KARACHI: All Pakistan Textile Mills Association (APTMA) on Tuesday demanded the government of restoring zero-rate sales tax and reducing interest rate to five percent in order to help the industry and ensure jobs.
(more…)Author: Mrs. Anjum Shahnawaz
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Date for converting bearer prize bonds of Rs40,000 extended to June 30
KARACHI: People now can surrender Rs40,000 denomination bearer prize bonds by June 30, 2020 and exchange the amount with registered bonds or other given options.
Finance Division on Tuesday issued a notification to extend the last date for encashment/redemption of Rs40,000 bearer bonds from March 31, 2020 to June 30, 2020.
The SBP stopped the issuance of Rs40,000 denomination prize bonds on June 24, 2019 and given deadline of March 31, 2020 for exchange the such denomination with other registered mode of investment.
Since the announcement of the central bank, the holders of bearer bonds had surrendered around Rs238 billion till November 2019.
The total investment Rs40,000 denomination bearer bonds peaked at Rs258 billion by May 2019, which reduced to around Rs20 billion by November 2019.
SBP stops banks selling Rs40,000 prize bonds, issues procedure for conversion into registered bonds
The SBP in a notification issued in June 2019 issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:
a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.
b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.
c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:
1. Conversion of premium prize bonds (registered)
2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)
3. Encashment at face value.
d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:
Conversion to Premium Prize Bonds (Registered)
i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).
ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.
iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.
Replacement with the Special Saving Certificate (SSC)/Defence Saving Certificate (DSC)
i. The bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.
ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.
iii. The bondholder shall also be required to submit application form for purchase of SSC/DSC (SC-1) as per the prescribed procedure.
Encashment at Face Value:
i. The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches.
ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.
A copy of the application form, duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.
The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.
Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.
It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.
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Rupee depreciates by 56 paisas against dollar
KARACHI: The Pak Rupee fell by 56 paisas against dollar on Tuesday owing to uncertain economic conditions after coronavirus spread.
The rupee ended Rs166.70 to the dollar from previous day’s closing of Rs166.14 in interbank foreign exchange market.
Currency experts said that the uncertain economic conditions were prevailed after lockdown in most of the parts of the country to control coronavirus spread.
They said that despite lower import payment demand and massive decline in international oil prices the local unit had failed to recover against the greenback.
The experts however said that the deterioration in rupee value was mainly due to outflow of hot money that was invested in the secondary debt market.
The foreign currency market was initiated in the range of Rs166.00 and Rs166.71. The market recorded day high of Rs167.00 and low of Rs166.50 and closed at Rs166.70.
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Attock Refinery warns complete shut down on lower uplifting
KARACHI: Attock Refinery Limited has issued a grave warning regarding the continuation of its operations, stating that a complete shutdown is imminent within a week if the current situation regarding product uplifting does not improve significantly.
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Philip Morris suspends operations
KARACHI: Philip Morris (Pakistan) Limited, a tobacco manufacturing company, has announced to suspend operations for indefinite period due to spread of coronavirus.
In a letter to Pakistan Stock Exchange (PSX) on Tuesday, the company said in compliance with directives of provincial governments to contain the spread of COVID-19 it has been decided to temporarily suspend operations of the company and its offices until further notice.
The company will inform the stock exchange when operation resume.
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ECC approves Rs75 billion for repayment of tax refunds
ISLAMABAD: Economic Coordination Committee of (ECC) the Cabinet on Monday approved Rs75 billion for Federal Board of Revenue (FBR) for the repayment of tax refunds.
Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a special meeting of the ECC, which approved Rs75 billion for FBR to enable them to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years.
The amount shall help approximately 676,055 beneficiaries by improving their liquidity position.
ECC also approved the supplementary grant of Rs30 billion to Ministry of Commerce to payback duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slowdown due to worldwide outbreak of corona epidemic.
The special ECC meeting was met to fulfill the necessary requirements for different relief measures already announced by the Prime Minister for the public due to the ongoing Corona Virus Pandemic.
ECC approved the fiscal stimulus package of Rs1.2 trillion with main components as follows:
ECC approved Supplementary Grant of Rs100 billion for the “Residual/Emergency Relief Fund” in terms of article 84(a) of the constitution of Islamic Republic of Pakistan for provision of funds for mitigating the affect of COVID-19.
The special Package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the ECC.
The package shall provide cash grants to 12 million families under the regular “kafalat program” and Emergency Cash Assistance on the recommendation of the district administration.
The assistance will be provided for four months and besides the BISP beneficiaries it will be one time dispensation, the cash will be provided either in one installment of Rs12,000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs6000/- each.
