ISLAMABAD: Federal Board of Revenue (FBR) has said that manufacturers, who were covered under rescinded SRO 1125, shall pay one percent advance income tax on imported goods.
(more…)Author: Mrs. Anjum Shahnawaz
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Rupee eases by 7 paisas against dollar
KARACHI: The Pak Rupee ended down by 7 paisas against dollar on Wednesday owing to demand for import and corporate payments.
The rupee ended Rs168.26 to the dollar from previous day’s closing of Rs168.19 in interbank foreign exchange market.
Currency experts said that the demand of the foreign currency for import and corporate payments resulted in depreciation of the local unit.
The experts hoped that the local currency would rebound in coming days owing to significant inflows of export and remittances.
The inflow of workers’ remittances hit monthly record high of $2.77 billion in July 2020.
In July, workers’ remittances rose to US $ 2.768 billion. “This is the highest ever level of remittances in a single month in Pakistan,” according to the SBP.
In terms of growth, remittances increased by 36.5 percent over July 2019 (y/y) and 12.2 percent over June 2020 (m/m). Given the impact of Covid-19 globally, this increase in worker’s remittances is encouraging.
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Pak Suzuki declares half year loss of Rs2.46 billion
KARACHI: Pak Suzuki Motor Company Limited has reported a significant loss of Rs2.46 billion for the first half of 2020 (January to June), as per the financial results submitted to the Pakistan Stock Exchange (PSX) on Wednesday. This represents a 61.44 percent increase in losses compared to the Rs1.52 billion loss recorded in the same period last year.
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Mark-up rate for general provident fund announced
ISLAMABAD: The ministry of finance on Tuesday announced 12 percent mark-up rate on State Provident Fund i.e. General Provident Fund (GP Fund) for fiscal year 2019/2020.
The mark-up rate has been reduced to 12 percent for fiscal year 2019/2020 as against 14.35 percent for the fiscal year 2018/2019.
The mark-up rate for GP Fund for fiscal year 2017/2018 was 11.70 percent and for fiscal year 2016/2017 the rate was 11.3 percent.
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Govt. to generate funds by issuing new Sukuk
KARACHI: The government has decided to generate funds through Islamic mode by reopening of Sukuk and in this regard the State Bank of Pakistan (SBP) on Tuesday issued necessary instructions and guidelines.
The SBP said that subsequent to the issuance of first Ijarah Sukuk issue if the government is in need of additional funds and instead of issuance of a new Sukuk wishes to raise new funds by way of re-opening, then the State Bank of Pakistan will conduct an auction for reopening of the existing Sukuk Issue.
In the Islamic context the steps of reopening of existing Sukuk is similar as that of issuance of a completely new Sukuk i.e. at the time of reopening of Sukuk the transaction is concluded by purchasing additional share in the identified asset on Musha basis which is then given on rent/ Ijarah and a separate Ijarah Agreement is executed.
However, since the underlying asset, maturity date, rental rate and rental payout frequency is kept same as the initial issue, therefore the new issue would be called re-opening of Sukuk instead of a new Sukuk issuance.
The transaction flow for the re-opening of Sukuk would be same as that of an approved structure of the fresh Issue which is re-defined briefly in the following few lines:
At the time of reopening of Sukuk, a fresh Purchase Agreement would be executed between Pakistan Domestic Sukuk Company Limited (PDSCL) (on behalf of Investors) and GOP at an agreed purchase price for the purchase of a new/additional share in the asset.
Subsequently PDSCL (on behalf of Investors) and GoP would enter into an Ijarah Agreement wherein the new / additional assets would be leased to GoP for a fixed period which would be ending on the scheduled maturity date of the first issue.
The other agreements as mentioned in the Shariah Structure of first issue would also be executed simultaneously.
However, the structure of reopening of Sukuk might differ from the structure of the first issue in ways as elaborated below.
The distinguishing features of the re-opening structure are as follows:
• For the first rental period the rental amount of the reopened Sukuk in absolute terms would be the same as the first issue. However, for subsequent period, the Rental Rate for the reopened Sukuk would be same as that of the first issue. Similarly, the maturity of the re-opened Sukuk would also be same as the first issue
• For the determination of the Bid Price the Investors at the time of re-opening would take into consideration the known Rental Rate (in terms of benchmark), the remaining tenor of the issue and the higher first rental amount. The Purchase Price (at which settlement will take place) would have the following three components which can be referred to individually or collectively for the reporting purpose:
i. Face value of Sukuk
ii. Market premium/ discount
iii. Price premium due to higher first rental
The component (iii) mentioned above is based on the rental rate determined in the fresh auction and/or start of last rental period; hence will be known to the investor.
