Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • FPCCI fears no advantage for Pakistan under Phase-II FTA with China

    FPCCI fears no advantage for Pakistan under Phase-II FTA with China

    KARACHI: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) feared that Pakistan would not be able to take advantage of opportunities under Phase II of China Pakistan Free Trade Agreement (CPFTA-II).

    Mian Anjum Nisar, President FPCCI and Sheikh Sultan Rehman, Vice President FPCCI said in a statement on Monday expressed fear that Pakistan may not be able to reap benefits under Phase II of China Pakistan Free Trade Agreement (CPFTA-II) despite elimination of duties on 313 tariff lines covering most of Pakistan’s exports.

    He pointed out that during Phase I of China Pakistan FTA, the balance of trade remained greatly in favor of China which managed to export 57 percent of its product lines while Pakistan could take advantage of only 5 percent of its product lines.

    Pakistan exported US $ 2.1 billion approx. while imports from China have reach more than US $ 17 billion approx. that created trade gap of US $ 15 billion approx. in favor of China.

    While products included in this volume of Pakistan’s exports to China are cotton (US $ 872.85 million), Cereals (US $ 161.3 million), Copper (US $150.26), Beverages, spirits and vinegar (US $133 million), Fish, crustaceans, molluscs, aquatics invertebrates (US $ 91.21 million), Ores slag and ash (US $ 66 million), Machinery, boilers (US $45.9 million), Salt, sulphur, earth, stone, plaster, lime and cement ( US $ 43.36 million), Raw hides and skins (other than furskins) and leather ( US $ 35 million, Articles of apparel, knit or crocheted (US 30 million).

    FPCCI Office Bearers expressed serious concern about Pakistan’s ability to benefit from Phase II, when Pakistan does not have surplus products to exportdue to a shrinking economy.

    He further highlighted the fact that industrial output is declining because of de-industrialization in the last few years. Serious issues like, high interest rates, frequent increases in power and gas tariff, unavailability of gas to industries, abrupt changes in government policies, rampant smuggling, refunds to exporters and an overall hostile environment are making it difficult for industries to sustain their existence.

    FPCCI Office Bearers urged Government of Pakistan to urgently develop a robust and holistic industrial policy that would lead to massive industrialization in the country, encourage R&D, innovation, diversification and development of new products, improve quality standards and enhance technical skills of labor.

    He also urged Chinese companies to enter into joint ventures with Pakistani manufacturers and relocate their industries to Special Economic Zones. These efforts will significantly raise industrial output enabling Pakistan to take advantage from Phase II of China Pakistan FTA.

    Otherwise, Pakistan will not be able to receive benefits from supposedly vast opportunities available to us and the fate of Second Phase of China Pakistan FTA will not be any different that the First Phase.

  • Stock market declines by 420 points on selling activities

    Stock market declines by 420 points on selling activities

    KARACHI: The stock market fell by 420 points on Monday owing to round the clock selling in the equity market.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 42,747 points as against 43,168 points showing a decline of 420 points.

    First day of the change in circuit breaker met with an overall negative performance on the bourse. After an initial surge of 135 points, market largely remained under selling pressure throughout the session and went down by 535 points during the session.

    MoC showed recovery of around 100 points from day’s low and closed the session at -420 points. Triggers causing investors to stay cautious included an early called FATF meeting, pending increase in gas prices by ECC and political uncertainty that marred the sentiment last week.

    Besides, the ECC also decided to reduce GIDC charge with the aim to reduce Urea price/bag. Resultantly, EFERT hit lower circuit breaker, whereas FFC and FFBL showed positive price performance.

    Banking sector topped the chart with 27.2 million shares, followed by Technology (25.6 million) and Fertilizer (25.3 million). Among scrips, EFERT ranked first with 15.3 million shares, followed by TRG (11.9 million) and BOP (11.7 million).

    Sectors contributing to the performance include Banks (-129 points), Fertilizer (-78 points), Cement (-51 points), INv Banks (-37 points) and O&GMCs (-25 points).

    Volumes declined further from 211.4 million shares to 173.9 million shares (-18 percent DoD). Average traded value, on the contrary, increased by 12 percent to reach US$ 45.6 million as against US$ 40.7 million.

    Stocks that contributed significantly to the volumes include EFERT, TRG, BOP, WTL and SMBL, which formed 33 percent of total volumes.

