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Author: Mrs. Anjum Shahnawaz

  • CAA allows six charter flights on US embassy request

    CAA allows six charter flights on US embassy request

    KARACHI: The ministry of foreign affairs has allowed six private charter flights by the US Embassy to airlift passengers in the wake of coronavirus outbreak.

    According to an approval letter issued by the Pakistan Civil Aviation Authority (CAA) stated that the request of US Embassy had been approved by the competent authority to operate six special flights i.e. Sofia-Islamabad-Sofia through Omni Air incoming on April 21, 2020, Sharjah-Islamabad-Frankfurt through Atlas Air on April 22, 2020, Sofia-Islamabad-Sofia and Sofia-Karachi-Sofia through Omni Air on April 23, 2020 on April 25, 2020.

    The CAA said that the permission is subject to the condition that no disembarkation of flight crew shall be permitted from the aircraft upon arrival at both Islamabad International Airport, Islamabad and Jinnah International Airport, Karachi.

    The permission is also subject to full compliance with revised operational standard operating procedures issued through letter dated April 18, 2020 related to international passenger/charter flights.

  • New fixed tax regime for builders and developers

    New fixed tax regime for builders and developers

    KARACHI: The government has launched the incentive package for construction industry and introduced a fixed tax regime for builders and developers.

    The Federal Board of Revenue (FBR) issued Tax Laws (Amendment) Ordinance, 2020, which was promulgated through presidential order to amend Income Tax Ordinance, 2001 in order to provide tax incentives.

    According to commentary on the new ordinance issued by PWC A F Ferguson Chartered Accountants a new provision section 100D has been introduced in the Income Tax Ordinance, 2001, prescribing a scheduler based fixed tax regime for Builders and Developers on the basis of project area in respect of their income from sale of building or sale of plots, for tax year 2020 and onwards.

    Necessary rules to that effect have been enacted by way of insertion of Eleventh Schedule to the Ordinance.

    Similar to other scheduler based taxation provisions, all other provisions of the Ordinance (including recovery of tax not paid and matters connected therewith) not specifically covered under section 100D and Eleventh Schedule will remain applicable on Builders and Developers.

    A similar fixed tax regime for builders and developers whereby tax was payable on the basis of area was also introduced though Finance Act, 2016 by way of sections 7C and 7D of the Ordinance, which was subsequently restricted through Finance Act, 2017 to only such Projects, which were initiated and approved during tax year 2017.

    As such, builders and developers not covered by sections 7C and 7D were required to pay tax on net income basis.

    The provisions of section 100D read with Eleventh Schedule to the Ordinance are applicable to all Builders and Developers, who opts for such taxation and are registered with the Federal Board of Revenue (FBR) on a Project-by-Project basis (hereinafter referred to as ‘eligible project/project’ as the context so requires).

    For the eligible projects, the builder or developer will pay tax on the income from the sale of buildings or sale of plots, as the case may be, in respect of:

    (a) a new project to be completed by September 30, 2022; or

    (b) an incomplete existing project to be completed by September 30, 2022.

    However, income, profits and gains earned up to tax year 2019 from incomplete existing projects will remain subject to the provisions of the Ordinance before the commencement of the Amendment Ordinance.

    Any income of the builder or developer other than income subject to special tax regime of the Eleventh Schedule shall be subject to tax as per normal provisions of the Ordinance.

    Computation of income and annual tax payable thereon at the fixed rates under the regime is to be made on a Project-by-Project basis as Final Tax.

    Such income, being subject to final tax regime, shall not be chargeable to tax under any head of income in computing the taxable income.

    No deduction for any expenditure, deductible allowance or set-off of any loss will be allowed. Tax credits are also not allowed against tax payable except for tax collected from the builder or developer under section 236K of the Ordinance after the commencement of the Amendment Ordinance on purchase of immovable property utilized in eligible projects. No refund of any taxes suffered is allowed.

