Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Salient features of amnesty scheme for housing, construction sector

    Salient features of amnesty scheme for housing, construction sector

    KARACHI: The government has announced an amnesty scheme for investors in order to boost housing/construction activities in the country at a faster pace.

    Under this package sources of investment made to a housing project may not be asked if the investment made through a valid bank account by December 31, 2020 and projected identified for the investment is completed by September 2022.

    According to official documents made available to PkRevenue.com following are the salient features of the scheme allowed under Section 100D of the Income Tax Ordinance, 2001:

    Fixed Tax Regime for builders and developers

    • Tax liability computed on the basis of square feet/yard, to be paid in quarterly installments
    • New projects as well as existing incomplete project can opt for the scheme up to December 12, 2020
    • Projects to be registered with Federal Board of Revenue (FBR) online through IRS portal
    • Existing incomplete projects have to self declare the percentage of completion of project on the relevant date
    • Projects must be completed by September 30, 2022.

    Exemptions/Benefits:

    • Exemption from requirement of withholding tax on purchase of building material except cement and steel
    • Exemption from requirement of withholding tax on acquisition of services relating to construction except those from companies
    • Permission to incorporate ten times of fixed tax paid as income in the books of accounts
    • 90 percent reduction in fixed tax liability for low cost housing
    • Dividend paid by builder or developer companies shall not be liable to tax and there shall be no withholding on the payment of these dividends

    Exemption from Section 111 of the Income Tax Ordinance, 2001 for individuals:

    • Money is deposited in a new bank account up to December 31, 2020; or
    • Having ownership/title of the land invested as on April 17, 2020.

    Exemption from Section 111 of the Income Tax Ordinance, 2001 for Company / Association of Persons (AOP):

    • By company/AOP if:
    • A single purpose company or AOP is registered between April 17, 2020 and December 31, 2020.
    • Money is invested through a crossed banking instrument up to December 31, 2020; or
    • Land owned by the partner/shareholder is transferred to the company / AOP up to December 12, 2020.
    • Money or land invested is utilized in the project
    • Project is completed by September 30, 2022
    • In case of builder, grey structure is completed (top roof as per plan is laid)
    • In case of a developer:
    • Landscape is completed and all roads are laid up to sub-grade level
    • At least 50 percent plots have been sold and at least 40 percent sale receipts have been received.

    Exemption from Section 111 on purchase of:

    • Plot, if:
    • Plot is purchased before December 31, 2020 (complete payment is made through banking channel before December 31, 2020)
    • Construction on such plot is started before December 31, 2020 and completed before September 30, 2022
    • Building, if:
    • Purchase is from a registered project and buyer is the first purchaser of the building
    • Purchase is made before September 30, 2022 (complete payment is made through banking channel)

    Exemption from Section 111 is not available for:

    • Public office holders
    • Public companies, REITs and companies whose income is exempt
    • Proceeds of crime.
  • 66 percent shelf life mandatory for import of edible products

    66 percent shelf life mandatory for import of edible products

    ISLAMABAD: The ministry of commerce has allowed import of all edible products with meeting certain condition such as those products have at least 66 percent shelf life remaining from the date of manufacturing.

    The ministry issued SRO 902(I)/2020 dated September 25, 2020 to unveil Import Policy Order 2020.

    The ministry said all edible products are allowed but those subject to following conditions:

    (i) It must be fit for human consumption;

    (ii) They shall be free of any ‘haram’ element or ingredients;

    (iii) Edible products shall have at least 66% (2/3rd) shelf life, remaining from the date of manufacturing;

    (iii a) The ingredients and details of the product (e.g. nutritional facts, usage instructions etc.) of food products are printed in Urdu and English languages on the consumer packaging;

    (iii b) The logo of the Halal certification body is printed on the consumer packaging;

    (iii c) The labeling under clauses (iii a) & (iii b) above shall not be in the form of a sticker, overprinting, stamp or scratched labeling;

    (iii d) The shipment is accompanied by a ’Halal certificate’ issued by a Halal Certification Body, accredited with an Accrediting Body (AB) which is a member of International Halal Accreditation Forum (IHAF) or Standard Metrology Institute for Islamic Countries (SMIIC);

    (iv) Clause (iii-d) shall take effect from the 1st day of May, 2020.

    (v) That, in case of meat, it was obtained from ‘halal animals and slaughtered in accordance with the Islamic injunctions;

    (vi) Import of edible oil in bulk quantity shall be on landed weight and quality basis.

  • Customs to auction confiscated vehicles at Gaddani on October 15

    Customs to auction confiscated vehicles at Gaddani on October 15

    KARACHI: Pakistan Customs has announced auction of confiscated vehicles on October 15, 2020 to be held at Customs House Gaddani.

    (more…)
  • Tax on taxable income explained

    Tax on taxable income explained

    ISLAMABAD: Federal Board of Revenue (FBR) has explained taxable income for collection of tax from persons or corporate entities. The FBR issued Income Tax Ordinance, 2001 updated June 30, 2020 incorporating amendments brought through Finance Act, 2020.

