Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Weekly Review: Market to remain under pressure on coronavirus threat

    Weekly Review: Market to remain under pressure on coronavirus threat

    KARACHI: Coronavirus fear to haunt the local bourses during next week as it has already dented the market badly in the outgoing week.

    Analysts at Arif Habib Limited said that with the extension of global panic over coronavirus and its spill-over on markets, currencies and commodities alike, pressure on the benchmark KSE-100 index to sustain.

    Albeit, topsy-turvy trend of the market on last day of the week suggests that recent correction has opened up valuations and select sectors may come under limelight.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.6x (2020) compared to Asia Pac regional average of 11.4x and while offering DY of ~7.2 percent versus ~2.9 percent offered by the region.

    Given the outbreak of Coronavirus across 40-odd countries with no signs of containment in sight, global equities and commodities (such as Oil) were quick to witness a rout.

    Moreover, Moody’s report signaling an adverse impact on local Banks post Pakistan’s inclusion in the FATF’s Grey List, further eroded sentiments.

    That said, Pakistan and IMF’s staff-level agreement on the second review under the $6 billion Extended Fund Facility (EFF) provided respite to the market.

    The local equity bourse shed 2,266points (5.6 percent WoW) to close at 37,984 points, depicting the biggest weekly decline since 16th Jun 2017 in points.

    Sector-wise negative contributions came from i) E&P (575 points) led by weakness in International oil prices, ii) Commercial Banks (531 points), iii) Fertilizer (278 points), iv) Power Generation & Distribution (233 points), and v) Oil and Gas Marketing Companies (191 points). Scrip-wise negative contributions were led by PPL (256 points), OGDC (194 points), HUBC (170 points), HBL (152 points), and ENGRO (103 points).

    Foreign selling continued this week clocking-in at USD 22.5mn compared to a net sell of USD 8.6 million last week.

    Selling was witnessed in Commercial Banks (USD 7.6 million) and E&P (USD 4.8 million). On the domestic front, major buying was reported by Insurance Companies (USD 25.3 million) and Banks / DFIs (USD 7.8 million).

    Average Volumes settled at 174 million shares (up by 63 percent WoW) while average value traded clocked-in at USD 48 million (up by 54 percent WoW).

  • NBP announces 21% decline in after tax profit

    NBP announces 21% decline in after tax profit

    KARACHI: National Bank of Pakistan (NBP) on Friday announced 21 percent decline in its annual profit for period ended December 31, 2019. The bank declared Rs15.8 billion after tax profit for the year 2019 as cmopared with Rs20.01 billion in the last year.

    According to unconsolidated profit and loss account, the bank declared basic earnings per share at Rs7.43 for the year 2019 as it was Rs9.41 EPS in 2018.

    The net interest income of the bank rose by 18.53 percent to Rs71.9 billion for the period ended December 31, 2019 as compared with Rs60.66 billion a year ago. Non-mark up income of the bank was flat at Rs36.19 bllion when comared with Rs36.246 billion a year ago.

    The operating expenses of the NBP increased by 18.02 percent to Rs65.725 billion when compared with Rs55.687 billion.

    The provisioning for write-offs increased by 26.1 percent to Rs14.25 billion in 2019 as compared with Rs11.3 billion a year ago.

    The tax payment of the bank also increased by 26.22 percent to Rs12.193 billion for the year ended December 31, 2019 as compared with Rs9.66 billion in 2018.

  • FBR receives 2.45 million returns for TY2019, no date extension

    FBR receives 2.45 million returns for TY2019, no date extension

    ISLAMABAD: Federal Board of Revenue (FBR) has received 2.45 million income tax returns for tax year 2019 till evening of February 28, 2020, which is the last date for filing the returns.

    A statement issued on Friday, the FBR said that the last date for filing income tax returns would not be extended further. The new active taxpayers list (ATL) for tax year 2019 will be updated by mid-night February 29, 2020.

    The FBR said that those persons who were on the ATL-2018 but not filed their returns for tax year 2019 would not get their names on the new ATL.

    The FBR said that it had received 2.45 million income tax returns for tax year 2019, which was 45 percent higher when compared with 1.68 million on the same date of the last year.