The investors would bid in the auction on the price for re-opening of the Sukuk, which may be at premium or discount based on market conditions, considering component (i) and (ii) mentioned above.
The component (iii) will be added to the Cut-off Bid Price (as per auction result) for determining purchase price at which settlement will take place.
• On completion of the bidding, the Purchase Agreement for the purchase of new/additional asset between PDSCL (on behalf of the Investors) and GoP would be executed at purchase price.
• The Sukuk would be recorded in the books of accounts at Absolute Auction Price i.e. the purchase price without any adjustment. ‘However, for reporting purpose the above identified 3 components of the Purchase Price may be recorded separately or collectively as required.
• In case the date of Ijarah Agreement lies in between the two rental payment dates of the original issue, then the first rental period would be of a period less than 6 months. In this case the first rental amount for the reopened sukuk would be communicated to the lessee in absolute terms. This rental amount would be equal in absolute terms with the corresponding 6-month rental of the first/ previous issue.
• The full amount of first rental of the re-opened sukuk would be booked as rental income by the Investors without adjustment.
• On the expiry of the first lease period subsequent to re-opening of Sukuk an Asset Comingling Declaration’ shall be executed by PDSCL (as trustee and agent of investors) on the last day of first rental period to inform GoP about the combined proportionate share of investors in the underlying asset.
• Subsequently, a single rental notice referring to Comingled Assets shall be executed for subsequent lease periods.
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Women entrepreneurs to get loan up to Rs5 million: SBP
KARACHI: The State Bank of Pakistan (SBP) has decided to enhance the limit of loan for women entrepreneurs up to Rs5 million from Rs1.5 million in order to encourage women participation in the economy.
In a statement issued on Tuesday the central bank said that it had enhanced the financing limit under its Refinance and Credit Guarantee Scheme for Women Entrepreneurs from Rs1.5 million to Rs5 million.
The decision has been taken in light of feedback received from various stakeholders about current financing limit being insufficient to cover the financing needs of women entrepreneurs, the SBP said.
This decision is in line with the government policy to support and revive economic activities in the country and SBP’s key objective of improving access to finance for priority segments including women entrepreneurs.
Initially in August 2017, State Bank had introduced Refinance and Credit Guarantee Scheme for Women Entrepreneurs in underserved areas to promote financial inclusion and access to finance for women entrepreneurs in the country.
Subsequently, the scope of scheme was enhanced to cover whole of Pakistan.
Under this scheme, SBP provides refinance to participating financial institutions at 0 percent on their financing to women entrepreneurs at maximum end user rate of 5 percent. Moreover, 60 percent risk coverage is also available to the participating institutions.
The enhancement in financing limit under SBP scheme is expected to increase financial inclusion of women since more women entrepreneurs are likely to be attracted for setting up of new businesses or for expanding the scope of their existing businesses by availing concessional financing under SBP scheme.
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TPL, Pak Suzuki sign agreement for auto insurance
KARACHI: TPL Insurance, Pakistan’s first Direct Insurance Company, has signed a Memorandum of Understanding (MoU) with Pak Suzuki, the country’s largest car manufacturing company to provide services of auto insurance.
A statement on Tuesday said that following the partnership, Pak Suzuki customers can avail TPL Insurance’s services at any of the 168 Pak Suzuki authorized dealerships operating nationwide.
Customers will have access to One Window Auto Insurance Solution offering tailored coverage backed by the fastest claim settlement ever offered in Pakistan, Online Policy Issuance, services and repair facilities at Pak Suzuki authorized 3S dealerships along with Value Added Services like Self Survey using the TPL Insurance Mobile App – all at extremely competitive rates for Pak Suzuki Customers.
TPL Insurance’s Value Added Services include Drive Pro, Pakistan’s first Telematics Auto Insurance which lets users track driving scores based on driving metrics to spot areas for improvement, helping users drive smart and make the streets safer to drive on. The Self Survey feature enables customers to lodge claims instantly, update details of their vehicle and manage maintenance schedules. In addition to these services, customers can also Buy, Claim and Renew insurance directly through the TPL Insurance App.
This partnership is in line with TPL Insurance’s strategy to evolve as a dominant player by exploring profitable niches through the deployment of cutting-edge technology. With disruption at its core, TPL Insurance continues to invest in platforms that will grow Insurtech in the country.