    (more…)
  • FBR projects 12 percent tax to GDP ratio in three years

    FBR projects 12 percent tax to GDP ratio in three years

    ISLAMABAD: The Federal Board of Revenue (FBR) is projecting tax-to-GDP ratio at 12 percent in three years after slippage of the ratio to a single digit in 2019/2020, a report said.

    (more…)
  • Weekly Review: Political uncertainty, FATF upcoming review remain major concerns for market

    Weekly Review: Political uncertainty, FATF upcoming review remain major concerns for market

    KARACHI: The market may move next week with major concerns of investors related to political uncertainty in the country and upcoming review of Financial Action Task Force (FATF).

    However, analysts at Arif Habib Limited said that the market to remain green due to: Higher interest of local individuals in the market; expectation of better results especially for Cements, OMCs, E&Ps, Autos, Textile, Technology, Steel, Chemicals, and Consumer Goods; improvement on macro-economic front amid strengthening PKR/USD parity; and Coronavirus daily infection ratio continuing to remain low.

    On the other hand, upcoming key announcements like Automobile sales data (released by PAMA) might attract investors’ interest in automobile sector.

    However, key concerns remain: FATF outcome which is expected this month; Higher current account deficit expected for September 2020; Political uncertainty; and Increase in gas and electricity tariffs.

    The benchmark KSE-100 of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.4x (2021) compared to Asia Pac regional average of 14.0x while offering a dividend yield of around 6.2 percent versus 2.7 percent offered by the region.

    This week trading commenced on a negative note due to i) Release of CPI by Pakistan Bureau of Statistics at 9.04 percent which was higher than market consensus, Redemption in mutual funds, Political noise on account of opposition parties’ alliance under the banner of Pakistan Democratic Movement (PDM), Increase in Trade deficit by 37 percent MoM to USD 2.39 billion in September 2020, and Pressure on global equities.

    On Tuesday, negative performance remained short lived attributable to international oil prices (WTI) increasing by 5 percent DoD (benefitting E&P scrips) and robust cement dispatches which improved investors sentiments in cyclical sectors.

    As a result, the KSE-100 index closed at 40,798 points, up by 728 points or 1.82 percent WoW.

    Contribution to the upside was led by i) Cements (164 points), ii) Commercial Banks (127 points), iii) Oil and Gas Exploration Companies (94 points), iv) Oil and Gas Marketing Companies (76 points), and v) Textile Composite (61 points). Scrip-wise major gainers were HBL (86 points), OGDC (71 points), PSO (66 points), UBL (65 points), and LUCK (45 points). Whereas, scrip-wise major losers were COLG (32 points), BAHL (31 points) KEL (21 points), NBP (15 points) and PAKT (13 points).

    Foreigners offloaded stocks worth of USD 7.45 million compared to a net sell of USD 8.25 million last week. Major selling was witnessed in Commercial Banks (USD 2.48 million) and E&P (USD 2.15 million). On the local front, buying was reported by Banks / DFIs (USD 7.14 million) followed by Insurance Companies (USD 6.63 million). Average volumes arrived at 417 million shares (up by 7 percent WoW) while average value traded settled at USD 81 million (down by 2 percent WoW).

  • SPI inflation rises by 11.28 percent YoY basis

    SPI inflation rises by 11.28 percent YoY basis

    ISLAMABAD: The inflation based on sensitive price indicator (SPI) has increased by 11.28 percent Year on Year by week ended October 08, 2020, Pakistan Bureau of Statistics (PBS) said on Friday.

    The PBS computes SPI on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country.

    The SPI comprises of 51 essential items and the prices are being collected from 50 markets in 17 cities of the country.

    The SPI for the week under review over corresponding week October 10, 2019 has shown 11.28 percent increase

    The YoY increase in prices of essential items is as: tomatoes 117 percent; chilies powder 86.31 percent, potatoes 64.75 percent, pulse moong 41.13 percent, eggs 40.82 percent, pulse mash 34.66 percent, sugar 32.08 percent, pulse masoor 25.72 percent, bread plain 19.41 percent, gur (raw sugar) 19.34 percent, wheat flour bag 18.32 percent, vegetable ghee 1kg pouch 17.43 percent, mustart oil 16.32 percent.

    The YoY price increase of non-food items is: sufi washing soap 250 grams 17.49 percent match box 17.07 percent.

    The items which registered decline in price YoY basis are: garlic 9.91 percent, onions 1.50 percent, hi-speed diesel 18.03 percent, LPG 11.67kg cylinder 13.53 percent, petrol super 8.11 percent.

    The SPI has been increased by 1.24 percent by week ended October 08, 2020 over previous week October 01, 2020.

