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Author: Mrs. Anjum Shahnawaz

  • SBP imposes Rs1,123 million penalty on commercial banks for violating rules, regulations

    SBP imposes Rs1,123 million penalty on commercial banks for violating rules, regulations

    KARACHI: State Bank of Pakistan (SBP) has imposed penalty to the tune of Rs1,123 million during first quarter (July – September) of current fiscal year 2019/2020 for violating rules and regulations.

    The SBP has taken penal action against three banks for violating procedures in the areas of Know Your Customer (KYC) and Customers Due Diligence (CDD) and imposed fine to the tune of Rs133.32 million during the month of September 2019, the central bank said on Friday.

    The SBP imposed penalty of Rs56.61 million on Askari Bank, Rs63.805 million on Meezan Bank Limited and Rs12.906 million on MCB Islamic Bank Limited.

    In addition to penal action, the banks have been advised to strengthen its process related to KYC/CDD, in order to avoid occurrence of similar violations in future.

    The SBP imposed penalty amounting Rs805.1 million on 10 banks for violating anti-money laundering, due diligence of customers and foreign exchange regulations during the month of August 2019.

    The central bank issued details on Friday about action taken by the SBP against banks in order to plug loopholes in the banking system.

    The SBP initiated to make public the action taken by the central bank from July 2019 against commercial banks for violating prevailing rules and regulations and amount of penalty imposed on such banks.

    In the latest release of enforcement measures by the SBP also included action against leading banks including Habib Bank Limited and MCB Bank etc.

    The highest amount of penalty of Rs320.08 million has been imposed on Habib Bank Limited followed by MCB Bank of Rs159.152 million, Dubai Islamic Bank of Rs77.97 million.

    Following of are the significant enforcement actions by SBP during August-2019.

    01. Dubai Islamic Bank dated August 01 & 02, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs77.974 million was imposed mainly on deficiencies in the areas of AML/CFT. Moreover the bank has been advised timelines to rectify the operational lapses and improve the control environment to avoid recurrence of such lapses/violations in future.

    02. Habib Bank Limited dated August 02 & 03, 2019:

    Violations in the areas of AML/CFT, Consumer Protection

    Monetary penalty of Rs320.08 million was imposed mainly on deficiencies in the areas of AML/CFT and erroneous deduction of service charges from customers. The bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such lapses/violations in future.

    03. MCB Bank Limited dated August 03, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs159.152 million was imposed mainly on deficiencies in the areas of AML/CFT. The bank has been advised timelines to improve the KYC/CDD processes and integrate eKYC system with core banking system.

    04. Silkbank Limited dated August 03, 2019:

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs53.879 million was imposed mainly on violations of non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has been advised timelines to classify advances & create provision there against and conduct

    05. Bank Alfalah Limited dated August 03, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs52.795 million was imposed mainly on violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.

    06. Allied Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs32.755 million was imposed on breach of various limits of Equity Investment/related party and deficiencies in customer due diligence process. The bank has been advised timelines to bring equity Investment and exposure to related party group within the prescribed limit and revise KYC/CDD process.

    07. Sindh Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality, FX Operations

    Monetary penalty of Rs15.088 million was imposed mainly on deficiencies in customer due diligence practices, imprudent lending practices, non-classification of loans. Moreover, in view of the strategic deficiencies in Transaction monitoring system & name screening process, the bank has been advised an action plan/timelines for replacement of their existing TMS and acquiring of name screening solution.

    08. Summit Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs13.072 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization of loans and non classification of loans. The bank has been advised to timely update customer profiles & properly document the reasons of large value transactions.

    09. JS Bank Limited dated August 05, 2019

    Violations in the areas of AML/KYC, Asset Quality, Corporate Governance

    Monetary penalty of Rs70.307 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization and non classification of loans etc. The bank has been advised timelines to enhance its systems/process for customer risk profiling (CRP), transaction monitoring and identification of Politically Exposed Persons (PEPs).

