KARACHI: State Bank of Pakistan (SBP) on Thursday revised timings for banks and microfinance banks to be observed from July 13, 2020.
(more…)Author: Mrs. Anjum Shahnawaz
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SBP asks banks not to accept institutional investment in saving schemes
KARACHI: State Bank of Pakistan (SBP) on Thursday informed banks about restriction imposed on institutional investment in saving schemes.
The central bank said that the Central Directorate of National Savings (CDNS) on July 01, 2020 restricted participation of institutional investors in national saving schemes.
In this connection, the SBP advised all authorized commercial banks to review the instructions contained in the above mentioned letters and ensure that no institutional investment of any kind should be accepted in National Savings Schemes (NSS) dealt by banks i.e. Special Savings Certificate (SSC) / Defence Savings Certificate (DSC) on or after July 01, 2020.
The SBP asked the banks to disseminate necessary instructions down the line to all authorized branches and concerned officials for information and strict compliance.
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Fee for filing tax appeals increased substantially
ISLAMABAD: A substantial increase has been made to fee amount for filing appeal against an assessment order. The increase has been made part of statute through Finance Act, 2020.
Officials at Federal Board of Revenue (FBR) said that an amendment to sub-section 4 of the Section 127 of Income Tax Ordinance, 2001 has been made through Finance Act, 2020. Prior to this amendment the fee amount of Rs1,000 was prescribed for all taxpayers for filing appeal.
However, through the amendment the prescribed fee shall be Rs5,000 in case of company and Rs2,500 in case of other than a company.
The fee for filing appeal in other than assessment cases has also been increased. The fee in case of company has been increased to Rs5,000 from Rs1,000. In case of other than company the fee amount has been increased to Rs1,000 from Rs200.
Another amendment has been made to section 131 of the Income Tax Ordinance, 2001 regarding fee for filing appeal before appellate tribunal.
Prior to the amendment an amount of Rs2,000 was prescribed as fee for filing appeal. However, post amendment the prescribed fee shall be Rs5,000 in case of a company and Rs2,500 in case of other than a company.
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FBR to adopt new measures to achieve Rs4,963 billion collection target
ISLAMABAD: Federal Board of Revenue (FBR) has decided to take new enforcement and administrative measures to achieve revenue collection target of Rs4,963 billion assigned for current fiscal year.
The federal government in the latest budget assigned FBR to collect Rs4,963 billion during 2020/2021, which is 25 percent higher than the collection of Rs3,957 billion collected during 2019/2020.
In order to achieve the revenue collection target of current fiscal year the FBR chairman directed chief commissioners and chief collectors to submit their proposals and suggestions for taking new administrative and enforcement measures.
The FBR sought the proposals for increasing revenues and plugging loopholes.
All chief commissioners and chief collectors have been asked to furnish their proposals by July 15, 2020.
It is worth mentioning that the FBR was assigned Rs5,550 billion revenue collection target during fiscal year 2019/2020 however due to slow economic activities early in the fiscal year and adverse impact on economy due to coronavirus the revenue collection significantly declined.
Later considering the situation the FBR was assigned the reduced collection target of Rs3,907 billion, which was surpassed by more than Rs50 billion.
Despite the achievement of revenue collection target the FBR chairperson Ms. Nausheen Javaid Amjad was removed from the post and Muhammad Javaid Ghani was assigned additional charge of the post of FBR chairman.
Sources in the FBR said that the administrative and enforcement measures would only work when a regular chairman has been appointed.
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Finance ministry issues strategy for release of funds for development budget
ISLAMABAD: The finance ministry on Wednesday issued strategy for release of funds for development budget during fiscal year 2020/2021.
