MANILA, PHILIPPINES: The Asian Development Bank (ADB) on Friday approved $1 billion in immediate budget support to Pakistan to shore up the country’s public finances and help strengthen a slowing economy, a statement said.
(more…)Author: Mrs. Anjum Shahnawaz
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Tax authorities to receive bulk information of bank account holders after disposal of court cases
KARACHI: Tax authorities will receive a huge bunch of financial transactions from banks after a court dispose of all the petitions that were restricting the tax authorities to obtain information.
Sindh High Court on Thursday disposed of petitions by banks. The disposal of cases has now allowed the Federal Board of Revenue (FBR) to obtain information of bank account holders making financial transactions in the undocumented economy.
The disposal of petitions came after an agreement signed between FBR and Pakistan Banks Association (PBA) on November 27, 2019.
The FBR sources said that the tax authorities would able to access the information of banking account holders. The FBR has been authorized to obtain information from banks under Section 165A of the Income Tax Ordinance, 2001.
This section was introduced through Finance Act, 2013. However the implementation of the section was remained subjudice before the courts for the last six years.
The FBR sources said that the section was introduced to detect persons having taxable income but remained outside of the tax net. They said that the disposal of the cases by the higher court would give boost to the broadening of tax efforts of the FBR.
The FBR will get following information under Section 165A:
(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—
(a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month.”;
(b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;
(c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;
“(d) a list of persons receiving profit on debt exceeding five hundred thousand rupees and tax deductions thereon during preceding financial year.”
(2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.
(3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.
(5) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.
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FBR to issue around Rs3 billion tax refunds in next couple of days: Hafeez Shaikh
ISLAMABAD: Federal Board of Revenue (FBR) will issue another Rs2 to 3 billion tax refunds in next couple of days, Dr. Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue, said on Thursday in a meeting with leading businessmen.
The adviser told the businessmen that FBR was working very hard to facilitate the exporters and another Rs 2 to 3 billion tax refunds would also be issued within the next couple of days.
The meeting discussed and reviewed progress on the issues pertaining to payment of Sales Tax refunds to exporters.
Adviser to Adviser Commerce Ali Habib, Chairman FBR Syed Shabbar Zaidi and Secretary Finance Naveed Kamran Baloch were also present in the meeting which was attended by leading exporters from Lahore and Karachi, including Shahid Soorty, Musaadiq Zulqarnain, Fawad Anwer, Shahid Abdullah, Bashir Ali Mohammad, Rizwan Dewan, Asif Tata, Ahmed Ibrahim, Sameer Chinoy and Khurram Mukhtar.
During the proposals, various proposals were put forward from the businessmen and exporters and FBR was advised to work more aggressively on reforming and simplifying the processes through automation for early and prompt payment of sales tax refunds.
He told the businessmen he had already constituted a committee comprising officials from FBR and members of APTMA to simplify the Form-H within the next few days to make it simpler and easy for the exporters claiming sales tax refunds.
The businessmen were asked to nominate anyone they liked to become part of the Committee as he wanted to ensure a hassle-free submission of tax refund claims and their subsequent payment without any delay.
The businessmen thanked the Adviser and his team in FBR for ensuring payment of Rs 32 billion sales tax refunds to the exporters in the last couple of days.
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SECP, ADB organize consultation workshop on financial market development
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) and Asian Development Bank (ADB) jointly organized a workshop for stakeholder consultations on Financial Market Development 2020-2025, a statement said on Thursday.
The long term roadmap will be focusing on demand and supply measures to broaden and deepen the financial system in Pakistan.
Senior level representatives from the ADB, State Bank of Pakistan, SECP and representatives of stock exchange, central depository, national clearing company and market participants attended the brainstorming session.
In his welcoming remarks, SECP Chairman Aamir Khan affirmed that SECP’s foremost obligation remains towards building a regulatory environment that is sound, efficient and cost-effective.
“Yet, I am equally passionate about ensuring that it is empowering for business growth. One must not be sacrificed at the cost of the other. We need to be fiercely vigilant in the pursuit of transparency, yet be tirelessly focused on reducing regulatory barriers and cost of doing business,” said the SECP Chairman.
Regarding the projected roadmap, Khan opinioned that supporting multi-stage financing needs of start-ups and SMEs, increasing the number of retail investors, strengthening the role of institutional investors, creating an active bond market and promoting infrastructure-financing vehicles would be core constituents of the future roadmap.