  • Share market plunges by 1077 points as energy scrips crash

    Share market plunges by 1077 points as energy scrips crash

    KARACHI: The share market plunged by 1,077 points on Tuesday as energy scrips saw lower circuit breakers following massive decline in international oil prices.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,422 points as against 33,500 points showing a decline of 1077 points.

    Analysts at Arif Habib Limited said that the market opened in negative 478 points today and continued the descent throughout the session, which extended to negative 1077 points by the end of session.

    Concerns raised by IMF over G20 debt relief, announced last week by the Government, as well as hinting higher than expected inflation with a caution over the Policy rate cut caused the market to panic.

    In addition, onslaught on WTI and Brent prices in the international market kept the bears active in Oil & Gas scrips, which saw OGD, PPL, POL, PSO, HASCOL on lower circuit breakers by the end of session.

    Banking sector stocks also adjusted downward by close. Cement sector saw an initial selling pressure, but rallied on the hint of Cement prices to be increased in the coming days.

    Nonetheless, overall negative sentiment couldn’t save Cement sector stocks from selling pressure. Cement sector garnered 151.3 million shares in trading volumes, followed by O&GMCs (28.6 million) and Technology (21.4 million).

    Among scrips, MLCF realized 39.6 million shares, followed by FCCL (35.5 million) and HASCOL (23 million).

    Sectors contributing to the performance include E&P (-288 points), Fertilizer (-175 points), Power (-136 points), Banks (-124 points) and O&GMCs (-106 points).

    Volumes declined from 399.9 million shares to 339.2 million shares (-15 percent DOD). Average traded value also declined by 12 percent to reach US$ 95.5 million as against US$ 106.2 million.

    Stocks that contributed significantly to the volumes include MLCF, FCCL, HASCOL, DGKC and PIOC, which formed 41 percent of total volumes.

    Stocks that contributed positively to the index include EFERT (+24 points), KOHC (+13 points), CHCC (+12 points), PAKT (+11 points) and BAHL (+11 points). Stocks that contributed negatively include ENGRO (-129 points), HUBC (-114 points), OGDC (-98 points), PPL (-94 points), and FFC (-62 points).

  • Rupee makes sharp gain of Rs2.36 against dollar

    Rupee makes sharp gain of Rs2.36 against dollar

    KARACHI: The Pak Rupee sharply gained against dollar by Rs2.36 on Tuesday owing to massive decline in international oil prices.

    The rupee ended Rs161.13 to the dollar from previous day’s closing of Rs163.49 in interbank foreign exchange market.

    Currency experts said that positive sentiments prevailed in the market owing to significant decline in international oil prices which would help reduction in Pakistan’s oil import bill.

    They said that Pakistan is net importer of international crude oil and finished petroleum products.

    Besides they said that the rupee continued gain against dollar as the State Bank of Pakistan (SBP) last week cut policy rate by 200 basis points to nine percent.

    The central bank reduced the policy rate third time in last one month considering significant adverse effect of coronavirus on the economy,

    Meanwhile last week the Executive Board of the International Monetary Fund (IMF) a day earlier approved the disbursement of $1.386 billion under the Rapid Financing Instrument to address the economic impact of the Covid-19 shock.

    The currency dealers said that the rupee may witness further appreciation in coming days due to falling international oil prices and reduction in non-oil imports.

  • Commission constituted to review salary, perks of government employees

    Commission constituted to review salary, perks of government employees

    ISLAMABAD: The federal government has constituted a pay and pension commission to review existing salary and perks.

    According to the finance ministry, the government of Pakistan had constituted a Pay and Pension Commission, with effect from 14-04-2020.

    The Composition of the Commission shall be as follows:

    Mr. Wajid Rana, Former Federal Secretary, Chairman.

    Mr. Nazar Hussain Mahar, Retired Civil Servant, Member.

    Dr. Noor Alam, Retired Civil Servant, Member.

    Ms. Seema Kamil, President, United Bank Limited, Karachi, Member.

    Mr. Zubyr Soomro, Chairman, Board of Directors, National Bank of Pakistan, Member.

