Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • SBP imposes Rs1.35 billion as monetary penalty on commercial banks

    SBP imposes Rs1.35 billion as monetary penalty on commercial banks

    KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty to the tune of Rs1.35 billion on commercial banks in five months for violating regulatory environment.

    The central bank on Wednesday issued significant enforcement measures by imposing monetary penalty on banks for violating rules, regulations and other regulatory environment.

    The SBP imposed Rs192.66 million as penalty on four banks during the month of November 2019 for violating mainly regulations related to Customers Due Diligence (CDD) and Know Your Customer (KYC).

    The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.

    In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions

    With the latest penal action the total amount of penalty during first five months (July – November) 2019 increased to Rs1,351.28 million.

    According to the highlights of significant enforcement actions by the SBP during November 2019, the central bank imposed Rs192 million as monetary penalties.

    The central bank on November 05, 2019 imposed penalty amount of Rs60.8 million on Allied Bank Limited for violating CDD/KYC.

    “In addition to penal action, the bank has been advised to conduct an internal inquiry on breaches of regulatory requirements and take a disciplinary action against the delinquent officials,” the SBP said.

    The central bank o n November 06, 2019 imposed an amount of Rs91.85 million on MCB Bank Limited for violating CDD/KYC.

    “In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”

    The SBP on November 06, 2019 imposed penalty of Rs14 million on the Bank of Punjab for violating CDD/KYC.

    “In addition to penal action, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”

    The SBP on November 07, 2019 imposed monetary penalty of Rs26 million on Habib Bank Limited for violating CDD/KYC.

    “In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”

  • Ministry’s approval must for liquor import for diplomatic bonded warehouse

    Ministry’s approval must for liquor import for diplomatic bonded warehouse

    KARACHI: The Import permission from Ministry of Commerce is necessary for the import of liquor for a diplomatic bonded warehouse.

    “A Muslim cannot import or deal in liquor in the diplomatic bonded warehouse,” according to explanation issued by Federal Board of Revenue (FBR) regarding Diplomatic Bonded Warehouse.

    “Liquor is allowed to Diplomats against the Exemption Certificates issued by the Ministry of Foreign Affairs.”

    Liquor can be purchased by diplomats according to the quantities mentioned in the exemption certificates issued by the Ministry of Foreign Affairs, it said.

    Privileged persons can purchase liquor according to the quota provided in the Model Rules and CGO.15/96 which is as under :-

    According to CGO.15/96, the Import / purchase of alcoholic beverage is restricted to US$ 200/= per family per month by expatriate employees of foreign or local companies, loan funded projects or media personnel.

    According to the Model Rules dated 15-04-1963 for customs concessions to privileged personnel arriving under various foreign aid programmes or projects, Import / purchase of liquor can be made as per following quota.

    The FBR said that Diplomatic Bonded Warehouse is the warehouse licensed under section 13 of the Customs Act, 1969 for warehousing the dutiable goods Imported exclusively for diplomats / privileged persons.

    A Bonded Warehouse License is issued under the provisions of section 13 of Customs Act,1969.

    However, in case of Diplomatic Bonded Warehouse, the licenses were issued with the prior approval of the Federal Board of Revenue (FBR).

    As provided under sub-section(2) of section 13 of the Customs Act,1969, an application for the grant of license shall be made in the prescribed form Annex-B along with following documents :-

    Map of the proposed area.

    Article and Memorandum of Association in case of company and copy of partnership deed in case of partnership firm.

    Certificate from a scheduled bank showing soundness of financial position.

    Income Tax Registration Certificate.

    Details of Directors and authorized persons.

    Certificate of Membership of Chamber of Commerce and Industry.

    Lease / Tenancy Agreement.

    Copies of National identity Card(s) & Character Certificate(s).

    Comprehensive Insurance Policy from an approved Insurance Company.

    Survey Certificate issued by the approved surveyor.

    Besides the requirements mentioned above, all other conditions required under the Customs Act,1969 or any other law for the time being in force shall also be fulfilled.

    The permission for Import of liquor is, however, granted to non-Muslims only.