The Poverty Alleviation Division was asked to present both options with feasibilities.
The partner banks may be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under “Ehsaas Cash Assistance Package in Response to COVID-19” Pandemic.
After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak.
It was estimated that around three million workers will fall in this category and they will have to be paid a minimum wage of Rs.17500 per month.
The estimated cost of this provision for daily wagers comes around to Rs52.5 billion a month.
The provincial labour departments shall ensure the delivery of assistance to the laborers while the provision of funds shall be the responsibility of the federal government.
ECC directed that immediate consultation with the provincial labor departments(mentioned under the provincial rules of business) may be carried out for providing timely assistance to those who are in need.
ECC approved Rs50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates.
USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division.
USC has further planned to procure essential items within 2-3 weeks. It was directed that USC may engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.
ECC also allowed to reduce different taxes and duties on import and supply of different food items for alleviating the adverse impact of COVID -19 on different sections of the society.
Rate of advance tax on the import of different pulses was reduced to 0 percent from 2 percent. individuals and associations of persons providing tea, spices, dry milk and salt to USC without a brand name will pay 1.5 percent withholding tax instead of 4.5 percent.
Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5 percent withholding tax instead of 4.5 percent earlier. ACD (additional customs duty) @ 2 percent on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) has also been exempted.
ECC was briefed SBP is working on payment of claims worth Rs49 billion out of which around 40 billion will be paid by June 2020.
ECC approved supplementary grant of Rs6 billion for Pakistan Railways to meet its expenses. Pakistan Railways has suspended its passenger train services around the country since 19-3-2020.
The approved amount shall be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers.
Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended.
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Budget Strategy: No amnesty schemes; individual tax threshold to be lowered for broadening of tax base
ISLAMABAD: The government has prepared budget strategy under which no more amnesty scheme will be offered in future. Meanwhile, the tax threshold to broaden the tax base.
The medium term budget strategy paper 2020/2023 released by the ministry of finance stated that the government will increase the share of direct taxes in revenues by enforcing real-income based income tax, to be achieved by broadening of tax base.
Documentation of the economy to increase taxation in wholesale and retail, real estate and speculation businesses is also a priority. “Amnesty schemes will no longer be offered, and exemptions will be curtailed. Income tax slabs will be rationalised, and thresholds will be lowered to broaden tax base.”
Gradual phasing out of final tax regime will help in taxing real income. Through amendments in tax law, simplification of laws and regulations, and improvement in tax administration, a legal basis will be provided to risk-based audit system.
Taxpayer facilitation measures include awareness campaign and taxpayer education facilitation. Investments in IT based customer relationship management system, support lines, emails and website will be strengthened.
Measures will also be taken to encourage voluntary compliance through facilitation measures and increasing certainty of detection and enforcement of law.
Proper targeted awareness campaign through official media houses, using commercial media means will be carried out.
FBR is effectively using Information Technology support for efficient detection, monitoring and facilitation of the tax regime. Data on foreign bank accounts of Pakistani citizens is being received and analyzed to detect tax evasion.
IT based databank regarding foreign bank accounts will be established. Tracking and tracing system for collection of Federal excises duty on cigarettes has commenced with the issuance of licenses. Electronic monitoring of production and sales of various sectors will also commence in due course of time.
Installation of point-of-sale (PoS) integration on all Tier-I retailers has been enforced since 15 December 2019.The online integration of the prescribed registered persons with PoS will be enforced through effective monitoring. FBR is developing IT strategy for this.
The recently launched app “Tax Asaan” will be improved and more features will be introduced to make it user friendly. Introduction of Corporate Income Tax (CIT) reform will result in fewer exemptions and crediting schemes.
The practice of issuing new preferential tax treatments or exemptions will be discontinued so that tax exemptions as a tool for philanthropy and social, investment and export promotion are discouraged.
Exemptions will be phased out except basic food and nutrition items and provisions of health sector. Harmonization between Federal and Provincial taxation regimes is to be achieved by removing duplication of taxation and introducing uniform laws and procedures.
The constitution assigns income taxes (except for agriculture income), the General Sales Tax on goods, customs duties, federal excises, and the capital gains tax to the federal level to be collected by the Federal Board of Revenue (FBR).
While, GST on services, tax on professions, Agricultural Income Tax, Motor Vehicle Tax, Urban Immovable Property Tax, and other taxes related to real estate (e.g. stamp duty, Capital Value Tax) are assigned to the provinces.
This arrangement fragments Pakistan into five tax jurisdictions in the services sector, with consequences such as double taxation, cascading effects of taxes and high compliance burden.
