Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • ECC extends SBP’s refinance scheme with additional benefits

    ECC extends SBP’s refinance scheme with additional benefits

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved extension to the refinancing scheme of the State Bank of Pakistan (SBP) up to September 30, 2020 from June 30, 2020.

    A statement said that the ECC approved the “Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers.

    The scheme supports provision of credit at concessional rate to businesses that commit not to lay off workers till September 2020 (earlier the cutoff date was June 30, 2020), the loss coverage for SME sector has been increased to 60 percent from the existing 40 percent to promote greater take up at the smaller level of business.

    Under the new changes the borrowers having turnover up to Rs800 million can avail benefit of the scheme; earlier, for the eligibility of the scheme, the turnover limit was up to Rs 2 billion).

    Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division.

    ECC approved the following technical supplementary grants:

    1) Rs.3.2 billion for PIACL (Pakistan International Airline corporation Limited) to discharge the obligations on account of markup against GoP guaranteed loans.

    2) Rs25,206,953 in favor of Pakistan Academy for Rural Development (PARD) Peshawar for the current financial year.

    3) Rs. 1300 million to Pakistan Atomic Energy Commission to discharge its various liabilities

    4) Rs 235 million to Deputy Commissioner Islamabad for making payment of internal security duty allowance to troops of Pakistan Rangers (Punjab) deployed in Islamabad

    5) Rs 500 million to the Ministry of Information and Broadcasting to meet the expenditure of media campaign on Covid-19

    6) Rs 100 million for National Disaster Management Authority (NDMF) for procuring equipment for locust control in Punjab

    7) Rs 7.947 billion to NDMA on account of procurement of emergency equipment through Pakistan Foreign Mission in China (Ex-post Facto approval on account of Pakistan National Emergency Preparedness and Response for Covid-19, procurement of equipment and transfer of funds)

    8) Rs.4.5 billion for the capacity building of Civil Armed forces as requested by the Ministry of Interior

    9) Rs.80 million for Competition Commission of Pakistan for different expenses

    10) Rs 100 million for the purchase of kerosene oil by Head Quarters Frontier Corps KP (North) to be used in different locations posts (8000 feet and above)

    11) Rs.8.093 million for the Privatization Division for employee related expenditure

    12) Two TSGs amounting to Rs 1192.325 million and Rs 358.506 million for Ministry of Federal Education and Professional Training for the Award of Scholarships to Afghan students ECC also granted approval for book value adjustment of overdue amount of loans amounting to Rs 30.807 billion to Earth Quake Reconstruction and Rehabilitation Authority over and above its allocated development and non-development budget.

    It also allowed, on the recommendation of the committee earlier constituted by ECC, to convert two relent Chinese loans in to Government loans keeping in view the subsuming of ERRA into NDMA and ERRA being non-profit/ non revenue generating entity. ECC also approved the “handing over of Pakistan Machine Tool Factory to Strategic Plans Division.

    For the purpose of operationalization of PMTF, Rs 500 million shall be provided to SPD as a loan.

    The Federal Government shall pay all the liabilities accrued till the transfer of management control of PMTF to SPD, after partial settlement of liabilities of Rs 1.78 billion.

  • SBP, banks discuss Naya Pakistan Housing Program

    SBP, banks discuss Naya Pakistan Housing Program

    KARACHI: Governor State Bank of Pakistan (SBP) Dr. Reza Baqir called a meeting of Banks on Wednesday for deliberations on the measures proposed by Naya Pakistan Housing and Development Authority (NAPHDA) and identify way forward to ensure sustainable market-led financing of housing projects and mortgages.

    The meeting was chaired by the SBP Governor Dr. Reza Baqir, and attended by Chairman NAPHDA, Lt. General Anwar Ali Haider, and members of the think tank formed by the government including Shaukat Tareen, Arif Habib and Aqeel Karim Dhedhi among others.

    Banks were represented by their respective presidents.

    The SBP governor at the outset praised the work of Lt. General Anwar Ali Haider and NAPHDA for its significant potential contribution in meeting the shortage of housing in the country and accelerating economic activity in the country.

    He said that housing finance has not only remained under-developed in Pakistan as compared with other emerging economies but seen little progress over time. In this regard, therefore, this initiative is of great national interest.

    He emphasized that the construction and housing sectors have strong linkages with the rest of the economic sectors and offer a commercially viable and long term business proposition for banks.

    He also stressed that supporting economic activity in these sectors would support economic growth and particularly employment in current times of economic stress.

    He encouraged banks to view housing and construction finance as an opportunity to broaden their balance sheet and cater to the huge financing needs of the sector.