    10. Habib Metropolitan Bank Limited dated August 19, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs10 million was imposed mainly on a violation of foreign exchange regulations relating to splitting of the import advance payments into smaller transactions.

    The SBP imposed penalty of Rs184.64 million upon four commercial banks for violating laws related to Anti-Money Laundering (AML)/Know Your Customer (KYC) during the month of July 2019.

    The central bank on Thursday said that these penalty amount was imposed during the month of July 2019 against banks included: The Bank of Punjab; JS Bank Limited, Bank Al Habib Limited and Soneri Bank.

    The SBP imposed penalty of Rs13.072 million against The Bank of Punjab on July 15, 2019 for violating in areas of foreign exchange operations.

    In addition to penal action, the bank has been advised to improve its internal processes, the SBP said.

    The Bank of Punjab was again penalized with Rs16.119 million on July 18, 2019 for violating in areas of AML/KYC, unclaimed deposits.

    In addition to penal action, the bank has been advised for improvements in the areas of AML/KYC, the central bank added.

    The SBP penalized JS Bank Limited with penalty amount of Rs48.211 million on July 23, 2019 for violating in areas of AML/KYC.

    In addition to penal action, the bank has been advised to conduct a thorough review of relationship accounts, the SBP said.

    The SBP imposed penalty of Rs51.75 million upon Bank Al Habib Limited on July 25, 2019 for violating in areas of AML/KYC, FX Operations.

    In addition to penal action, the bank has been advised to update its systems and processes, and provide appropriate trainings to the concerned officials, the SBP said.

    The SBP imposed penalty of Rs55.48 million upon Soneri Bank Limited on July 25, 2019 for violating in areas of AML/KYC, Asset Quality, FX Operations.

    In addition to penal action, the SBP advised the bank to improve areas of AML/KYC and credit risk monitoring.

  • FBR imposes major penalty on senior auditor for obtaining nationality of another country

    FBR imposes major penalty on senior auditor for obtaining nationality of another country

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty of ‘compulsory retirement’ upon a senior auditor for obtaining citizenship of another country and for visiting abroad by concealing facts of his government job.

    The FBR on Friday said that the inquiry proceedings were initiated against Tahir Gul, Senior Auditor (BS-16), RTO Islamabad on the directions of the Federal Services Tribunal (FST); by issuance of Charge Sheet and Statement of allegations by the Authorized Officer i .e. Chief Commissioner, Regional Tax Office, Islamabad.

    Mussaratullah Khan, Additional Commissioner, RTO Islamabad was appointed as the Inquiry Officer. The Inquiry Officer submitted Inquiry report dated 02.08.2019, on the basis of which the Authorized Officer recommended to the Authority for imposition of Major Penalty of “Dismissal from Service” under Rule 4(1)(b)(iv) of the Government Servants (Efficiency & Discipline), Rules 1973.

    The Authority i.e. Member (Admn) FBR, after considering the facts of the case, available record, recommendations of the Authorized Officer and verbal submissions of the Accused Officer during the personal hearing conducted on 26.09.2019; has been imposed Major Penalty of “Compulsory Retirement” upon Tahir Gul, Senior Auditor (BS-16), Regional Tax Office, Islamabad under rule 4(1)(b)(ii) of the Government Servants (Efficiency & Discipline) Rules, 1973 with immediate effect.

    The period of his absence since initial order of Removal from Service on 04.11.2011 till his reinstatement on the direction of FST with immediate effect, on 06.05.2019; shall be treated as Leave without pay and allowance.

    Mussaratullah Khan was awarded ‘removal from service’ through a notification on November 04, 2011, on the basis of following facts established against the official:

    i) He obtained Passport on mis-representation of facts showing him as an ordinary citizen and not a civil servant.

    ii) Proceeded abroad without approval of the competent authority/authorized leave.

    iii) Obtained citizenship of another country without permission of the Government.

    iv) He furnished bogus medical certificate.