Work on a unified tax portal with standardised forms that will enable taxpayers to file and pay federal and provincial taxes with less cost and compliance time will be completed.
In 2020-2021, FBR will be working on removal of structural anomalies in the taxation regime such as anomalies from SROs (Statutory Regulatory Orders) / aligning certain SROs with the main statute and Rules, Simplified tax returns and forms.
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PM Corona Relief Fund set up; source of money not to be asked
ISLAMABAD: Prime Minister Imran Khan on Monday set up a fund to generate money for helping people affected by coronavirus lockdown.
The fund has been set up at National Bank of Pakistan (NBP) at Karachi.
The prime minister in his address to the nation said that authorities would not ask source of the money donated to this fund.
Further, the money donated to this fund will also be tax exempted, he added.
The prime minister also constituted Tiger Force to fight coronavirus. He said that the force would go to affected areas due to lockdown and would provide food and other essential items.
The tiger force will also aware people about the coronavirus.
Imran Khan said that aged people and weak persons were more vulnerable to this virus. However, normal persons will have no threat from this virus and they can be recovered by self-quarantine.
He again said that Pakistan cannot afford lockdown in entire country and there is not comparison of Pakistan with other developed nations.
The prime minister said that around 80 to 90 people of Pakistan have not sufficient food for them. Any lockdown will further aggravate situation for them, he added.
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Equity market ends down by 86 points on falling global prices
KARACHI: The equity market has lost 86 points on Monday owing to lowering international oil prices and bearish regional markets, analysts said.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 28,023 points as against 28,110 points showing a decline of 86 points.
Analysts at Arif Habib Limited said that the market opened on a negative note today with -127 points and continued trending down throughout the session to realize a loss of -642 points.
Slump in international crude oil prices as well as bearish performance of Regional Stock markets caused selling pressure at PSX. Cement sector came out as the winner, following on the trajectory shown on the last trading day on account of possible relief package for real estate construction sector.
Resultantly, MLCF hit upper circuits, whereas DGKC also traded near upper circuit. Due to significant price reductions during the later half of the outgoing month also gave hope to the Investors of a reduction in monthly CPI number.
Power sector led the volumes with 41 million shares, followed by Cement (29.5 million) and Banks (18 million). Among scrips, KEL topped the chart with 35 million shares, followed by MLCF (9.6 million) and HASCOL (7.2 million).
Sectors contributing to the performance include E&P (-133 points), Banks (-95 points), Tobacco (-19 points), Cement (+136 points), Power (+47 points), Pharma (+12 points).
Volumes declined from 169.5 million shares to 159.4 million shares (-6 percent DoD). Average traded value also by 0.3 percent to reach US$ 25.4 million as against US$ 25.6 million.
Stocks that contributed significantly to the volumes include KEL, MLCF, HASCOL, UNITY and SMBL, which formed 41 percent of total volumes.
Stocks that contributed positively to the index include LUCK (+65 points), FFC (+38 points), HUBC (+32 points), DGKC (+18 points) and FCCL (+17 points). Stocks that contributed negatively include PPL (-73 points), OGDC (-46 points), UBL (-35 points), UBL (-20 points), and PAKT (-19 points).
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PCDMA urges FBR to withdraw notices amid coronavirus lockdown
KARACHI: Commercial importers have resented to the notices sent by Federal Board of Revenue (FBR) despite realizing severe economic crisis amid lockdown in the country to control spread of coronavirus.
Pakistan Chemicals & Dyes Merchants Association (PCDMA) chairman and former director Karachi Stock Exchange Amin Yousuf Balgamwala in a statement on Monday demanded to waive all notices including income tax, sales tax, WHT and all proceeding in this regard for two months due to the worst economic crisis, as due to coronavirus pandemic, all the business activities have stopped and commercial importers are already facing huge financial crises.
Balgamwala said we are surprised on receiving FBR notices, as whole country is lockdown for prevention of coronavirus pandemic, so chairman FBR to issue directives to chief commissioner and all RTOs to stop harassment to commercial importers, so that import activities could be restored after the lockdown period.
“If wheel of trade and industry will continue to rotate, will create more opportunities for employment as the country develops,” he said
PCDMA chairman further said that if all notices including income tax, sales tax, WHT and other proceeding not stopped for at least 2 months then the textile industry will be badly affected which is the backbone of the domestic economy as commercial importers are the largest means of providing raw materials to the textile industry to continue production activities.
Amin Yusuf Balgamwala also demanded to defer the condition of the CNIC on the sale of goods to unregistered persons for six months so that the business community, especially small traders should be protected from destruction.