    The FBR said that around 2.34 million individuals including salaried and business filed their returns for tax year 2019. Association of Persons (AOPs) filed 62,403 returns and companies filed 40,988 returns.

  • Dr. Najeebullah posted as Commissioner LTU Karachi

    Dr. Najeebullah posted as Commissioner LTU Karachi

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday transferred Dr. Najeebullah, an officer of Inland Revenue Service (BS-19) as Commissioner, Large Taxpayers Unit (LTU), Karachi.

    The FBR notified transfers and postings of IRS officers of BS-19 and BS-20.

    Following officers have been transferred and posted:

    01. Dr. Najeebullah (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (Zone-IV) Large Taxpayers Unit, Karachi from the post of Additional Commissioner, (IR) Large Taxpayers Unit, Karachi.

    02. Zubair Bilal (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Multan from the post of SA to Chairman, Federal Board of Revenue (Hq), Islamabad.

    03. Yasir Ali (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Corporate Zone) Regional Tax Office, Multan from the post of Director, Directorate of Intelligence & Investigation (Inland Revenue), Multan.

    04. Zulfiqar Ali Memon (Inland Revenue Service/BS-19) has been transferred and posted as SA to Chairman, Federal Board of Revenue (Hq), Islamabad from the post of Commissioner, (OPS) (Zone-IV) Large Taxpayers Unit, Karachi.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • Stock market ends down by 104 points amid IMF staff-level agreement

    Stock market ends down by 104 points amid IMF staff-level agreement

    KARACHI: The stock market fell by 104 points on Friday amid reports of Pakistan and International Monetary Fund (IMF) reached on a staff-level agreement.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) Index closed at 37,984 points as against 38,087 points showing a decline of 104 points.

    Analysts at Arif Habib Limited said that the market continued the path to recovery after melting yesterday and then later staging a comeback.

    The index went up by 220 points and also saw -329 points, closing the session -104 points. Cement and Steel sectors remained the outperformers, with further price gains following yesterday’s performance. Banking sector scrips generally faced selling pressure with NBP bearing lower circuit, whereas BOP could post only nominal gain.

    Continuous slide in international crude prices kept the E&P, OMCs and Refinery sector under pressure.

    Cement sector topped the volumes with 48.3 million shares, followed by Banks (26.1 million) and O&GMCs (23.4 million). Among scrips, HASCOL realized 18.5 million shares, followed by MLCF (17.6 million) and UNITY (14 million).

    Sectors contributing to the performance include E&P (-130 points), Banks (-90 points), Power (-32 points), O&GMCs (-16 points), Cement (+73 points), Fertilizer (+54 points), Pharma (+18 points).

    Volumes increased from 147.9 million shares to 201.6 million shares (+36 percent DoD). Average traded value also increased by 23 percent to reach US$ 55.7 million as against US$ 45.1 million.

    Stocks that contributed significantly to the volumes include HASCOL, MLCF, UNITY, BOP and DGKC, which formed 36 percent of total volumes.

    Stocks that contributed positively include ENGRO (+39 points), LUCK (+34 points), MEBL (+29 points), FFC (+18 points) and SEARL (+17 points). Stocks that contributed negatively include HBL (-46 points), PPL (-45 points), OGDC (-41 points), MCB (-35 points), and POL (-31 points).

  • Rupee ends down by two paisas against dollar

    Rupee ends down by two paisas against dollar

    KARACHI: The Pak Rupee eased by two paisas against dollar on Friday in range bound trading activities, dealers said.

    The rupee closed at Rs154.23 to the dollar from previous day’s closing of Rs154.21 in interbank foreign exchange market.

    The currency dealers said that the market was remained dull during the day owing to lackluster demand from importers and corporate buyers.

    However, slight demand was seen due to the last week day, they added.

    The foreign currency market was initiated in the range of Rs154.21 and Rs154.24. The market recorded day high of Rs154.24 and low of Rs154.19 and closed at Rs154.23.

    The exchange rate in open market witnessed depreciation in rupee value. The buying and selling of the dollar was recorded at Rs154.10/Rs154.40 from previous day’s closing of Rs154.00/Rs154.30 in interbank foreign exchange market.