  • FBR issues computation of taxable income for tax year 2020

    FBR issues computation of taxable income for tax year 2020

    KARACHI: Federal Board of Revenue (FBR) has issued computation of taxable income for the tax year 2020 (July 01, 2019 to June 30, 2020).

    The FBR issued Income Tax Ordinance, 2001 updated till June 30, 2019 under which the computation of taxable income for tax year 2020 has also been updated.

    According to Section 09 of the Ordinance, the taxable income of a person for a tax year shall be the total income under clause (a) of section 10 of the person for the year reduced (but not below zero) by the total of any deductible allowances under Part IX of this Chapter of the person for the year.

    Section 10: Total Income

    The total income of a person for a tax year shall be the sum of the –

    (a) person’s income under all heads of income for the year; and

    (b) person’s income exempt from tax under any of the provisions of this Ordinance.

    Section 11: Heads of income

    (1) For the purposes of the imposition of tax and the computation of total income, all income shall be classified under the following heads, namely: —

    (a) Salary;

    (b) Income from Property;

    (c) Income from Business;

    (d) Capital Gains; and

    (e) Income from Other Sources.

    (2) Subject to this Ordinance, the income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head.

    (3) Subject to this Ordinance, where the total deductions allowed under this Ordinance to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as sustaining a loss for that head for that year of an amount equal to the excess.

    (4) A loss for a head of income for a tax year shall be dealt with in accordance with Part VIII of this Chapter.

    (5) The income of a resident person under a head of income shall be computed by taking into account amounts that are Pakistan-source income and amounts that are foreign-source income.

    (6) The income of a non-resident person under a head of income shall be computed by taking into account only amounts that are Pakistan-source income.

  • Pakistan’s foreign exchange reserves fall by $769 million to $15 billion

    Pakistan’s foreign exchange reserves fall by $769 million to $15 billion

    KARACHI: Pakistan’s total foreign exchange reserves declined by $769 million to $15 billion by week ended September 27, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The total foreign exchange reserves of Pakistan declined by $768.9 million to $15.003 billion by week ended September 27, 2019 as compared with $15.772 billion a week ago.

    The official reserves held by the SBP came down by $723.7 million to $7.741 billion by week ended September 27, 2019 as compared with $8.465 billion a week ago.

    The SBP said that its official reserves were declined due to foreign debt repayment.

    The reserves held by commercial banks also fell by $45.2 million to $7.262 billion as compared with $7.307 billion a week ago.

    The foreign exchange reserves hit record high of $23.084 billion on week ended July 01, 2016.

  • FBR promotes 75 data entry operators to MIS officers

    FBR promotes 75 data entry operators to MIS officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday promoted 75 Data Entry Operator (DEOs) BS-12 to the post of Management of Information System (MIS) Officer BS-16 on regular basis with immediate effect and until further orders.

    The FBR has promoted top 75 senior DEOs, who were waiting for their promotions for a long time.

    Following is the list of promoted DEOs to the post of MIS Officers:

