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Author: Mrs. Anjum Shahnawaz

FBR reorganizes DG transit trade; authorizes tracking of NATO, ISAF cargo

ISLAMABAD: Directorate General of Transit Trade has been authorized to track cargo movement of Afghan transit, NATO/ISAF and transshipment in order to avoid incidence of en-route goods slippage.

Federal Board of Revenue (FBR) on Wednesday issued SRO 609(I)/2020 for reorganization of the Directorate General of Transit Trade.

The FBR said that the directorate shall be based at Custom House, Karachi, assisted by Director, Directorate of transit Trade (HQ), Karachi.

The directorate general shall have its regional offices at Karachi, Gwadar, Quetta, Peshawar, Gilgit-Baltistan and Lahore. The director general shall report to the Member (Customs), FBR.

The directorate general of transit trade shall be responsible for enforcement of all the international agreements, treaties, conventions, domestic laws, rules and procedures relating to transit trade with reference to cross border movement of bonded cargo and domestic laws, rules and procedures relating to transshipment with reference to inland movement of bonded cargo and shall also be responsible for enforcement of laws, rules and procedures relating to international transshipment, through the respective directorates and collectorates.

The directorate general shall also supervise functioning of the directorates, furnish policy input to the FBR on matters relating to transit trade and transshipment and maintain liaison with all stakeholders.

The Director, Directorate of Transit Trade (HQ) Karachi shall have jurisdiction over all customs matters relating to transit, transshipment and allied functions in respect of the national territory of whole of Pakistan covering the following functions and customs matters:

(i) Project Director in terms of SRO 4139i0/2012 dated April 25, 2012.

(ii) Supervision of tracking and monitoring across the national territory through the Central Control Room (CCR), established at Custom House, Karachi, in coordination with Regional Control Rooms (RCRs) established at respective directorates of transit trade of the following cargo:

(a) Transit cargo;

(b) POL products exported to Afghanistan;

(c) US or NATO or ISAF cargo;

(d) Transshipment cargo;

(e) Safe transportation cargo;

(f) EPZ/SEZ/Free Zones cargo;

(g) Manufacturing bonds exports cargo;

(h) Export oriented units exports cargo;

(i) Transportation of imported liquid bulk cargo for exclusive use of ISAF/NATO forces in Afghanistan.

(iii) Administration, budgeting and supervision of the Mobile Enforcement Units (MEUs) deployed at Transit Monitoring Response Centers (TMRCs) across the country;

(iv) Sealing of cargo at Karachi sea ports and Port Qasim with respect to the following cargo:

(a) Transit cargo;

(b) POL products exported to Afghanistan;

(c) US or NATO or ISAF cargo;

(d) Transshipment cargo;

(e) Safe transportation cargo;

(f) EPZ/SEZ/Free Zones cargo

(g) Manufacturing bonds exports cargo;

(h) Export oriented units exports cargo;

(i) Transportation of imported liquid bulk cargo for exclusive use of ISAF / NATO forces in Afghanistan.

(v) Licensing of tracking companies in terms of SRO 413(I)/2012 dated April 25, 2012;

(vi) Development, supervision and maintenance of transit trade facilitation portal including coordination with the relevant stakeholders.

(vii) Development, supervision and updation of Risk Management System (RMS) through the local committee constituted for transit and transshipment RMS, including coordination with the relevant stakeholders;

(viii) Association in development, updation and enhancement of MIS function;

(ix) Personal management;

(x) Coordination with all stakeholders for operational purposes;

(xi) Business process re-engineering;

(xii) Transit trade facilitation and redressal of complaints; and

(xiii) Any other function assigned by the FBR from time to time.

July 16, 2020
OICCI members pay one third of total tax collection

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) said that the foreign investors operating in Pakistan and multinational companies (MNCs) have contributed around 1/3^rd of the total tax collection by Federal Board of Revenue (FBR) during fiscal year 2019/2020.
(more…)

July 15, 2020
Stock market slides after 13 consecutive positive sessions

KARACHI: The stock market fell by 66 points on Wednesday owing to profit taking after 13 consecutive positive sessions, analysts said.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,679 points as against 36,745 points showing a decline of 66 points.

Analysts at Arif Habib Limited said that the market opened on a positive note today with +106 points and gained a total of 146 points during the session, however, profit booking caused the index to slide.

PPL again showed high volumes and closed the session slightly below VWAP. Majority of the crosses were observed at 97.50. O&GMCs, Fertilizer, Steel and Pharma saw profit booking in general.