However, he emphasized, the roadmap must entail a broad and deep consensus between the SECP, and other relevant stakeholders in the public and private sectors.
SECP Commissioner Securities Market, Shauzab Ali, gave his views on SECP’s approach to the reform plans already being undertaken by the regulator, challenges and opportunities.
A team of international experts facilitated the workshop with a view to consolidate market feedback on the various on the supply and demand side constraints, along with recommendations for reform.
ADB Deputy Country Director for Pakistan, Asif Cheema, stated that the proposed Financial Markets Development Program is in line with ADB’s Strategy 2030, which prioritizes the development of the financial sector and capital markets to support the development of the private sector and enhance financial stability.
This program will build upon ADB’s earlier support for development of Pakistan’s capital markets over the past two decades.
Cheema also reiterated the need for government ownership for implementation of the master plan.
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SBP directs banks to prepare depositor-wise database
KARACHI: The State Bank of Pakistan (SBP) on Thursday directed banks to prepared a comprehensive depositor-wise database/ Management Information System.
A key element of the information system is its capacity to calculate, on any given date, total liability of a bank towards each of its depositors including any interest/ profit accrued on such deposits and generate a report referred as “Single Depositor View (SDV)”.
This would enable Deposit Protection Corporation (DPC) of the central bank to assess the amounts payable to protected depositors and making payout in case of a bank’s failure.
In order to achieve banking industry-wide standardization of SDV report, a standard format of the report has been developed by the DPC.
Furthermore, with a view to facilitate banks in understanding the fields of report and reporting requirements, a document titled “Explanatory Notes on Single Depositor View (SDV) Data” has also been prepared.
The explanatory notes provide explanation of various terms used for SDV data compilation together with clarity on classification of depositors, and balance calculations for protected depositors.
Considering the distinct nature of SDV concept, the banks have been accorded the extension in deadline for the development of information system/ database, as referred in para 10 of DPC Circular No. 01 of 2019, until January 31, 2020.
In this regard, banks are advised to provide a progress report on development of their information system by December 31, 2019.
Going forward, DPC shall assess the system’s readiness and efficacy through SBP-inspection teams or by its designated staff for the purpose.
The member banks are also required to submit first such report of the position of depositors, as per formats as of December 31, 2019 by February 15, 2020 and then onwards on quarterly basis.
DPC had issued Circular No. 01 of 2019 dated March 15, 2019 on ‘Information System for Protected Depositors of Member Banks’ where all member banks were required to appropriately install or update their systems including software(s)/ database(s) for maintaining a comprehensive depositor-wise database. Such a database is required to identify, on any given date, all accounts of any single depositor and calculate the total liability of a bank towards that depositor (including any interest/ profit accrued till the given date) referred as “Single Depositor View (SDV)”.
The SBP said that at present, multiple core banking systems are available across banks with each bank relying on a specific system having its own data structure and alignment of different information fields.
Therefore, it is felt necessary that instructions on development of aforesaid Information System should be supplemented with a standardized format having specific arrangement of data fields for compliance by banks to assess total liability of a bank towards a single depositor.
In absence of such a format and prescribed data fields, there is a possibility that the banks would end up producing SDV data on different non-comparable formats.
Hence, DPC has decided to issue a Standardized Report Format (SRF) to enable banks to compile SDV data as per requirements of reimbursement.
The SRF contains 44 data fields relevant to information on eligible depositors of a bank and available at Annexure A. All banks are required to follow the taxonomy of SRF to maintain consistency in SDV data reporting across banks.
The document also explains various terms used in SDV data compilation along with classification guidelines, reporting timelines, medium of reporting and examples on balance calculations.
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Pakistan’s foreign exchange reserves increase by $416 million to $15.993 billion
KARACHI: The liquid foreign exchange reserves of Pakistan increased by $416 million to $15.993 billion by week ended November 29, 2019, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $15.577 billion a week ago.
The reserves held by the central bank grew by $431 million to $9.113 billion as compared with $8.682 billion a week ago.
The central bank said that during this fiscal year SBP reserves have increased by $1.8 billion.
The FX swaps / forward liabilities have reduced by $1.95 billion between June-October 2019.
Increase in the liquid SBP reserves and the reduction of the swaps / forward liabilities reflects the build-up of FX buffers, the SBP said.
The reserves held by commercial banks, however, reduced by $15 million to $6.88 billion by week ended November 29, 2019 as compared with $6.895 billion a week ago.