    Name and place of posting

    01. Abdul Hamid Khan, Large Taxpayers Unit (LTU), Lahore

    02. Muhammad Amin S/o Bashir Ahmad, Data Processing Center (DPC) Income Tax, Lahore.

    03. Aslam Javed Butt, DPC, Income Tax, Karachi.

    04. Muhammad Ismail S/o Ghulam Gilani, DPC, Income Tax, Karachi.

    05. Syed Junaid Saeed, DPC, Income Tax, Karachi.

    06. Tahir Hussain Khan, DPC, Income Tax, Karachi.

    07. Syed Tariq Ali, DPC, Income Tax, Rawalpindi.

    08. Khalid Mehmood Awan, DPC, Income Tax, Rawalpindi

    09. Tahir Ali, DPC, Income Tax, Karachi.

    10. Sabir Hussain Lashari, Regional Tax Office (RTO) Hyderabad.

    11. Raheela Baloch, RTO Hyderabad.

    12. Muhammad Iqbal S/o Muhammad Ishaq (late) DPC, Income Tax, Karachi.

    13. Idrees Ahmed, DPC, Income Tax, Lahore.

    14. Parvez H Rizvi, DPC, Income Tax, Karachi.

    15. Kamal Haider, DPC, Income Tax, Karachi.

    16. S. Shafaat Hussain Naqvi, DPC, Income Tax, Multan.

    17. Muhammad Mashkoor Khan, LTU Karachi.

    18. S. M. Sharique, DPC, Income Tax, Karachi.

    19. Kafil Ahmed Jamali, DPC, Income Tax, Karachi.

    20. Shagufta Naz, Chief Coordinator Computer Wing, Income Tax, Islamabad.

    21. Farida Essa, Directorate of Internal Audit (Inland Revenue), Islamabad.

    22. Kauser Parveen, DPC, Income Tax, Karachi.

    23. Muhammad Saleem, DPC, Income Tax, Karachi.

    24. Mansoor Ahmed, DPC, Income Tax, Karachi.

    25. Nadeem Yousuf Zai, DPC, Income Tax, Karachi.

    26. Shahzad Saleem, RTO-II, Karachi.

    27. Iffat Irfani, DPC, Income Tax, Karachi.

    28. Nasir Khan Baloch, DPC, Income Tax, Karachi.

    29. Muhammad Saeed Hussain Shah, DPC, Income Tax, Rawalpindi.

    30. Riaz Ahmed, DPC, Income Tax, Rawalpindi.

    31. Muhammad Iqbal, RTO, Faisalabad.

    32. Saqib Ahmed Siddiqui, DPC, Income Tax, Peshawar.

    33. Zafar Iqbal, DPC, Income Tax, Peshawar.

    34. Ashraf Sohaib, RTO-II, Karachi.

    35. Raheela Hakim, DPC, Income Tax, Karachi.

    36. Shabbir Hussain, RTO, Faisalabad.

    37. Saeed Tahir, DPC, Income Tax, Rawalpindi.

    38. Muhammad Aslam, DPC, Income Tax, Rawalpindi.

    39. Muhammad Rashid Bhatti, RTO-II Lahore.

    40. Nadeem Ul Hasan, Directorate of Intelligence and Investigation, Inland Revenue, Karachi.

    41. Malik Saeed Ahmed, DPC, Income Tax, Multan.

    42. Ghulam Ali Malik, FBR Headquarter, Islamabad.

    43. Imran Ahmed Khan, RTO-II, Lahore.

    44. Shahid Iqbal, DPC, Income Tax, Multan.

    45. Saifullah Bughio, RTO Hyderabad.

    46. Abdul Aziz, LTU Karachi.

    47. Muhammad Arif Mushtaq, LTU Karachi.

    48. Azmatullah, RTO-II Karachi.

    49. Syed Musheeruddin, LTU Karachi.

    50. Mukhtar Jagirani, LTU Karachi.

    51. Farrukh Saeed, DPC, Income Tax, Karachi.

    52. Obaidullah Naeem, DPC, Income Tax, Karachi.

    53. Muhammad Zahid S/o Hamid Ahmed Usmani, RTO Quetta.

    54. Irfan Sabir, RTO Quetta.

    55. Zafar Hassain, LTU Karachi.

    56. Saleem Siddiqui, DPC, Income Tax, Karachi.

    57. Syed Yousuf, LTU Karachi.

    58. Malik Nasar Javed, DPC, Income Tax, Karachi.

    59. Shabana Talat Siddiqui, RTO-III, Karachi.

    60. Wajid Hussain, DPC, Income Tax, Karachi.

    61. Sahir Farooqui, DPC, Income Tax, Karachi.

    62. Noor Hayat Khan, Corporate RTO, Karachi.

    63. Sh. M. Ismail S/o Shaikh Muhammad Ramzan, DPC, Income Tax, Karachi.

    64. Ayaz Haider, RTO Peshawar.

    65. Muhammad Yousuf Khan, LTU-II Karachi.

    66. Muhammad Amin, DPC, Income Tax, Rawalpindi.

    67. Muhammad Atif khan, DPC, Income Tax, Rawalpindi.

    68. Iftikhar Ahmed, DPC, Income Tax, Rawalpindi.

    69. Gul Khan, DPC, Income Tax, Rawalpindi.

    70. Abdul Rauf Siddiqui, RTO-II, Lahore.

    71. Ejaz Ahmed Butt, DPC Income Tax, Rawalpindi.