    Ms. Nausheen Ahmed, Company Secretary, ICI (Pakistan) Limited, Member.

    MEMBERS EX-OFFICIO

    Secretary, Finance Division, Government of Pakistan, Member.

    Secretary, Establishment Division, Government of Pakistan, Member.

    Secretary, Defence Division, Government of Pakistan, Member.

    Secretary, Finance Department, Government of Punjab, Member.

    Secretary, Finance Department, Government of Khyber Pakhtunkhwa, Member.

    Secretary, Finance Department, Government of Sindh, Member.

    Secretary, Finance Department, Government of Balochistan, Member.

    Secretary, Finance Department, Government of AJ&K, Member.

    Secretary, Finance Department, Government of Gilgit Baltistan, Member.

    An Officer of BS-21 of the Auditor, General of Pakistan, Government of Pakistan, Member.

    An Officer of BS-21, Controller General of Accounts, Government of Pakistan, Member.

    Joint Secretary (Regulations), Finance Division, Government of Pakistan, Member/Secretary.

    The terms of Reference of the commission are as following.

    i) PAY & ALLOWANCES

    a) Study the adequacy of existing Basic Pay Scale System and to evaluate the current salaries of Government employees throughout the federation including the provincial government and recommend measures for its improvement and uniformity. Also make recommendations for the streamlining of existing classification from BPS 1-22.

    b) Study the separations of existing Basic Pay Scales for specialized departments/occupations/cadres.

    c) Review of Special Scales such as Management Grades, Management Position Scales (MP Scales), Special Professional Pay Scales (SPPS), Project Pay Scales etc. and propose measures for uniformity and improvement.

    d) Review of admissible Regular allowance, Special incentives and all other allowances with a view to highlight prevalent distortions and recommend corrective measures.

    e) Review of existing perks and facilities and make recommendations, including possibility of their monetization.

    1)  PENSION

    To Review the Pension system of the Government of Pakistan:

    A) Highlight existing distortions and anomalies in the Pension Scheme and recommend remedial measures. Verify the sustainability of the current model after critically evaluating future liabilities through an actuarial study.

    B) Evaluate alternate system of Pension like defined contribution and setting up of pension funds in light of international best practices and recommend a system with clear timelines that is more efficient and sustainable, considering the available recourses.

    iii) To Review the existing incentive regime (honorarium and special rewards) and recommend improvement in it.

    iv) To evaluate and recommend legislative measures to protect and streamline Pay, Pension and Allowances regime for government employees.

    v) The Commission may, if so desired by the Government, make interim recommendation to provide interim relief, pending the submission of its final report.

    vi) The Commission shall have power to co-opt any person or agency to assist it in its deliberations>

    vii) The Finance Division shall provide Secretariat support to the Commission and the Commission shall make its recommendations within 6 Months of its constitution. While formulating its proposal/recommendations on the above terms of reference, the pay and pension commission would take into consideration the financial recourses of the Government.

    The scope of work of the Commission will include Federal and Provincial civil servants, other government servants, civilians paid from defence estimates, all Armed Forces/Civil Armed Forces personnel and holders of the posts in Management Scales and employees of such Public sector corporations/autonomous/semi-autonomous bodies, other than Banks and DFIs, which have adopted the scheme of Basic Pay Scales in toto.

    Employees of Public Sector Corporations/Autonomous/Semi-Autonomous bodies who are regulated under the Pay Scales prescribed by these organizations and the employees governed under the Industrial Relations Ordinance, 1969 and/or whose financial terms of service are settled through Collective Bargaining Agents, are executed from the scope of work of the Pay & Pension Commission.

  • Capital value tax on share purchase abolished

    Capital value tax on share purchase abolished

    KARACHI: The government has abolished Capital Value Tax (CVT) on purchase value of any instrument of redeemable capital, Pakistan Stock Exchange (PSX) informed to all members of the exchange.