    The diplomatic bonded warehouses are dealing in Import of goods Imported exclusively for the use of diplomats, foreign missions and privileged persons. As such, all such goods / items which are used by the diplomats, foreign missions and privileged persons can be imported.

    The goods are not imported against L/C. The Importer (holding diplomatic bonded warehouse license) Import goods on contract basis and store the same in his warehouse. Subsequently goods are sold to diplomats / privileged persons according to their requirement and exemption certificates issued by the Ministry of Foreign Affairs.

    The purchase will be made strictly according to the quota fixed by the Ministry of Foreign Affairs and quantities mentioned in the exemption certificate.

    Quota is allotted and purchases are authorized by the Ministry of Foreign Affairs.
    The strength of the diplomatic community in the country which benefits from the warehouses is maintained by the Ministry of Foreign Affairs.

    The licensee of a bonded warehouse cannot open its sub-office in other cities. Periodical stock taking is conducted.

    The audit is also carried out by the staff of the Director General, Revenue Receipt Audit on quarterly basis.

    Moreover, insurance policy is obtained from the bonders covering all risks including pilferage etc.

    Besides there are specific provisions in Chapter-XI and Chapter-XVIII of the Customs Act,1969.

    In case of detection of any pilferage or misuse of the facility, penal action under the relevant clauses of sub-section (1) of section 156 of the Customs Act,1969 can also be initiated.

    On first arrival in Pakistan a privileged person shall be allowed to import free of duty and taxes foodstuff and other consumable stores including liquors and tobacco up to C&F value of US$ 200/- under chapter III of SRO 450(i)/01.

    During the period of his assignment he shall be allowed to Import free of duty and taxes foodstuff and consumable stores including liquor and tobacco up to C&F value of US$ 150/- per month but the value of liquor will not exceed US $50/- per month.

  • FBR discusses Customs internship program at NUST, LUMS

    FBR discusses Customs internship program at NUST, LUMS

    ISLAMABAD: Federal Board of Revenue (FBR) is in discussion with top universities to launch ‘Customs internship program’ for the youth of the country.

    In this regard, Syed Shabbar Zaidi, Chairman FBR held a meeting with Heads of Departments of National University of Science and Technology (NUST) and Lahore University of Management Sciences (LUMS) to discuss the launch of “Customs Internship Program” for the youth of Pakistan in June 2020.

    Earlier the program had been got approved and Chairman had directed its expeditious implementation.

    As informed by Dr. Jawwad Uwais Agha, Member Customs Operations, through this program two hundred BS/MS level students of top universities of Pakistan like LUMS, NUST, IBA and GIK in areas of Law, Public Financial Management, Economics, Finance, Public Policy and Information Technology would get an opportunity to work in the field units of Pakistan Customs for a 10-12 weeks’ internship program.

    A stipend of Rs 12,000 / month will be offered in this regard.A special internship program for 200 High School students will also be launched simultaneously with a stipend of Rs 4000-8000 for a 2-6 weeks internship program.

    FBR chairman lauded the efforts of Pakistan Customs in launching this innovative initiative which will create awareness about International and Domestic Economy and Public sector functioning and elaborated that the program will increase opportunities of employability and enhance confidence and ability of youth.

    The representatives from NUST and LUMS appreciated the initiative taken by Pakistan Customs and ensured their complete cooperation in this regard.

  • FBR to take strict action against individuals, companies fail to file annual returns

    FBR to take strict action against individuals, companies fail to file annual returns

    ISLAMABAD: Federal Board of Revenue (FBR) may take strict action against persons failed to file their annual returns for tax year 2019, besides imposing penal amount for late filing.

    Sources in FBR on Tuesday said that individuals and corporate entities (having special tax year) have six more days to file their returns in order to avoid strict action and paying late filing amount.

    The last date for filing income tax returns for tax year 2019 is December 16, 2016. The FBR granted third extension for filing returns on November 29, 2019.

    The actual date for filing income tax returns for tax year 2019 was September 30, 2019 for salaried persons, business individuals, Association of Persons (AOPs) and corporate entities having special tax years.

    The sources said that under Income Tax Ordinance, 2001 the defaulting taxpayers would face imprisonment up to three years.

    However, persons or companies filing tax returns after the due date will be liable to pay penalty amount to ensure their names on the Active Taxpayers List (ATL).