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Stock market gains 371 points on improved rating of top banks
KARACHI: The stock market gained 371 points on Thursday owing to improved rating of top five banks of Pakistan.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,641 points as against 40,271 points showing an increase of 371 points.
Analysts at Arif Habib Limited said that following up the country ratings, Moody’s improved the rating for 5 Pakistan Banks as well, which caused the price gains in banking sector stocks in general, besides buying activity in cyclicals.
News of increase in cement dispatches over the 5 month period also gave confidence to investors to invest in Cement as well as Steel sector.
The benchmark KSE100 index recorded highest traded value for CY2019 so far with US$ 129.6 million. Traded volumes also crossed 500 million mark again with majority in Cement sector (111.6 million), followed by Banks (51.4 million) and Power (36.6 million).
Among scrips, UNITY registered volumes of 35.2 million shares followed by FCCL (34 million) and MLCF (20.5 million).
Sectors contributing to the performance include Banks (+105 points), E&P (+80 points), O&GMCs (+55 points), Cement (+54 points) and Fertilizer (+29 points).
Volumes increased significantly from 393.2 million shares to 507.5 million shares (+29.1 percent DoD). Average traded value also increased by 36 percent to reach US$ 129.6 million as against US$ 95.4 million.
Stocks that contributed significantly to the volumes include UNITY, FCCL, MLCF, KEL and TRG, which formed 25 percent of total volumes.
Stocks that contributed positively include PPL (+53 points), HBL (+42 points), PSO (+28 points), POL (+26 points) and NBP (+24 points). Stocks that contributed negatively include GLAXO (-9 points), MARI (-9 points), DAWH (-8 points), MTL (-7 points), and KAPCO (-5 points).
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Rupee makes gain for third consecutive day against dollar
The Pakistani rupee strengthened against the US dollar for the third consecutive day on Thursday, driven by improved foreign currency inflows in the form of export proceeds and workers’ remittances.
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FBR attaches shareholding of Golden Globe Holding in Benami properties case
KARACHI: Federal Board of Revenue (FBR) has attached shareholding of Golden Globe Holding in Thatta Cement in Benami properties case, according to a notice issued on Thursday.
Thatta Cement Company Limited in a notice sent to Pakistan Stock Exchange (PSX) informed that in order issued by deputy commissioner/initiating officer, Inland Revenue Division of FBR (Anti Banmi Zone-III) to M/s. Golden Globe Holding (Pvt) Limited informing them that FBR official had provisionally attached, for the period of 90 days, the shareholding of M/s. Golden Globe Holding (Pvt) Limited in Thatta Cement Company Limited.
Sources in the FBR said that the properties had been attached as per the law defined in Benami Transaction Act, 2017.
They said that initiating office had been authorized to provisionally attach a benami property for a period of 90 days if he thinks that the person in possession.
They further said that the officer had also been authorized to pass an order continuing the provisional attachment of the property with the prior approval of the approving authority, the passing of the order made by the adjudicating authority.
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Salary persons having income above Rs400,000 require to file return for tax year 2019
KARACHI: Persons driving salary income above Rs400,000 are remained liable to file annual income tax returns for tax year 2019.
Through Finance Act, 2019 the threshold income for salary persons for the purpose of income tax deduction has been increased to Rs600,000. However, this threshold is applicable for the tax year 2020.
The last date for filing income tax returns for tax year 2019 is December 16, 2019, which was extended third time. The actual filing date was due on September 30, 2019.
Following is the table of income for salary persons required to file their income tax returns for tax year 2019:
S. No. Taxable income Rate of tax (1) (2) (3) 1. Where the taxable income does not exceed Rs. 400,000 0% 2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 800,000 Rs. 1,000 3. Where the taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000 Rs. 2,000 4. Where the taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,500,000 5% of the amount exceeding Rs. 1,200,000 5. Where the taxable income exceeds Rs.2,500,000 but does not exceed Rs. 4,000,000 65,000 + 15% of the amount exceeding Rs. 2,500,000 6. Where the taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 8,000,000 290,000 + 20% of the amount exceeding Rs. 4,000,000 7. Where the taxable income exceeds Rs. 8,000,000 1,090,000 + 25% of the amount exceeding Rs. 8,000,000 However, this rate of tax is applicable where head salary exceeds 50 percent of taxable income of a salary person.
The FBR further clarified that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.