The undersigned is directed to refer to the subject mentioned above and to state that keeping in view the Public Finance Management Act (PFM) Act, 2019, the following strategy for release of funds relating to Development Budget for Financial Year 2020-21 shall be followed with immediate effect and until further orders:-
a) Funds for Development Budget shall be released by Finance Division at the level of 20 percent for the 1st Quarter, 30 percent each for 2nd and 3rd Quarter and 20 percent for 4th Quarter.
b) Ministry of Planning, Development and Special Initiative s shall devise project-wise/Division-wise strategy for release of funds for Public Sector Development Program (PSDP) within the appropriations approved by the National Assembly and included in the Schedule of Authorized Expenditure in terms of Article 83 of the Constitution.
c) All payments shall be made through the pre-audit system of the Accountant General Pakistan Revenue (AGPR)/ Military Accountant General (MAG)/ Accounting Offices/ Sub-Offices, or through Assignment Account procedure issued by the Finance Division. No direct payment through the State Bank of Pakistan shall be made, except with the prior approval of the Finance Secretary.
d) No authority shall incur or commit any expenditure from the “Federal Consolidated Fund” until the same has been sanctioned by the National Assembly and the expenditure has been provided for the financial year through (a) schedule of authorized of expenditure in terms of Article 83 of the Constitution, or (b) supplementary grant or technical supplementary grant as per Article 84 of the Constitution has been approved by the Federal Government, or (c) re-appropriation as per Sections 2(u) and 11 of the Public Finance Management Act, 2019.
e) There shall be no requirement of ways and means clearance from Budget Wing and endorsement of sanction letters by Expenditure Wing, Finance Division for the fund releases for PSDP approved projects.
f) All the sanctions for expenditure (in all forms) shall be issued and entered into SAP system by the Principle Accounting Officers (PAOs) before making payment by the Accounting Offices.
g) AGPR and other Accounting Offices shall not enter the sanction letters issued by the PAO into the SAP system and shall process the payments on verification of budget, fund release and sanction letter.
h) The provisions of Public Finance Management Act, 2019 shall be strictly adhered to by all the PAOs and the Accounting Offices.
i) The instructions with regard to all forms of supplementary grants shall be issued by the Budget Wing, Finance Division, separately.
j) The Development Wing of Finance Division shall coordinate and oversee the matters relating to release of funds for development of budget and other ancillary matters.
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Assessment oversight committees formed to settle taxpayers’ cases
ISLAMABAD: Assessment oversight committees have been formed at all tax offices of Inland Revenue in order to settle the cases of taxpayers in expeditious manner, officials at Federal Board of Revenue (FBR) said.
The committees have been formed following amendment made to Income Tax Ordinance, 2001 through Finance Act, 2020, which was recently approved by the National Assembly.
The committee shall comprise the following tax authorities having jurisdiction over the taxpayer, namely:
(a) the Chief Commissioner Inland Revenue;
(b) the Commission Inland Revenue; and
(c) the Additional Commissioner Inland Revenue.
A new section 122D has been inserted to Income Tax Ordinance, 2001 for agreed assessment in certain cases.
Under this section where as taxpayer, in response to a notice under sub-section of Section 122, intends to settle his case, he may file offer of settlement in the prescribed form before the assessment oversight committee in addition to filing reply to the commissioner.
The committee after examining the offer may call for the record of the case and after affording opportunity of being heard to the taxpayer, may decide to accept or modify the offer of the taxpayer through consensus and communicate its decision to the taxpayer.
Where the taxpayer is satisfied with the decision of the committee:
(a) the taxpayer shall deposit the amount of tax payable including any amount of penalty and default surcharge as per decision of the committee;
(b) the commissioner shall amend assessment in accordance with the decision of the committee after tax payable including any amount of penalty and default surcharge as per decision of the committee has been paid;
(c) the taxpayer shall waive the right to prefer appeal against such amended assessment; and
(d) no further proceedings shall be undertaken under this ordinance in respect of issues decided by the committee unless the tax has not been deposited by the taxpayer.
According to the amendment, where the committee has been able to arrive at the cons or where the taxpayer is not satisfied with the decision of the committee, the case shall be referred back to the commissioner for decision on the basis of reply of the taxpayer in response to notice under section 122 notwithstanding proceedings or decision, if any, of the committee.
This section shall not apply in cases involving concealment of income or where interpretation of question of law is involved having effect on other cases.
Further, the FBR may make rules regulating the procedure of the committee and for any matter concerned with, or incidental to the proceedings of the committee.
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Pak Qatar Family Takaful to offer products, services through digital media
KARACHI: Pak-Qatar Takaful Group has decided to use digital media to offer its products and services in the wake of COVID-19 in order to provide the best possible convenience to its valuable members and customers.