    The PSX informed all TREC Holders and shareholders that the Tax Laws (Amendment) Ordinance, 2020 has been published through which the said amendment ordinance, sub-section (1) of Section 7 of the Finance Act, 1989 has been ceased to apply from the date of commencement of the said Amendment Ordinance i.e. April 19, 2020.

    “Therefore, no capital value tax (CVT) is payable to federal government on purchase value of modaraba certificates or any instrument of redeemable capital as defined in the Companies Ordinance, 1984 (no Companies Act, 2017) or a shares of a public company, listed on a registered stock exchange in Pakistan with effect from April 19, 2020.”

  • Illicit money given amnesty through package to construction industry

    Illicit money given amnesty through package to construction industry

    ISLAMABAD: The government has given an amnesty to illicit money in case of investment made into to construction industry as no question of money to be asked under Income Tax Ordinance, 2001.

    Federal Board of Revenue (FBR) on Monday issued the Tax Laws (Amendment) Ordinance No.1 of 2020 after the approval from the president.

    The ordinance says that it was being promulgated, “whereas, the COVID-19 pandemic has created a worldwide crisis due to which industries, businesses, offices, service has been shut down in Pakistan and economic activity is at a standstill.”

    “And whereas, in order to protect and revive the economy of Pakistan, it is essential and critical to give incentives for revival of the construction industry with certain conditions as provided for in this ordinance.”

    Amendment has been made to Income Tax Ordinance, 2001 under which Section 111 shall not apply to the first purchaser of a building or a unit and capital investment made in a new project in the form of money or land.

    Section 111 of the Ordinance deals with concealed or undeclared money whereas harsh penalties under the ordinance have been outlined for undeclared money.

    According to the sub-Section 3 of Tax Laws (Amendment) Ordinance No.1 of 2020, the provisions of Section 111 shall not apply to capital investment made in a new project in the form of money or land, subject to following conditions, namely:

    (a) if the investment is made by a builder or developer being an individual –

    (i) in the form of money, such builder or developer shall open a new bank account and deposit such amount in it on or before the 31st day of December 2020; or

    (ii) in the form of land, such builder or developer shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020;

    (b) if the investment is made by a person in a project through a company or an association of persons;

    (i) such company or association of persons shall be single object (builder or developer) company or association of persons registered under the Companies Act, 2017 or the Partnership Act, 1932, as the case may be, after the date of commencement of the Tax Laws (Amendment) Ordinance, 2020 and on or before the 31st day of December, 2020; and

    (ii) the person shall be a member or shareholder of such association of persons or company, as the case may be;

    And if the capital investment is made,

    (i) in the form of money, such amount shall be invested through a crossed banking instrument deposited in the bank account of such association of persons or company, as the case may be, on o before the 31st day of December, 2020; or

    (ii) in the form of land, such land shall be transferred to such association of persons or company, as the case may be, on or before the 31st day of December 2020;

    Provided that the person shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020;

    (c) a person making an investment under the ordinance shall submit a prescribed form on IRIS web portal;

    (d) a person making an investment shall be wholly utilized in project; and

    (e) completion of the project shall be certified in the following manner, namely:

    (i) in case of a builder, the map approving authority or NESPAK shall certify that grey structure as per the approved map has been completed by the builder on or before the 30th day of September 2022; and

    (ii) in case of a developer

    (A) the map approving authority or NESPAK shall certify that landscaping has been completed on or before the 30th day of September 2022;

    (B) a firm of chartered accountants having an ICAP QCR rating of ‘satisfactory’, notified by the Board for this purpose, shall certify that at least 50 percent of the plots have been booked for sale and at least 40 percent of the sale proceeds have been received by the 30th day of September, 2020; and

    (C) at least 50 percent of the roads have been laid up to sub-grade level as certified by the approving authority or NESPAK.