    The prices of following items increased on WoW basis: tomatoes 16.39 percent, onions 12.78 percent, eggs 10.78 percent, chicken 5.34 percent, wheat flour bag 2.78 percent, potatoes 2.64 percent, pulse masoor 1.21 percent, sugar 1.03 percent.

    Prices of essential items that registered decline on WoW basis are: Bananas 2.17 percent, pulse moong 0.4 percent, pulse mash 0.13 percent, gur (raw sugar) 0.04 percent.

  • No restriction on withdrawal, transfers from foreign currency accounts: ministry

    No restriction on withdrawal, transfers from foreign currency accounts: ministry

    ISLAMABAD: The ministry of finance on Friday issued rules governing foreign currency accounts of individuals under which there shall be no restriction on cash withdrawal or transfers from the foreign currency account.

    The ministry issues rules governing foreign currency accounts of individuals, under which a foreign currency account of an individual may be credited with the remittances received from abroad through banking channel except:

    — payment for goods exported from Pakistan;

    — payment for services rendered in or from Pakistan;

    — proceeds of securities issued or sold to non-residents; and

    — any foreign exchange borrowed from abroad under any general or special permission of the State Bank of Pakistan (SBP).

    It said that the SBP may issue any general or special permission for credit to the account.

    The rules however, stated that a foreign currency account may be credited through transfer from other individual foreign currency account.

    “Proceeds realized on account of profit, return and principal amount of investment made in any foreign currency dominated or foreign currency linked scheme of Government of Pakistan may be credited into the account,” it said.

    A foreign currency account shall not be credited with any foreign exchange purchased from an authorized dealer, exchange company or money changer except as allowed by the SBP through general or special permission under any law. However, foreign currency brought in from abroad and duly declared at the point of entry into Pakistan with Pakistan Customs may be credited in the account.

    The rules explained that there shall be no restriction on cash withdrawal or transfers from the foreign currency account.

  • Stock market gains 445 points as positive sentiments prevail

    Stock market gains 445 points as positive sentiments prevail

    KARACHI: The stock market gained 445 points on Friday as positive sentiments prevailed during the trading.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,798 points as against 40,354 points showing an increase of 445 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note today, and after dipping 46 points earlier in the session, the index rebounded with the same vigor as observed in the past 2 sessions.

    Overall, the Index posted an increase of 2230 points since the recent bottom touched on October 6, 2020. Banking and E&P sectors performed well on the back of quarterly earnings as well as an increase in international crude oil prices.

    Among scrips, HASCOL led the volumes with 53.9 million shares, followed by UNITY (34.9 million) and TRG (21.4 million).

    Sectors contributing to the performance include Banks (+136 points), E&P (+88 points), Power (+44 points), Textile (+35 points), Autos (+35 points).

    Volumes declined from 476.8 million shares to 358.8 million shares (-25 percent DoD). Average traded value also declined by 24 percent to reach US$ 72.8 million as against US$ 96.2 million.

    Stocks that contributed significantly to the volumes include HASCOL, UNITY, TRG, BOP and WTL, which formed 39 percent of total volumes.

    Stocks that contributed positively to the index include HBL (+64 points), HUBC (+47 points), OGDC (+31 points), PPL (+29 points) and TRG (+27 points). Stocks that contributed negatively include PAKT (-14 points), HASCOL (-12 points), KEL (-5 points), NESTLE (-5 points) and ABOT (-4 points).

  • Mobile phone operators deduct only applicable tax rates: PTA

    Mobile phone operators deduct only applicable tax rates: PTA

    ISLAMABAD: Pakistan Telecommunication Authority (PTA) on Friday said that the Cellular Mobile Operators (CMOs) are deducting only applicable rates of taxes after the restoration of levies by Supreme Court of Pakistan.

    In a statement, with reference to taxes applied on the recharge/reload of prepaid balance, the PTA said that the CMOs are deducting only withholding tax and general sales tax/federal excise duty on the prepaid recharge/reload after restoration of taxes by the Supreme Court of Pakistan from April 2019.

    The PTA said that on the recharge of Rs200 balance provided to the user is Rs177.778 (and not Rs152 as reported on the social media) after deduction of Rs22.22 against withholding tax at 12.5 percent.

    General Sales Tax at 19.5 percent is applied on per call, SMS, data usage basis or opting for any additional bundle/package.

    “When a user consumes its remaining balance of Rs177.778, a total of Rs29.01 as GST is charged,” the PTA said.

    In the same way, if a package is priced at Rs167 (without GST), the same, requires a prepaid balance of Rs199.56 (Price+GST=Rs167+Rs32.56). Due to lack of clarity on the deduction of GST in addition to withholding tax, mobile subscribers are assuming that CMOs are charging well above applicable taxes, which is not correct, the PTA said.

    The PTA further said that it had fixed a ceiling on call setup charges at Re 0.15 per call. PTA is vigilant about the rates/tariffs being charged by CMOs and action will be initiated on any reported incidence of charging above the published tariffs and applicable taxes in accordance with the law, it added.