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Stock market gains 322 points on cut in refinance rate
KARACHI: The stock market gained 322 points on Wednesday owing to improved sentiments of investors after reduction in refinance rates announced by the State Bank of Pakistan (SBP).
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 35,695 points as against 35,374 points showing an increase of 322 points.
Analysts at Arif Habib Limited said that the market gained another 330 points during the session and closed near session’s high at +322 points.
Activity was observed almost across the board with Cement and Banks contributing the most. Steel, Pharma, Textile sectors also contributed to the rise.
SBP further reduced the rates for ERF facility to Banks, which improved the sentiment for the business community and indicates lowering of financial charges in FY21.
SBP is also scheduled for an MPC meeting in the ongoing month. Technology sector posted volumes of 67.7 million shares, followed by Cement (44.8 million) and Banks (31.8 million).
Among scrips, TRG topped 38.3 million shares, followed by PAEL (20.5 million) and MLCF (17.5 million).
Sectors contributing to the performance include Banks (+163 points), Autos (+30 points), Technology (+29 points), E&P (+21 points) and Pharma (+19 points).
Volumes declined slightly from 333.8 million shares to 317.7 million shares (-5 percent DoD). Average traded value, on the contrary, increased by 6 percent to reach US$ 78.2 million as against US$ 73.2 million.
Stocks that contributed significantly to the volumes include TRG, PAEL, MLCF, JSCL and WTL, which formed 34 percent of total volumes.
Stocks that contributed positively to the index include HBL (+75 points), UBL (+35 points), PPL (+25 points), TRG (+24 points) and MTL (+20 points). Stocks that contributed negatively include LUCK (-15 points), HUBC (-10 points), ENGRO (-6 points), OGDC (-5 points), and NESTLE (-5 points).
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Rupee gains 19 paisas in interbank
KARACHI: The Pak Rupee gained 19 paisas against dollar on Wednesday owing to improved inflows of export receipts, dealers said.
The rupee ended Rs166.76 to the dollar from previous day’s closing of Rs166.95 in interbank foreign exchange market.
Currency experts said that during the past few days the demand for dollar was on the higher side resulting in ease in rupee value.
They further said that the inflows of export receipts and from international financial institutions had helped the rupee to gain the value.
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SBP slashes refinance rate to five percent for temporary, long term schemes
KARACHI: State Bank of Pakistan (SBP) has decided to reduce the mark up rates on temporary economic refinance facility (TERF) to five percent from 7 percent and on long term financing facility (LTFF) from non-textile sector to five percent from six percent.
The central bank on Wednesday said that taking cognizance of the negative fallout of COVID-19 Pandemic for the economy, SBP has been constantly taking steps to safeguard the businesses and households and a reduction in the policy rate has been a key step since March 2020.
SBP has reduced the policy rate by 625 basis points since 17th March, 2020 to 7 percent.
To extend the benefits of this reduction in the policy rate to the users of its refinance schemes, SBP has now decided to align the end user markup rates on two of its refinance schemes for promoting investment in the country.
Temporary Economic Refinance Facility (TERF): SBP introduced this facility to provide stimulus to the economy by supporting new investment and balancing, modernization and restructuring (BMR) of the existing projects.
To further improve the incentive under the scheme, SBP has lowered the end user mark-up rates from existing 7 percent to 5 percent.
SBP will now be providing refinance to banks at 1 percent with banks’ maximum margin of 4 percent. Further, SBP has also allowed the TERF facility in cases where LCs/Inland LCs were opened prior, but retiring after the introduction of the scheme on March 17, 220.
These measures, in the backdrop of earlier policy action of allowing BMR under TERF, are expected to further support the economic activity, new long term investment and employment generation.
Under this scheme, up till 2nd July 2020, Rs10.5 billion have been approved by banks for 21 projects.
Long Term Financing Facility (LTFF): LTFF is one of the oldest refinance schemes of SBP under which financing is available for export-oriented projects for purchase of imported and locally manufactured new plant and machinery.
In March, 2020 SBP opened the LTFF to all sectors across the board. Earlier the end user markup rate under this scheme were 5 percent for textile sector and 6 percent for non-textile sectors.
State Bank has now reduced its refinance rate for non-textile sector by 1 percent and therefore the end user rate for all sectors across the board will be 5 percent.
It is expected that the above measures will help facilitate long term investment in both domestic and export market.