    The sub-Section 4 of the latest ordinance said that the provisions of Section 111 shall also not apply to-

    (a) the first purchaser of a building or a unit of the building purchased from the builder in respect of purchase price of the building or unit of the building subject to the following conditions, namely:

    (i) full payment is made through a crossed banking instrument to the builder during a period starting from the date of registration of the project with the board under this section and ending on the 30th day of September 2022, in case the purchase is from a new project; and

    (ii) full or balance amount of payment is made through a crossed banking instrument to the builder during a period starting from the date of registration of the project with the board under this section and ending on the 30th day of September 2022, in case the purchase is from an existing incomplete project; and

    (b) the purchaser of a plot who intends to construct a building thereon, if

    (i) the purchase is made on or before the 31st day of December 2020;

    (ii) the full payment is made on or before the 31st day of December, 2020 through a crossed banking instrument;

    (iii) construction of such plot is commenced on or before the 31st day of December 2020.

    (iv) such construction is completed on or before the 30th day of September 2022; and

    (v) the person registers himself with the board on the online IRIS web portal.

    The sub-Section 5 of the latest ordinance said that sub-Section (3) or (4) apply, the value or price of land or building, as the case may be, shall be higher of clause (a) or (b) below:

    (a) 130 percent of the fair market value as determined by the board under sub-section (4) of Section 68; or

    (b) at the option of the person making investment, the lower of the values as determined by at least two independent valuers from the list of valuers approved by the State Bank of Pakistan.

    Sub-Section 6 of the ordinance stated that Sub-Section (3) and (4) shall not apply to –

    (a) holder of any public office as defined in the Voluntary Declaration of Domestic Assets Act, 2018 or his benamidar as defined in the Benami Transactions (Prohibition) Act, 2017 or his spouse or dependents;

    (b) a public listed company, a real estate investment trust or a company whose income is exempt under any provision of the ordinance; or

    (c) any proceeds derived from the commission of a criminal offence including the crimes of money laundering extortion or terror financing but excluding the offences under the ordinance.

  • Ramazan office timings announced

    Ramazan office timings announced

    ISLAMABAD: The Establishment Division on Monday issued office timings during the holy month of Ramazan.

    The following timings shall be observed, during the forthcoming holy month of Ramazan by the federal government offices working on five/six days:

    Office working on five days a week

    Monday to Thursday: From 10:00 AM to 04:00 PM

    Friday: From 10:00 AM to 01:00 PM

    Offices working on six days a week:

    Monday to Thursday and Saturday: 10:00 AM to 03:00 PM

    Friday: 10:00 AM to 01:00 PM

  • Stock market gains 668 points as positive sentiments prevail

    Stock market gains 668 points as positive sentiments prevail

    KARACHI: The stock market gained 668 points on Monday as sentiments were remained positive on rate cut and disbursement of IMF loan program.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,500 points as against 32,832 points showing an increase of +668 points.

    Analysts at Topline Securities said that cut in policy rate by 200 basis points to 9 percent and approval by IMF Executive Board to disburse US$1.386 billion through Rapid Financing Instrument (RFI) to Pakistan continue to garner investor interest in the market.

    Analysts at Arif Habib Limited said that the market continued the ascend today after posting the historical gains on Friday, when the market witnessed halt due to 5 percent cap on index.

    Market went up by 1026 points during the session and saw profit booking earlier in the session that brought the gains below +300 points.

    Cement sector again traded mostly on upper circuit and realized high trading volumes. Oil & Gas stocks, with the exception of PSO, saw a dip in prices, primarily on the back of international crude prices.

    WTI May contract saw a downtrend in price and declined to US$13.27/bbl post closure of PSX market. Banking sector stocks also managed to post gains over last closing.

    Cement sector contributed the most to the trading volumes by realizing 115.8 million shares, followed by Technology (33.4 million) and O&GMCs (32 million).

    Among scrips, MLCF topped the volumes with 39.6 million shares, followed by FCCL (35.5 million) and HASCOL (23 million).

    Sectors contributing to the performance include Fertilizer (+220 points), Cement (+183 points), Banks (+97 points), O&GMCs (+43 points) and Power (+40 points).