Cement sector topped the volumes with 54 million shares, followed by Banks (34.5 million) and Technology (34 million).

Among scrips, MLCF realized 33 million shares, followed by PAEL (27 million) and UNITY (21.7 million).

Sectors contributing to the performance include E&P(+17 points), Tobacco (+16 points), O&GMCs (-30 points), Inv Banks (-24 points), Fertilizer (-24 points), Banks (-23 points).

Volumes further declined to 328.4 million shares as against 466.2 million shares (-30 percent DoD). Average traded value declined by 23 percent to reach US$ 84.9 million as against US$ 109.5 million.

Stocks that contributed significantly to the volumes include MLCF, PAEL, UNITY, PPL and TRG, which formed 30 percent of total volumes.

Stocks that contributed positively to the index include PAKT (+16 points), PPL (+15 points), HUBC (+13 points), INDU (+11 points) and POL (+10 points). Stocks that contributed negatively include DAWH (-21 points), SNGP (-19 points), MTL (-16 points), MEBL (-13 points), and FFC (-10 points).

July 15, 2020
Pakistan, Hungary sign treaty for exchange of information

ISLAMABAD: Pakistan and Hungary have signed a treaty for exchange of information under newer version of protocol of avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, a statement issued by Federal Board of Revenue (FBR) said on Wednesday.

Hungarian Ambassador to Pakistan Istvan Szabo signed the Protocol on behalf of Government of Hungary, while Dr. Muhammad Ashfaq Ahmed, Member (Inland Revenue Operations)/Additional Secretary inked it on behalf of Pakistan.

The Article 27 of the Convention deals with Exchange of Information. Organization for Economic Cooperation and Development (OECD) approved changes in the Article on Exchange of Information in July 2012 to include provisions concerning cooperation between the tax administrations of the two Contracting States.

The present article embodies the rules under which information may be exchanged to the widest possible extent to include taxes other than the income tax.

Therefore, to incorporate the latest standard of administrative assistance in the extant Convention, Pakistan and Hungary decided to replace the Article on Exchange of Information with the new version through Protocol.

The new Article on exchange of information provides that the competent authorities of the Contracting States shall exchange such information that will not be restricted by Article 1 & 2 of the Convention and no state shall decline to provide information merely for the reason that such information is of no interest to it, or because the information is held by a bank, other financial institution or nominee or a person acting in an agency or fiduciary capacity.

According to the new version of the Article, the Contracting States shall exchange such information on request as is foreseeably relevant for carrying out of provisions of the convention or to the administration or enforcement of the domestic tax laws of the requesting state.

July 15, 2020
SBP fixes mandatory housing loan targets for banks

KARACHI: State Bank of Pakistan (SBP) on Wednesday fixed mandatory targets of housing loan disbursement for banks in order to promote housing and construction of buildings in the country.

The central bank in a notification said that with a view to promote housing and construction of buildings (Residential and Non-Residential) in Pakistan, the SBP decided to advise mandatory targets to the banks.

“Accordingly, each bank shall ensure that the financing for housing and construction of buildings (Residential and Non-Residential) shall be at least 5 percent of their domestic private sector credit by December, 2021,” the notification stated.

The banks are advised to gear up their infrastructure and capacity to ensure compliance of meeting these targets.

Accordingly, each bank is required to develop a concrete action plan with detailed measures and their timelines to achieve its housing and construction finance targets.

This action plan should contain breakdown of overall targets into quarterly targets, development of suitable products, launching of media campaigns, development of internal technology, capacity building of staff, and other actions needed to ensure the 5 percent target is met.

The SBP directed the banks to submit their concrete action plans to this department within 15 working days.

Banks will be required to report data of approvals and disbursements against these targets on monthly basis starting from September 2020.

The central bank said that it will keep a close monitoring of progress on the mandatory targets. Non-compliance in meeting the targets shall attract punitive action under the relevant provisions of the Banking Companies Ordinance, 1962.

July 15, 2020
Rupee ends firmer on improved inflows

KARACHI: The Pak Rupee ended firmer against dollar on Wednesday as stock of foreign currency was sufficient to meet import payment demand.

The rupee ended Rs166.67 to the dollar from the previous day’s close of Rs166.68 in interbank foreign exchange market.

Currency experts said that the inflows of dollars were sufficient to meet the demand for import and corporate payments.

They said that the improved inflows of remittances and lower import payments had helped the rupee to maintain levels.