    The SBP governor reiterated central bank’s commitment to play a facilitative and supportive role while also supporting a healthy credit culture in the country.

    Chairman NAPHDA made a presentation to the banks on the key features of Naya Pakistan Housing Program. He shared the details of the underlying development model for the successful implementation of the initiative.

    Complementing the presentation, Shaukat Tarin, member of the government’s think tank, presented a financial model and elaborated the incentives being offered by the government and emphasized that these will make the financing of developers and mortgages commercially attractive for banks.

    The presidents of banks in their deliberations appreciated the Naya Pakistan Housing Program and expressed their readiness for participating in this initiative of national importance.

    They also made queries and suggestions in this regard. It was decided that banks, NAPHDA, and SBP would work together to prepare an overall roadmap and execution plans with support from the relevant sub-committees of Pakistan Banks Association.

  • SBP suspends service charges to facilitate banks

    SBP suspends service charges to facilitate banks

    KARACHI: The State Bank of Pakistan (SBP) on Wednesday announced temporary suspension of 0.12 percent service charges levied on banks against deposit of re-issuable balance.

    Through FD Circular No. 03/2015, dated August 26, 2015, 0.12 percent service charges have been levied on the banks against deposit of re-issuable balances with SBP BSC offices or NBP chest branches.

    In order to facilitate the banks in managing the excess liquidity, consequent to large volumes of withdrawals on the eve of Eid and the COVID-19 pandemic, it has been decided to extend the temporary suspension of 0.12 percent service charges on deposit of re-issuable balances with SBP BSC offices or NBP chests branches.

    Accordingly, banks can deposit re-issuable balances with SBP BSC offices or NBP chests without levy of 0.12 percent service charges on deposit of re-issuable balances till June 30, 2021.

  • Equity market declines by 170 points on political uncertainty

    Equity market declines by 170 points on political uncertainty

    KARACHI: The equity market ended down by 170 points on Wednesday owing to uncertainty after a political party announced to leave government coalition.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,849 points as against 34,019 points showing a decline of 170 points.

    Analysts at Arif Habib Limited said that the market made a strong come back today by registering an increase of 377 points, however, BNP Mengal’s decision to leave PTI Coalition government caused jitters in the market.

    The index lost all the gains made during the session and sustained a loss of -243 points, closing the session -170 points.

    Political uncertainty amid Corona crisis and border skirmishes between China and India have cumulatively dented the investor sentiment for the moment.

    Rupee parity also crossed 165 during the day, whereas international crude prices also picked pace, which in turn caused E&P stocks to post gains. Vanaspati sector topped the volumes with 43.9 million shares, followed by Inv Banks (35.5 million) and Chemical (34.8 million).

    Among scrips, UNITY led the volumes with 43.9 million shares, followed by JSCL (28.9 million) and PRL R1 (13.8 million).

    Sectors contributing to the performance include Banks (-77 points), Cement (-50 points), Fertilizer (-42 points), O&GMCs (-15 points) and Technology (-9 points).

    Volumes increased from 217.9 million shares to 340.8 million shares (+56 percent DoD). Average traded value also increased by 55 percent to reach US$ 61.0 million as against US$ 39.4 million.

    Stocks that contributed significantly to the volumes include UNITY, JSCL, PRLR1, AGL and NRSL, which formed 32 percent of total volumes.

    Stocks that contributed positively to the index include NESTLE (+10 points), HUBC (+10 points), OGDC (+10 points), SEARL (+9 points) and PMPK (+8 points). Stocks that contributed negatively include MCB (-42 points), ENGRO (-26 points), UBL (-25 points), FFC (-17 points), and HBL (-15 points).

  • Sindh Budget 2020-2021 at a glance

    Sindh Budget 2020-2021 at a glance

    KARACHI: The Sindh government on Wednesday presented budget for fiscal year 2020/2021. The following is budget at a glance:

  • Sindh unveils Rs1.2 trillion budget 2020/2021 with no new tax, 10 percent salary increase

    Sindh unveils Rs1.2 trillion budget 2020/2021 with no new tax, 10 percent salary increase

    KARACHI: Sindh Chief Minister Syed Murad Ali Shah on Wednesday presented Rs1.2 trillion provincial budget 2020/2021 with announcing no new tax and increase of 10 percent salary of the provincial government employees.

    On the floor of the house while delivering speech for budget 2020/2021, the chief minister said that the total outlay of budget for the next financial year 2020-2021 is Rs.1.2 trillion.

    The total size of current revenue expenditure is Rs.968.9 billion.

    “It is important to highlight here that for the next financial year, we have tried to align our Development as well as non-development expenditure priorities in line with the post COVID-19 situation,” the chief minister said.