    72. Naveed Mirza, DPC, Income Tax, Lahore.

    73. Ghulam Muhammad Toor, DPC, Income Tax, Multan.

    74. Asif Hussain, RTO Sialkot.

    75. Arshad Mehmood, RTO Rawalpindi

    The FBR said that the promoted officers would be on probation for a period of one year, extendable, for a further period not exceeding one year, provided that if no order is issued by the day of following the termination of probationary period, the appointment shall be deemed to be held until further orders.

    The officers already drawing performance allowance equal to 100 percent of the basic pay will continue to draw the same on their promotion.

  • Stock market gains 389 points as COAS meeting boost confidence

    Stock market gains 389 points as COAS meeting boost confidence

    KARACHI: The stock market gained 389 points on Thursday as sentiments of business community were high after meeting with Chief of Army Staff (COAS).

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,752 points as against 32,363 points showing an increase of 389 points.

    Analysts at Arif Habib Limited said that the market stayed pumped up the entire session after an initial drop of 83 points earlier in the session.

    Although oil prices showed negative trend, E&P scrips managed to stay afloat with nominal price gains. Several stocks in Cement, Refinery and OMCs hit upper circuit.

    Meeting of businessmen with Army Chief improved sentiments at the bourse, with the expectation of concrete steps being taken now onwards.

    Investors put fears of FATF, higher interest rate and Inflationary concerns on the back burner and took positive view on market.

    Overall volumes hit a new high of CY19 with 324 million shares. Cement sector led the volumes with 39.1 million shares, followed by Power (+37.8 million) and Engineering (31.6 million).

    Among scrips, KEL managed to post 35.7 million shares followed by UNITY (22.7 million) and DSL (11.8 million).

    Sectors contributing to the performance include Banks (+90 points), Cement (+65 points), Fertilizer (+55 points), Power (+40 points), O&GMCs (+27 points).

    Volumes hit an 11month high of 324.1 million shares against 181.4 million shares (+79 percent DoD). Average traded value also surged by 68 percent DoD to reach US$ 58.2 million as against US$ 34.7 million.

    Stocks that contributed significantly to the volumes include KEL, UNITY, DSL, MLCF and TRG, which formed 29 percent of total volumes.

    Stocks that contributed positively include HBL (+31 points), LUCK (+28 points), ENGRO (+24 points), KEL (+20 points) and FFC (+20 points). Stocks that contributed negatively include POL (-9 points), MUREB (-6 points), COLG (-5 points), NESTLE (-3 points), and GHGL (-3 points).

  • Customs official awarded major penalty for corruption, misconduct

    Customs official awarded major penalty for corruption, misconduct

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty of ‘compulsory retirement’ upon a BS-16 officials of Pakistan Customs on charges of corruption, misconduct and inefficiency.

    According to an official note issued on Thursday the FBR said that disciplinary proceedings under Government Servants (Efficiency & Discipline) Rules, 1973 were initiated against Mansab Shah, Inspector (BS-16), Model Customs Collectorate of Preventive, Lahore on account of “Inefficiency”, “Misconduct” and “Corruption” under E&D, Rules 1973 after placing him under suspension vide notification 25.03.2019.

    “On receipt of preliminary fact finding inquiry report, all charges were established.”

    A Show Cause Notice dated 27.03.2019 was accordingly issued to him and he was also called for personal hearing by the Authorized Officer / Collector, MCC (Preventive), Lahore on 28.05.2019.