State Bank of Pakistan (SBP) has said that the workers’ remittances rose by a significant 50.7 percent during June 2020 to reach monthly record high $2.46 billion compared with $1.63 billion in June 2019.

Similarly, on a cumulative basis, workers’ remittances increased to a historic high level of $23.12 billion during FY20, witnessing a growth of 6.4 percent over $21.74 billion during FY19.

According to Pakistan Bureau of Statistics (PBS) the import bill of the country fell by 18.6 percent to $44.57 billion as compared with $54.76 billion in the preceding fiscal year.

This helped the country to curtail the trade deficit for the year. The trade deficit of the country shrank by 27 percent to $23.18 billion during fiscal year 2019/2020 as compared with the deficit of $31.8 billion in the preceding fiscal year.

July 15, 2020
Sindh launches application for agriculture income tax calculation

KARACHI: The Board of Revenue, Sindh has launched an application for calculation of agriculture income tax and issuance of sales certificate.

A statement on Tuesday said that the BOR Sindh launched revenue applications for facilitating general public for issuance of sales certificate and calculation of agricultural income tax.

The applications are available of the website www.sindhzameen.gos.pk and are available from July 11,2020, in addition to the manual system of issuance of sale certificates and assessment of AIT.

July 15, 2020
FBR to prescribe valuation method for used vehicles

ISLAMABAD: Federal Board of Revenue (FBR) will prescribe method for valuation of used vehicles for the purpose of sales tax.

FBR sources said that amendment has been made to Sales Tax Act, 1990 through Finance Act, 2020 related to value of supply of used vehicles.

According to the amendment, in case of registered person who is engaged in purchasing used vehicles from general public on which sales tax had already been paid at the time of import or manufacturing, and which paid at the time of import or manufacturing, and which are, later on, sold in the open market after making certain value addition, value of supply will be difference between sale and purchase price of the said vehicles on the basis of the valuation method prescribed by the board [FBR].

July 15, 2020
NBMFCs borrowers reschedule loans worth Rs36bn: SECP

ISLAMABAD: The Non-bank Microfinance Companies (NBMFCs) have reschedule loans of worth Rs36billion of total 2,244,605 individuals and micro-enterprises as of June 30, 2020, Securities and Exchange Commission of Pakistan (SECP) said on Tuesday.

The SECP said that it had relaxed the regulatory requirements for non-bank finance sector allowing them to defer or reschedule the loan repayments of their borrowers during COVID-19 pandemic.

Out of these, 1,379,330 borrowers were facilitated through deferment of principal repayments of Rs27.778 billion by twelve NBMFCs, while 865,275 borrowers benefited through rescheduling of loans of 7.998 billion rupees by nine NBMFCs.

The SECP has already extended the time by three months for NBMFCs to accept deferment requests of borrowers till September 30, 2020.

Earlier, the SECP had urged the NBMFCs to adopt a considerate approach to accommodate their borrowers who belong to unprivileged segments of the society.

The SECP had also allowed NBMFCs to accept borrowers requests made through electronic means or phone calls. It is part of SECP’s efforts to provide relief for mitigating adverse effects of COVID-19 pandemic that has resulted in slowdown in business and livelihood activity.

July 14, 2020
Excessive Billing: NEPRA asked to conduct detailed audit of K-Electric

KARACHI: Sindh Governor Imran Ismail on Tuesday asked National Electric Power Regulatory Authority (NEPRA) to conduct detailed audit of K-Electric as many complaints were received related to excessive billing.

In a letter to Tauseef H Farooqi, Chairman, NEPRA, the Sindh governor said that on a daily basis, a large section of society was complaining against K-Electric (KE) authorities for multiple issues, one out of them is excessive billing. Unfortunately, KE-being the sole electricity provider to Karachi City has an obvious monopolistic approach towards its consumers.

“It becomes a nightmare for a common person, when he receives an exaggerated bill from KE, as there is a general perception that such situation has no remedy,” according to the letter.

As a matter of fact, KE instead of giving people relief against their complaints, advise them to pay the billed amount first (to avoid disconnection of electricity) and then wait for what KE decides upon their complaints.

It is pertinent to add that these complaints are not limited with domestic consumers only, commercial and industrial consumers are also facing similar approach from KE, and voicing against excessive billing at different forum.

The Sindh governor proposed that the NEPRA to accord instructions for conducting a thorough audit of complaints lodged against KE for excessive billing.

“And those which are found valid, be refunded their excessive paid amount instantly,” according to the letter.

July 14, 2020