    He said that during financial year 2019-20, the province faced financial constraints due to COVID-19 which significantly affected development progress in the entire country. Sindh was no exception.

    Government of Sindh budgeted Rs.284 billion as total development outlay in financial year 2019-2020, wherein Rs.208 billion were earmarked for Provincial ADP, Rs.20.0 billion for District ADP, Rs.51.0 billion in foreign projects assistance, and Rs.4.9 billion from Federal PSDP grant.

    Looking at the financial constraints, stakeholder departments are likely to complete 425 schemes during 2019-20, 33 schemes less as compared to 458 completed in 2018-19.

    “For the next financial year 2020-2021, the Administrative Departments in Sindh were earlier advised to prepare proposals for Provincial ADP 2020-21 at the size same as that of 2019-20 while allocating 85 percent for on-going schemes and 15 percent new schemes.

    “However, in a post Covid-19 scenario, with a reduction in federal transfers and funding for development, the total development outlay for Sindh for the next financial year 2020-2021 is proposed at Rs.232.9 billion, allocating Rs.155.0 billion to Provincial ADP and Rs.15.0 billion to District ADP schemes.”

    It would be pertinent to highlight that in this context Rs.54.6 billion are expected from Foreign Projects Assistance (FPA) and Rs.8.3 billion from Federal Government in Federal PSDP for 10 schemes under execution by Government of Sindh.

    The government had earlier decided to keep the size of development budget for the next financial year 2020-21 for important sectors such as Education, Health, Social Safety & Poverty Reduction and Water & Sanitation nearly same as that of 2019-20. In exceptional cases such as Health, allocation has been increased from Rs.13.50 billion to Rs.23.50 billion in order to meet the challenges of COVID-19 situation.

    The throw-forward amount in Provincial ADP 2020-2021 for 2209 schemes has reached at Rs.564.00 billion as compared to Rs.606.0 billion for 2705 schemes in 2019-2020.

    Keeping in view above non-development and development expenditure priorities, the major milestone of our objectives are:

    1. Exercise maximum austerity measures in our non-development expenditures.

    2. Provide maximum resources for Health sector.

    3. Enlarge substantially our social protection net through increased cash transfers to poverty inflicted people.

    4. Provide ways and means for employment generation as well sustaining economic activity for the poorest of the poor, in rural as well as urban areas.

    5. Continuing our focus on education, through increased allocations in financial year on development and non-development, despite huge resource constraints.

    6. Fashion our development spending in sync with the above mentioned post Covid preferences with increased focus on Public Private Partnership (PPP) projects.

    During his speech the chief minister said that the provincial government had decided not to introduce new tax in the budget 2020/2021.

    Further, in order to provide relief the salary of provincial government employees has been increased by 10 percent for grade 1-16 and five percent for grate 17 and above.

  • Rupee slides to Rs165.71 against dollar

    Rupee slides to Rs165.71 against dollar

    KARACHI: The Pak Rupee plummeted by 83 paisas Rs165.71 to the dollar on Wednesday owing to higher demand of the foreign currency for import and corporate payments.

    The rupee ended at Rs165.71 to the dollar against Rs164.88 in interbank foreign exchange market.

    Currency dealers said that the market witnessed demand for the foreign currency from importers and corporate buyers.

    They said that the market was also under pressure due to fall in foreign exchange reserves due repayment of external loans.

    Pakistan’s foreign exchange reserves have declined by $215 million to $16.705 billion by week ended June 05, 2020.

    The foreign exchange reserves of the country were at $16.92 billion by week ended May 29, 2020.

    The foreign exchange reserves held by the SBP fell by $266 million to $10.096 billion by week ended June 05, 2020 as compared with $10.362 billion a week ago.

    The central bank attributed the decline to the government external debt repayments of $301 million during the week.

  • Key points of amnesty scheme for real estate sector

    Key points of amnesty scheme for real estate sector

    KARACHI: The federal government has made amnesty granted to real estate sector to the part of Finance Bill, 2020 in order to get approval from the Parliament.

    Deloitte Yousuf Adil Chartered Accountants in their budget explanations said that to stimulate investment in real estate and construction sector, a no-questions-asked amnesty has been introduced.

    Under this amnesty the Federal Board of Revenue (FBR) has been restrained from asking question related to source of investment made into the real estate / construction business.

    Both previous and current federal governments have launched tax amnesty schemes in 2018 and 2019, albeit the scope of this scheme is limited to investment made in construction sector only.

    The proponent of this particular amnesty scheme argues that this would act as a catalyst to increase economic activity in the country thereby improving employment opportunities as number of sub-sectors and small and medium size industries are associated with construction industry.

