agree to increase working hours at borders

    ISLAMABAD: Pakistan and Iranian authorities at a meeting of the Joint Border Trade Committee (JBTC) have agreed to increase working hours at borders to boost bilateral trade, a statement said on Sunday.

    Both Pakistan and Iranian authorities agreed to increase working hours at Taftan-Mirjaveh, Mand-Pishin and Kohak-Panjgur borders with mutual to boost bilateral trade.

    MCC Appraisement and Facilitation, Quetta successfully conducted 8th Joint Border Trade Committee (JBTC) Between Pakistan and Iran on 20th & 21st October 2020 in Quetta.

    Last meeting was held in November 2019 at Zahidan, Seestan & Balochistan (Iran).

    The 8th JBTC meeting was attended by 16 Provincial and Federal government departments and Abdul Waheed Marwat, Collector MCC A&F, Quetta was Head of the delegation from Pakistan side.

    The Iranian delegation was headed by Mrs Mandana Zanganeh, Deputy Governor Economic Affairs Seestan & Balochistan, Iran.

    Amanullah Khan Yasinzai, Governor Balochistan graced the closing ceremony on October 21, 2020 and appreciated the work and performance of Pakistan Customs for organizing the meeting.

    The Iranian delegates also expressed great satisfaction on efforts taken by Pakistan Customs.

    The Iranian side was convinced to lift ban on export of Pakistani Kinnow (Oranges) and a bilateral Committee was formed to address the issues of transporters from both sides.

    This successful event has proved that Pakistan Customs can not only act as a law enforcement agency but lead agency in facilitation of trade and economic activities, the statement said.