    Stocks that contributed positively include FFC (+56 points), MARI (+44 points), COLG (+11 points), BAFL (+8 points) and FFBL (+8 points). Stocks that contributed negatively include ENGRO (-85 points), EFERT (-55 points), UBL (-38 points), HBL (-37 points), and DAWH (-33 points).

  • Rupee ends down by three paisas on import demand

    Rupee ends down by three paisas on import demand

    KARACHI: The Pak Rupee ended down by three paisas against dollar on Monday due to increase in demand for the foreign currency by importers and corporate buyers.

    The rupee ended at Rs154.60 to the dollar from last Friday’s closing of Rs154.57 in interbank foreign exchange market.

    The currency dealers said that the demand for the foreign currency was higher as market resumed trading after two days weekly holidays.

    The foreign currency market was initiated in the range of Rs154.58 and Rs154.62. The market recorded day high of Rs154.66 and low of Rs154.54 and closed at Rs4154.60.

    The exchange rate in open market witnessed stable rupee value. The buying and selling of dollar was recorded at Rs154.50/Rs154.80, the same last Friday’s closing, in cash ready market.

  • Pension granted total income tax exemption

    Pension granted total income tax exemption

    ISLAMABAD: Pensioners are allowed total exemption from tax on income received as pension.

    Officials in Federal Board of Revenue (FBR) on Monday said that pensioners are allowed complete exemption from income tax under Income Tax Ordinance, 2001.

    They said that any pension received by a citizen of Pakistan from a former employer will be exempted from income tax, other than where the person continues to work for the employer (or an associate of the employer).

    Provided that where the person receives more than one such pension, the exemption applies only to the higher of the pensions received.

    The exemption from income tax also available on any pension –

    (i) received in respect of services rendered by a member of the Armed Forces of Pakistan or Federal Government or a Provincial Government;

    (ii) granted under the relevant rules to the families and dependents of public servants or members of the Armed Forces of Pakistan who die during service.

    Any payment in the nature of commutation of pension received from Government or under any pension scheme approved by the FBR for the purpose of this clause is also exempted.

    Any income representing any payment received by way of gratuity or commutation of pension by an employee on his retirement or, in the event of his death, by his heirs as does not exceed –

    (i) in the case of an employee of the Government, a Local Government, a statutory body or corporation established by any law for the time being in force, the amount receivable in accordance with the rules and conditions of the employee’s services;

    (ii) any amount receivable from any gratuity fund approved by the Commissioner in accordance with the rules in Part III of the Sixth Schedule;

    (iii) in the case of any other employee, the amount not exceeding three hundred thousand rupees receivable under any scheme applicable to all employees of the employer and approved by the Board for the purposes of this sub-clause; and

    (iv) in the case of any employee to whom sub-clause (i), (ii) and (iii) do not apply, fifty per cent of the amount receivable or seventy-five thousand rupees, whichever is the less:

    Provided that nothing in this sub-clause shall apply –

    (a) to any payment which is not received in Pakistan;

    (b) to any payment received from a company by a director of such company who is not a regular employee of such company;

    (c) to any payment received by an employee who is not a resident individual; and to any gratuity received by an employee who has already received any gratuity from the same or any other employer.

  • Sales tax rate on services provided by stock brokers

    Sales tax rate on services provided by stock brokers

    KARACHI: Sindh Revenue Board (SRB) has updated working tariff for tax year and notified tax rates for services provided or rendered by specified persons or businesses.

    According to updated working tariff, the sales tax rates shall be applicable for following services:

    Stock brokers and commodity brokers shall pay sales tax at 13 percent on services provided or rendered by them.

    Underwriters shall be sales tax at the rate of 13 percent on services.

    Indenters are also required to pay 13 percent sales tax on services. However, services provided by indenters are subject to reduced rate of three percent sales tax on:

    1. Services provided or rendered by an indenter from a place of business in Sindh for which the registered person receives the value of the services from a place outside Pakistan in foreign exchange through banking channels in the business bank account of the registered person in the manner prescribed by the State Bank of Pakistan.

    2. Input tax credit/adjustment shall not be admissible.

    The sales tax rate shall be 13 percent on services provided by commission agents.

    Similarly, the rate of sales tax shall e 13 percent on services provided or rendered by packers and movers.

    Money changers are required to pay 13 percent sales tax on services However, there is exemption available on service provided or rendered by money changers in consideration of ‘spread’ charges as permitted by the State Bank of Pakistan in relation to the buying and selling of foreign currencies.