    The sources said that the income tax return filing for tax year 2018 had reached to a record high of 2.71 million by week ended November 30, 2019.

    They said that a large number of people were still filing their returns for tax year 2018 in order to appear on ATL 2018, which would remain in vogue till February 29, 2020.

    The new ATL for tax year 2019 will be published by the FBR on March 01, 2020.

    The sources said that the appearance the name on ATL had become important after the introduction of 10th Schedule to the Income Tax Ordinance, 2001 through Finance Act, 2019.

    They said that those persons having filed their returns but not on the ATL or those persons failed to file their returns are subject to 100 percent higher withholding tax rates.

  • HBL plans network expansion in China

    HBL plans network expansion in China

    KARACHI: Habib Bank Limited (HBL) has planned to expand its network in China, according to corporate briefing on Tuesday.

    According to Topline Research, the HBL is planning to expand its network in China. Talks are in advanced stages of giving HBL rep office a branch status, additionally One-Belt One-Road (OBOR) based countries are to be assisted by HBL where Chinese presence is limited.

    Key theme for the bank is focused on key real sectors with segments like Agri financing and SME finance.

    In 2020 the bank is expected to move away from one off costs and move towards a normalized cost to income ratio with a long term target of sub 50 percent.

    Customer base to cross 20 million in the coming year versus 16 million currently, translating into higher fee income going forward.

    Current account are targeted to cross the one trillion mark, keeping cost of deposit low.

    The banks’ focus is on innovation through technology.

    The Bank focuses on “STARS” strategy encompassing:

    • Sustaining Success (maintain position in deposits, IB, treasury and rural banking)

    • Turnaround (revitalization of international division and home remittance)

    • Acceleration (consumer finance)

    • Realignment (commercial banking fis and Islamic banking)

    • Startups (emphasis on branchless banking and digital banking)

    Key Initiatives of the banks are 1) branchless banking through Konnect aimed to capture a new market through smartphones, 2) Power sector prowess through various IB based transactions and 3) Launch of Panda bonds.

    Open position secured to pay New York penalty is winding down by 25-30 percent by end of 2019.

  • Car sales witness 45 percent decline in July – November

    Car sales witness 45 percent decline in July – November

    KARACHI: Car sales witnessed 45 percent decline during first five months (July-November) 2019/2020 owing to increased prices and high cost of auto financing.

    According to sales data released by Pakistan Auto Manufacturers Association (PAMA), the industry witnessed sale of 54,950 units during first five months of current fiscal year as compared with 100,643 units in corresponding months of the last fiscal year.

    Analysts at Topline Securities attributed the fall to higher auto prices post rupee devaluation and higher interest rates for auto financing.

    Honda Cars (HCAR) sales fell 67 percent to 7,141 units during July – November 2019/2020 as compared with 21,911 units in the same period of the last fiscal year.

    Honda Cars sales 62 percent YoY during November 2019, where combined sales of City and Civic fell by 66 percent YoY, however it recorded increase of 4 percent on Month on Month (MoM). BR-V reported a decline of 24 percent YoY and 34 percent MoM.

    The car sales of Indus Motors (INDU) fell by 57 percent to 11,843 units during first five months of current fiscal year as compared with 27,307 units in the same months of the last fiscal year.

    Indus Motors (INDU) reported second consecutive MoM increase in volumetric sales; up by 6 percent MoM mainly due to 10 percent MoM and 8 percent MoM increase in its Corolla and Fortuner variants, respectively.

    This increase in volumes is on the back of aggressive promotions, discounts & different waiver schemes offered by company in collaboration with commercial banks. However, INDU continues to report a decline on YoY basis; down by 52 percent YoY in November 2019.

    The sales of Pak Suzuki Motors Company (PSMC) posted decline of 30 percent to 35,966 units during first five months of current fiscal year as compared with 51,425 units in the corresponding period of the last fiscal year.

    Pak Suzuki recorded a 31 percent YoY decline in November 2019. The decline in sales was led by Wagon-R and Cultus, which is down 70 percent YoY and 41 percent YoY respectively.

    Furthermore Alto has also depicted monthly decline of 27 percent YoY which is highest since its launch.