  • Sectoral analysis shows massive decline in sales tax from OMCs

    Sectoral analysis shows massive decline in sales tax from OMCs

    ISLAMABAD: Federal Board of Revenue (FBR) has conducted sectoral analysis to identify reasons behind shortfall in revenue collection. The analysis showed massive decline in sales tax from Oil Market Companies (OMCs) during July – January 2019/2020.

    According to official documents, the collection of sales tax from OMCs was at Rs13.56 billion during first seven months of current fiscal year as compared with Rs18.94 billion in the corresponding period of the last year, showing 28 percent decline.

    The fall in sales tax collection from OMCs is much higher than the decline in domestic sales of the oil market companies. The domestic oil sales fell by 10 percent to 10.14 million tons during the period under review as compared with 11.3 million tons in the same period of the last fiscal year.

    The analysis also revealed that the collection of sales tax from iron and steel products declined by 29 percent to Rs4.93 billion as compared with Rs6.92 billion in the same period of the last fiscal year.

    Similarly, the collection of sales tax from sales of motor cars fell by 43 percent to Rs2.22 billion during first seven months of the current fiscal year as compared with Rs3.86 billion in the corresponding period of the last fiscal year.

    Reportedly, the FBR is facing huge shortfall in revenue collection to achieve current fiscal year revenue target. The FBR was assigned Rs5.55 trillion target at the start of current fiscal year. However, this target was revised downwards to Rs5.238 trillion.

    The FBR provisionally collected Rs2,400 billion during first seven months of current fiscal year as compared with Rs2,067 billion in the same period of the last fiscal year.

    The revenue authority is required another Rs2,828 billion in remaining five months to achieve the collection target.

    The FBR conducted analysis of 11 sectors, which included: OMCs, Iron and Steel Products; natural gas; auto parts; motor cars; motor cycles; tea; ceramic tiles; pickle in oil; printing industries; and storage batteries.

    All the above sectors have shown decline in sales tax during the period under review.

  • FBR to initiate action against non-filers after date expiry

    FBR to initiate action against non-filers after date expiry

    KARACHI: Federal Board of Revenue (FBR) to initiate proceedings against persons failed to file income tax returns for tax year 2019 after expiry of return filing date i.e. February 28, 2020.

    Sources in Federal Board of Revenue (FBR) on Thursday said that FBR unlikely to further extend the return filing date. The return filing date for tax year 2019 is expiring today i.e. Friday, February 28, 2020.

    The sources said that tax authorities would identify persons who had filed their income tax returns for tax year 2018 but failed to file their returns for tax year 2019 despite grant of several extensions.

    They said that the FBR would enforce returns and initiate legal proceedings against non-compliant taxpayers.

    The last date for filing annual returns was September 30, 2019 for salaried persons, business individuals and Association of Persons (AOPs). While the last date for filing income tax returns for corporate entities was December 31, 2019.

    The FBR while considering difficulties faced by taxpayers granted several extensions for filing tax returns and last was granted up to February 28, 2020.

    The sources said that those persons who failed to file their returns would face penalty as prescribed under the Income Tax Ordinance, 2001.

    Under Section 114 of Income Tax Ordinance, 2001 following persons/companies are required to file annual returns:

    (a) every company;

    (ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

    (ac) any non-profit organization as defined in clause (36) of section 2;

    (ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

    (b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

    (i) has been charged to tax in respect of any of the two preceding tax years;

    (ii) claims a loss carried forward under this Ordinance for a tax year;

    (iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

    (iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

    (v) owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) owns a motor vehicle having engine capacity above 1000 CC;

    (vii) has obtained National Tax Number; or

    (viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

    (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

    (x) every resident person being an individual required to file foreign income and assets statement under section 116A.

    (1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

  • KTBA suggests automatic stay against recovery on 10% tax payment

    KTBA suggests automatic stay against recovery on 10% tax payment

    KARACHI: Karachi Tax Bar Association (KTBA) has suggested an automatic stay should be granted where a taxpayer paid 10 percent of the defaulted amount.

    The stay should be granted till the decision by the Commissioner Inland Revenue (Appeals), the KTBA said in a letter sent to Member Inland Revenue (Policy) on Thursday.

    The tax bar through the letter submitted its observations on the draft rules recently notified by the FBR related to third party recovery.