Commenting on the occasion, Muhammad Aminuddin, CEO, TPL Insurance said, “Together with Pak Suzuki, TPL Insurance will cater to the evolving needs of the companies’ mutual customers by delivering quality coverage and disruptive insurance solutions. I am confident that this partnership will boost TPL Insurance’s footprint in the market by catering to our rapidly growing economy and the population’s increasing consumption of insurance services.”
Masafumi Harano, Managing Director, Pak Suzuki said, “This is an ideal time for such initiatives in Pakistan as the importance of customer services is at an all-time high. We are confident to grow together and explore more transparent and creative solutions for customers.”
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FBR decides action against retailers for avoiding mandatory integration
ISLAMABAD: Federal Board of Revenue (FBR) has decided to take action against retailers having huge turnovers for not complying with mandatory integration with the online system of the tax authority.
In this regard the FBR on Tuesday directed the retailers, who are required to integrate their sales and purchases under Sales Tax Act, 1990, to link their invoicing system by August 31, 2020.
The FBR has explained that all retailers who have the network of chain stores throughout Pakistan, located in air-conditioned big shopping malls or plazas and their cumulative electricity bill during the immediately preceding twelve consecutive months exceeds twelve hundred thousand rupees and they are engaged in bulk import and supply of consumer good on wholesale basis to the retailers as well as on retail basis in to the consumer and their shop’s size measures one thousand square feet in area or more must integrate their retail outlets with the FBR’s computerized system for real time reporting of sales.
FBR has warned that the last date for such integration is August 31, 2020 and afterwards those who failed to integrate would be imposed a penalty up to rupees one million and if the offence continued, the business premises of such retailer shall be sealed.
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Stock market gains 62 points in mixed trading
KARACHI: The stock market has witnessed an increase of 62 points on Tuesday in mixed trading activities during the day.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,184 points as against 40,123 points showing an increase of 62 points.
Analysts at Arif Habib Limited said that the market opened on a positive note with +224 points and added a total of +312 points on the index.
E&P and Cement sectors largely played a major role in positive activity. Banks and Fertilizer sectors, on the other hand, contributed to selling pressure on the index.
International crude oil prices have been stable for quite some time now, which have helped Investors take a long term view on E&P stocks thereby giving continual ascent to the underlying scrips.
Cement sector stocks performed on the back of a stay that one of the Cement companies obtained against the probe on a recent increase in Cement prices.
Cement sector led the volumes on the bourse with 83 million shares, followed by Power (48.8 million) and O&GMCs (45.8 million). Among scrips, PIBTL topped the volumes with 35.6 million, followed by PRL (27.5 million) and DGKC (26.7 million).
Sectors contributing to the performance include Cement (+120 points), E&P (+21 points), Pharma (+12 points), Banks (-64 points), Fertilizer (-18 points) and Technology (-17 points).
Volumes declined from 522.7 million shares to 458.8 million shares (-12 percent DoD). Average traded value also declined by 8 percent to reach US$ 123.2 million as agsinst US$ 133.7 million.
Stocks that contributed significantly to the volumes include PIBTL, PRL, DGKC, MLCF and HASCOL, which formed 29 percent of total volumes.
Stocks that contributed positively to the index include LUCK (+33 points), DGKC (+31 points), CHCC (+23 points), OGDC (+14 points) and BAHL (+14 points). Stocks that contributed negatively include UBL (-28 points), HBL (-25 points), TRG (-18 points), PSO (-15 points) and ENGRO (-11 points).
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Rupee eases amid record monthly inflows of remittances
KARACHI: The Pak Rupee ended down by two paisas against dollar on Tuesday amid record remittances received by the central bank.
The rupee ended Rs168.19 to the dollar from previous day’s closing of Rs168.17 in interbank foreign exchange market.
Currency experts said that reports of record remittances received by the State Bank of Pakistan (SBP) helped the rupee to avoid significant depreciation against the foreign currency.
The inflow of workers’ remittances hit monthly record high of $2.77 billion in July 2020.
In July, workers’ remittances rose to US $ 2.768 billion. “This is the highest ever level of remittances in a single month in Pakistan,” according to the SBP.
In terms of growth, remittances increased by 36.5 percent over July 2019 (y/y) and 12.2 percent over June 2020 (m/m). Given the impact of Covid-19 globally, this increase in worker’s remittances is encouraging.