    Bolan and Ravi variants are down 58 percent and 56 percent YoY, respectively. Swift sales were down by 42 percent YoY.

    The analysts expect recovery in car volumes from start of 2020 as auto volumes will likely bottom out in December 2019.

  • Overseas Pakistanis send $9.298 billion in five months

    Overseas Pakistanis send $9.298 billion in five months

    The State Bank of Pakistan (SBP) reported on Tuesday that overseas Pakistani sent $9.298 billion during the first five months of the current fiscal year, spanning from July to November. This figure compares closely with the $9.282 billion received during the same period in the preceding year.

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  • FBR issues draft rules for business license scheme

    FBR issues draft rules for business license scheme

    ISLAMABAD: Federal Board of Revenue (FBR) has issued draft rules for business license scheme, which will be mandatory for every person engaged in any business, profession or vocation.

    Under Section 181D of Income Tax Ordinance, 2001, which is the new section introduced through Finance Act, 2019.

    The following are the draft rules for business license scheme:

    83A. The rules in this Chapter apply for the purposes of business license scheme.

    83B. Definitions.— in these rules, unless there is anything repugnant to the subject or context,—

    (a) “applicant” means a person who files application for issuance of business license;

    (b) “Iris” means the application software on the web portal of Federal Board of Revenue for the purposes including application for business license;

    (c) “service provider” means any person whose services to provide electronic data entry into Iris or any other web based application software, bio-metric verification and delivering the print out of the business license to the applicant for the purposes of these rules, has been hired by the Federal Board of Revenue.

    83C. Application for and issuance of business license

    (1) Subject to sub-rule (4), any person engaged in any business, profession or vocation, shall apply to the Federal Board of Revenue for issuance of business license in the Form specified in the schedule.

    (2) Where the applicant is having a cell phone number, issued by any mobile phone company and is having access to the internet facility, he shall file application form on the Iris or any software application developed by Federal Board of Revenue for the purposes of these rules. The system generated business license issued to the applicant shall be emailed to the applicant.

    (3) Where the applicant is not having any cell phone number issued by any mobile phone company or not having access to internet facility, he shall provide the particulars to the service provider or the personnel in a Kiosk established by a Regional Tax Office, for online filing of the form, and the service provider or the personnel in the Kiosk, as the case may be, shall—

    (i) verify particulars of the form filled in;

    (ii) complete bio-metric verification of the applicant; and

    (iii) give system generated print out of the business license to the applicant;

    (4) Where a person’s name is appearing in the active taxpayers’ list, he shall be treated to have filed application and the system generated business license shall be emailed to his email address registered in Iris.

    83D. Display of the business license

    (1) Every person who has been issued a business license under these rules, shall display the said license at every place of business of the person.

    83E. No liability on holding a business license

    Where a person has been issued a business license, he shall not be liable to payment of any tax on account of holding a business license unless such person is otherwise liable to payment of tax under any other provisions of the Income Tax Ordinance, 2001.

  • Stock market gains 222 points amid cautious buying

    Stock market gains 222 points amid cautious buying

    The Pakistan Stock Exchange (PSX) experienced a moderate rise on Tuesday, with the benchmark KSE-100 index closing up by 222 points, settling at 40,665 points compared to the previous close of 40,443 points.

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  • Rupee ends flat amid demand for import payments

    Rupee ends flat amid demand for import payments

    KARACHI: The rupee ended flat against dollar on Tuesday owing to demand from import and corporate buyers.

    The rupee ended Rs154.98 to the dollar from previous day’s closing of Rs154.97 in interbank foreign exchange market.

    Currency dealers said that the market witnessed demand from importers and corporate buyers for dollars. However, inflows offset the demand and the rupee depreciated by one paisa.

    The foreign currency market was initiated in the range of Rs155.00 and Rs155.04. The market recorded day high of Rs155.00 and low of Rs154.95 and closed at Rs154.98.

    The exchange rate in open market witnessed appreciation of rupee by 10 paisas against dollar. The buying and selling of dollar was recorded at Rs154.50/Rs154.80 from previous day’s closing of Rs154.60/Rs154.90 in cash ready market.