    After considering the charges framed in the charge sheet and other available record, the Authorized Officer / Collector, MCC (Preventive), Lahore recommended to the Authority for imposition of major penalty of Compulsory Retirement.

    The Member (Admn) FBR being Authority in this case, after having considered all aspects of the case and the recommendations of the Authorized Officer has therefore, imposed the major penalty of “Compulsory Retirement” upon Mansab Shah, Inspector, under rule 4(1)(b)(ii) of the Govt. Servants (Efficiency & Discipline) Rules, 1973 with immediate effect.

    The period of suspension of the accused officer w.e.f 25.03.2019 till date will be treated as a leave of kind due as admissible under the rules.

    The official shall have right of Appeal as admissible in the Civil Servants (Appeal) Rules, 1977.

  • Rupee ends flat in range bound trading

    Rupee ends flat in range bound trading

    The Pakistani rupee remained largely stable against the US dollar on Thursday, closing in a tight range-bound session in the interbank foreign exchange market.

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  • FBR issues fresh list of sectors allowed input tax adjustment

    FBR issues fresh list of sectors allowed input tax adjustment

    ISLAMABAD: Federal Board of Revenue (FBR) has issued fresh list of sectors to allow input adjustment by amending the Section 8B of Sales Tax Act, 1990.

    The FBR issued SRO 1190(I)/2019 on Thursday in suppression of its previous SRO 647(I)/2007 dated June 27, 2007.

    The following sectors have been allowed input adjustment and refunds:

    01. Persons registered in electrical energy sector.

    02. Oil marketing companies and petroleum refineries.

    03. Fertilizers manufacturers.

    04. Persons making zero-rated supplies, including exports, provided that value of such supplies exceeds 50 percent of value of all taxable supplies in a tax period.

    05. Distributors.

    06. Gas distribution companies.

    07. Telecommunication services.

    08. Pakistan Steel, Bin Qasim, Karachi.

    09. Registered persons other than manufacturers, making supplies of items covered under the Third Schedule to the Sales tax Act, 1990, on which sales tax has been paid by the manufacturer or importer on retail price, provided that value of such supplies exceeds 80 percent of value of all taxable supplies in a tax period.

    10. Commercial importers where value of import subject to 3 percent value addition as prescribed in Twelfth Schedule to the Act exceeds 50 percent of value of all taxable purchases, including imports, in a tax period.

    Through the latest SRO the retailers also importing goods in bulk and operating chain stores have been allowed adjustment of input tax to the extent of 95 percent of the output tax for the tax period and the excess amount shall be carried forward to the next period.

    The FBR further said that the first proviso of sub-section (1) and sub-section (2) and (3) of Section 8B of the Sales Tax Act, 1990, shall apply, mutatis mutandis, to the input tax to be adjusted or carried forward as provided in clause (b).

  • NCCPL to collect capital gain tax on October 09

    NCCPL to collect capital gain tax on October 09

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) has announced that it will collect Capital Gain Tax (CGT) on disposal of shares on October 09, 2019 for the period July and August.

    Informing the Pakistan Stock Exchange (PSX), the NCCPL said that the aggregate amount of CGT arising on disposal of shares at PSX for the period July01, 2019 to August31, 2019, would be collected on Wednesday October 9, 2019 through respective settling banks of the Clearing Members.

    All Clearing Members are hereby requested to ensure requisite amount in the irrespective settling bank’s account.

    Necessary details and reports for the said period have already been made available in the CGT System.

    Clearing Members have been asked to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.
    In case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations, the NCCPL said.

    NCCPL collects advance tax from the members of Stock Exchange registered in Pakistan, margin financiers, trading financiers and lenders],in respect of margin financing in share business or providing of any margin financing, margin trading or securities lending under Securities (Leveraged Markets and Pledging) Rules, 2011 in share business] at the rate specified in Division IIB of Part IV of First Schedule.