    The newly introduced scheme provides immunity from the provisions of section 111 of the Ordinance , and no questions will be asked regarding source of funds from investors making capital investment in new construction projects in the form of money or land, either as an individual, as an association of persons or a company, subject to conditions as explained below.

    For individuals:

    Monetary: Investor shall open a new bank account and deposit such amount in it on or before the 31st day of December, 2020

    Land: Investor shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020

    Corporate shareholder / Partner:

    Monetary: 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 or before the 31st day of December, 2020

    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

    Registration: The Company or AOP shall be a single object company duly registered under the Companies Act, 2017 or Partnership Act, 1932 as the case may be.

    Additional conditions to be met:

    • Prescribed IRIS form shall be submitted by the person making investment.

    • The investments made shall be wholly utilized in a project.

    • Grey structure in case of builders and landscaping in case of developers have been completed on or before September 30, 2022, and duly certified by NESPAK or respective map approving authority.

    • Further, for land developer, the following additional conditions should be met;

    • 50 percent of plots have been booked for sale and 40 percent of sale proceeds thereof have been received by September 30, 2022 as duly certified by specified chartered accountancy firm.
    • 50 percent of the project roads have been laid up to sub-grade level as duly certified by NESPAK.

    • The value or price of the land or building shall be higher of

    a) 130 percent of FBR assessed fair market value; or

    b) At the option of person making investment, lower of the value determined by at least two independent SBP approved valuers.

    Exclusion

    The following incomes or persons are excluded from the relief provided under the amnesty scheme:

    Holder of public office, benamidar or his spouse or dependents; or

    Public Listed Company, real estate investment trust or any company whose income is exempt under the Ordinance.

    Proceeds of crime including money laundering, terror financing excluding tax evasion.

    Restriction of Ownership Changes

    • Under the new amnesty, no change in ownership shall be allowed for incomplete projects except where 50 percent cumulative cost on the project has been incurred as certified by prescribed Chartered Accountants firm, with the exception of legal transmission to heirs.

    • Inclusion of partners or shareholders after December 31, 2020 is permissible; however, such investors shall not be eligible to avail tax amnesty.

    Amnesty to the purchaser

    Provisions of section 111 shall also not apply to:
    the first purchaser of a building or a unit in the building in respect of the purchase price both in case of new project or existing incomplete project where payment is routed through crossed banking instrument between the date of registration of project with the FBR and September 30, 2022.

    The purchaser of plot for building construction where the purchase, the payment thereof and commencement of construction has been made on or before December 31, 2020 subject to construction completion by September 30, 2022 and subject to registration of such purchaser with FBR on IRIS portal.

    Thus no questions would be asked from the purchaser of building or plot regarding source of funds who complies with the above mentioned conditions.

  • NBMFCs reschedule over Rs17 billion loans of 0.93 million individuals

    NBMFCs reschedule over Rs17 billion loans of 0.93 million individuals

    ISLAMABAD: Non-bank Microfinance Companies (NBMFCs) have rescheduled over Rs17 billion loan portfolios of 932,862 individuals in order to provide relief in the wake of coronavirus outbreak.

    The Securities and Exchange Commission of Pakistan (SECP) in a statement issued on Tuesday said that its permission to NBMFCs to reschedule the loan portfolio not only helped NBFCs to adjust their portfolio at risk but also resulted in extending relief to 932,862 individuals and micro-enterprises who have borrowed over 17 billion rupees from non-bank microfinance companies (NBMFCs), as reported on May 31, 2020.

    Out of these, 796,893 borrowers were facilitated through deferment of principal repayments of over 13.1 billion rupees by six NBMFCs, while 135,969 borrowers benefited through rescheduling of loans of 3.9 billion rupees by four NBMFCs.

    On March 31, 2020, the SECP had relaxed the regulatory requirements for non-bank finance sector allowing them to defer or reschedule the loan repayments to their borrowers. It was part of SECP’s efforts to provide relief for mitigating adverse effects of COVID-19 pandemic and ensuing lockdowns.

    The SECP had also urged the NBMFCs to adopt a considerate approach to accommodate the borrowers who belong to either unprivileged or underprivileged segments of the society.

    The SECP had also allowed NBMFCs to accept borrowers requests made through electronic means or phone calls.

  • FBR to take action against amnesty declarants on failure to make payment

    FBR to take action against amnesty declarants on failure to make payment

    The Federal Board of Revenue (FBR) in Pakistan issued a stern warning on Tuesday, stating that it would invoke provisions related to concealed assets if declarants under the amnesty scheme failed to pay their outstanding dues by June 30, 2020.

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