    Volumes increased significantly from 302.4 million shares to 399.9 million shares (+32 percent DoD). Average traded value also increased by 100 percent to reach US$ 106.2 million as against US$ 52.6 million.

    Stocks that contributed significantly to the volumes include MLCF, FCCL, HASCOL, UNITY and KEL, which formed 32 percent of total volumes.

    Stocks that contributed positively to the index include ENGRO (+155 points), LUCK (+91 points), FFC (+70 points), HUBC (+46 points) and HBL (+33 points). Stocks that contributed negatively include PAKT (-16 points), EFERT (-12 points), PPL (-11 points), PMPK (-11 points), and KAPCO (-7 points).

  • FBR promotes 35 DEOs to MIS Officer BS-16

    FBR promotes 35 DEOs to MIS Officer BS-16

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified promotions of 35 Data Entry Operators (BS-14) to the post of MIS Officer (BS-16) on regular basis with immediate effect.

    The following officers have been promoted to the post of MIS Officers:

    01. Agha Zafar Ullah, Regional Tax Office, Sukkur

    02. M Latif Awan, Data Processing Center (Income Tax), Karachi.

    03. Tanveer Ahmed Awan, Large Taxpayers Unit, Karachi.

    04. Mirza Adnan Baig, Corporate Regional Tax Office, Karachi.

    05. Amanullah Khan, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    06. Muhammad Asim Bashir, Large Taxpayers Unit, Lahore.

    07. Syed Hassan Riaz, Data Processing Center (Income Tax), Lahore.

    08. Waseem Shafiq, Data Processing Center (Income Tax), Karachi.

    09. Kamran Sabir, Regional Tax Office, Quetta.

    10. Irshad Hussain, Regional Tax Office-III, Karachi.

    11. Muhammad Ayub, Data Processing Center (Income Tax), Karachi.

    12. Muhammad Mukarram, Data Processing Center (Income Tax), Karachi.

    13. Nahid Sultana, Data Processing Center (Income Tax), Karachi.

    14. Rashid Ishaq, Regional Tax Office, Faisalabad.

    15. Mst. Abida Aslam Rathore, Directorate of Research and Statistics, Islamabad.

    16. Muhammad Riaz, Corporate Regional Tax Office, Lahore.

    17. Muhammad Nisar, Data Processing Unit (Income Tax), Gujranwala.

    18. Danish Muhammad Khan, Large Taxpayers Unit-II, Karachi.

    19. Tasadduq Hussain, Regional Tax Office, Islamabad.

    20. Rashid Maqbool, Large Taxpayers Unit, Lahore.

    21. Furqan Khan, Large Taxpayers Unit, Lahore.

    22. Asif Mehmood, Data Processing Center (Income Tax), Lahore.

    23. Nisar Rasheed, Data Processing Center (Income Tax), Lahore.

    24. Agha Mehboob Abbas, Regional Tax Office, Rawalpindi.

    25. Kh, Altaf ur Rehman, Data Processing Unit (Income Tax), Multan.

    26. Yaseen Panhwar, Regional Tax Office, Hyderabad.

    27. Shah Qaiser Sheikh, Regional Tax Office-II, Lahore.

    28. Faiz Hussain Qureshi, Corporate Regional Tax Office, Lahore.

    29. Tariq Javed Khan Niazi, Corporate Regional Tax Office, Lahore.

    30. Muhammad Sohail, Large Taxpayers Unit, Lahore.

    31. Javed Rashid, Corporate Regional Tax Office, Lahore.

    32. Abdul Waheed, Large Taxpayers Unit, Lahore.

    33. Tahir Ali Khan, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    34. Khalid Mehmood S/o Muhammad Qasim, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    35. Tajamal Abbas, Reginoal Tax Office, Faisalabad.

    The FBR said that the officers would be on probation for a period of one year, extendable for a further period not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall be deemed to be held until further orders.

    The officers already drawing performance allowance equal to 100 percent of the basic pay will continue to draw the same on their promotion.

    The FBR congratulates the officers on their promotion.