    Through the draft rules, it is proposed that recovery may not be made where the taxpayer has voluntarily paid 10 percent of the tax demand until the decision of the appeal filed with the commission inland revenue (appeals).

    “The condition to consider only voluntary payments, while issuing recovery notice, is contrary to the proviso to section 140(1) of Income Tax Ordinance, 2001 where the term ‘tax paid’ has been used which invariably includes any recoveries made by the department as well.”

    It is therefore, suggested that where partial recovery up to 10 percent of the tax demand has already been made, the taxpayer should be entitled to automatic stay against any further recovery till the decision by the Commissioner Inland Revenue (Appeals), the KTBA said.

    The KTBA observed that notice of recovery issued under Section 140 has to be complied with immediately. Meanwhile, Rule 210D proposes for dispute resolution relating to execution, discharge or satisfaction of a recovery notice.

    A combined reading of the provisions suggests that the recovery could be affected before institution of any dispute with the Commissioner Inland Revenue.

    “A minimum three working days time may be allowed for payment of the outstanding demand (after due date of service of recovery notice) to enable the defaulter to raise any genuine concerns arising from execution, discharge or satisfaction of such a notice.”

  • FBR issues precautionary measures against coronavirus

    FBR issues precautionary measures against coronavirus

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued precautionary measures for tax officials to protect themselves against coronavirus and educate taxpayers and general public for prevention.

    The FBR said that with the recent outbreak of coronavirus (COVID-19) in China, its subsequent spread across the globe and education of two confirmed cases in Pakistan, it is imperative that in line with the direction of the federal government, all officers and staff of FBR be educated on the cases, symptoms and prevention measures to protect themselves as well as to educate the taxpayers and general population about the same.

    A compendium of causes, symptoms and prevention; complied from research of World Health Organization, the Center of Disease Control and Prevention (CDC-USA) and Ministry of National Health Service, Islamabad is summarized as under:

    Causes: The coronavirus spreads primarily from person to person contact. CDC-USA attributes it to close contact (6 feet or less) with a person already infected. Prime cause of infection is through the airborne (water) droplets during sneezing and coughing of an already infected person.

    Touching an area where an infected person has sneezed or coughed may also be avoided. Furthermore, it may spread from consuming uncooked or undercooked animal organ meat.

    Summarized, Coronavirus spreads in similar way to flu. Persons at a higher age bracket and persons with weak/weakened immune system are at most risk.

    Symptoms: The Coronavirus may manifest symptoms within 2 to 14 days after being contracted. As such, a non-symptomatic person may also be carrying the virus. Common symptoms include combination of: fever, cough and shortness of breath/breathing difficulties.

    Most persons infected with Coronavirus experience only mild symptoms and recover. However, in more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.

    Prevention: As a matter of general day to day precautions, measures should be taken, included: use of face masks on mouth and nose; Use of alcohol-based hand sanitizers; avoiding close contact with any person showing symptoms of Coronavirus; covering mouth and nose with hand or elbow while sneezing or coughing; washing of hands with soap for at least 20 seconds; and ensuring that meat is thoroughly cooked.

    It is recommended to try and avoid close personal contact with people with a recent travel history from the countries, included: China, South Korea, Italy, Japan and Iran.

    Testing: The ministry of national health services, Islamabad has procured testing kits for Coronavirus and provided the same to various laboratories across Pakistan. Following places are recommended for testing of Coronavirus:

    National Institute of Health, Islamabad (free of cost)

    Shaukat Khanum Labs (Across Pakistan)

    Agha Khan Labs (Across Pakistan)

    Dow University of Health Sciences, Karachi.

    General instructions to Heads of field formations:

    Foregoing in view, heads of all field formations are requested to ensure:

    Display of precautionary measures including the causes, symptoms and prevention for Coronavirus at conspicuous places;

    Placement of alcohol-bases hand sanitizers at all places of public interaction, both for FBR employees and general public;

    Wearing of facemasks at all places of public interaction;

    Use of disinfectants to wipe surfaces (Desks, tables and counters etc.) and objects (telephones and keyboards etc.) of common use on daily basis.

    Reference to travel advisory before proceeding abroad on official work;

    Politely discourage personal greetings in form of hugs and handshakes

    Discontinuation of biometric attendance till culmination of Coronavirus threat.