  • Import of mobile phones surges by 106% to Rs96.33 billion in first half

    Import of mobile phones surges by 106% to Rs96.33 billion in first half

    KARACHI: Pakistan has imported mobile phones worth Rs96.33 billion, showing an increase of 106 percent during first half (July – December) of 2019/2020.

    According to data released by Pakistan Bureau of Statistics (PBS), the import of mobile phones increased to Rs96.33 billion during first half of current fiscal year as compared with Rs46.82 billion in the same period of the last fiscal year.

    The rise in imported mobile phones was due to sharp decline in Pak Rupee during the period.

    According to State Bank of Pakistan (SBP) the exchange rate in December 2019 was Rs154.92 to the dollar as against the exchange rate of Rs138.47 in December 2018.

    In terms of US dollar the growth in imported mobile phones is still significant. The country spent $616.14 million during first half of current fiscal year as compared with $364.04 million in the corresponding period of the last fiscal year, showing growth of 69 percent.

    Despite this growth, the government reduced withholding income tax and sales tax on imported mobile phone.

    Through Tax Laws (Second Amendment) Ordinance, 2019 the government reduced sales tax and withholding income tax on import of mobile phones. The FBR attributed the reduction to promote digital economy in the country.

  • Draft return, wealth statement forms for traders finalized

    Draft return, wealth statement forms for traders finalized

    ISLAMABAD: Federal Board of Revenue (FBR) has finalized simple income tax return and wealth statement for small traders, sources said on Sunday.

    The FBR has not issued officially the draft returns and wealth statement forms for traders but sources said that the draft had been finalized and would be issued soon.

    The draft income tax return form has been simplified. The form is one-page with 15 entries to be filled.

    The traders are required to basic information including name, address, business assets and number of employees and bank account number.

    The description in required fields to be filed are included: turnover/receipts; cost of sales; opening stock; purchases; closing stock; other direct expenses; gross profit; overhead expenditure; net profit/taxable income; income from all other sources; tax chargeable; minimum tax; tax payable whichever is higher; tax already paid; net tax payable/refundable.

    The wealth statement form has also been simplified with small amount of required information.

    Draft income tax return form for traders:

    Draft wealth statement form for traders:

  • FBR starts phasing out final tax regime

    FBR starts phasing out final tax regime

    ISLAMABAD: Federal Board of Revenue (FBR) has started phasing out final tax regime for an equitable taxation system.

    Sources in the FBR said on Saturday that in the budget 2019/2020 final tax regime had been withdrawn for various sectors, which were enjoying this regime for the past many years.

    The FBR in a report said that income tax by its inherent nature is tax charged and levied on income.

    However some persons involved in certain transactions are not required to pay tax on their actual profit.

    Instead, the tax collected or deducted on these transactions is treated as final tax liability.

    Previously, this regime is available persons to such as commercial importers, commercial suppliers of goods, contractors, persons deriving brokerage or commission income and persons earning income from CNG stations.

    The tax collected or deducted from the aforesaid persons are now treated as minimum tax liability except for exporters, persons winning prizes and sellers of petroleum products.

    This measure is designed as a first step for gradual phasing out of the final tax regime and transition to income based taxation for all persons.

  • Experts suggest wheat import to discourage hoarding

    Experts suggest wheat import to discourage hoarding

    KARACHI: The government should allow the import of wheat in order to discourage hoarding and check price hikes in the local market, commodity experts said on Saturday.

    The prices of wheat flour witnessed a sharp increase during past couple of days.

    Interestingly, the wheat crop in the last season was surplus yet there is a sharp increase in the prices of wheat flour.

    The latest prices of wheat shot in between Rs55 and Rs58 for one kilogram. Whereas, after making to wheat flour the prices are in between Rs68 and Rs70 in the local market.

    Commodity expert Shamsul Islam Khan said that wheat prices were on the lower side in international markets.

    At present wheat is $215 per ton in the international market. In case of import of the commodity after including all costs the price of imported wheat in the local wheat would be around Rs40 per kilogram.

    The expert said it was surprising for a country having surplus wheat crop but still facing significant price hike.

    It is only due to hoarding by profiteers.

    The provincial governments are blamed for this hoarding because they had failed to buy surplus stock of wheat.

    The shortest possible solution for discourage hoarding, the expert said, the country should import the commodity.