Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • SBP governor emphasizes on rapid digitization of payments; cash payments major hurdle in documentation of economy

    SBP governor emphasizes on rapid digitization of payments; cash payments major hurdle in documentation of economy

    KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) has said that cash payments are major hindrance in documentation of economy and stressed the need for rapid digitization of payment system.

    The SBP governor was addressing on Saturday at a workshop titled ‘Digital Payments Reforms’ organized by the central bank in collaboration with the World Bank at its headquarters in Karachi.

    Dr. Reza Baqir, highlighted the issues that have been longstanding and needed attention of all the stakeholders.

    The governor emphasized the need for rapid digitization of payments in order to realize the full benefits for the economy as cash is still the preferred mode of payments for our routine and day to day activities.

    He noted that the heavy reliance on cash and the limited use of digital channels reduces economic efficiency, hinders financial and economic development and impedes the goal of documenting the economy.

    To address these issues, he emphasized the importance of building a modern and robust payment system in the country that enables the provision of cost effective and easily available digital financial services to the general public. This, he stated is a key strategic objective of SBP.

    Governor Baqir shared SBP’s plans for leading an aggressive adoption and implementation of the National Payment Systems Strategy in the country.

    He emphasized that interoperability is key to achieving faster digitization goals. Governor also informed the participants that a new faster payment gateway will be launched next year to facilitate instant transfer of funds.

    He identified government payments and receipts and merchant payments to be the key elements in accelerating digitization of payments in the country.

    He also noted the need for reducing the high cost, especially the interchange fee in the payments industry and emphasized to all stakeholders to work collaboratively for increasing digital access points in the country.

    The objective of the workshop was to share the draft National Payment Systems Strategy and solicit the input of key stakeholders involved in its implementation.

    The workshop was attended by senior officials from PTA, NADRA, SECP, FBR, the PM office’s Strategic Reforms and Implementation Unit, Banks, Telcos, Electronic Money Institution (EMIs), PSO/PSPs and Fintechs.

    Governor SBP, Dr. Reza Baqir led the workshop, while Chairman PTA, Major General (Retired) Amir Azeem Bajwa, and Country Director World Bank, Illango Patchamuthu were also present at the occasion.

    Stakeholders who attended the meeting shared valuable suggestions for increasing the pace of digitization of payment system. The discussion led to the identification of a number of next steps for the group.

    At the conclusion of the meeting, Governor Baqir thanked the participants for their concrete and specific suggestions which would help improve the development and implementation of the National Payment Systems Strategy.

  • FBR explains salary tax to be chargeable for Tax Year 2020

    FBR explains salary tax to be chargeable for Tax Year 2020

    KARACHI: Federal Board of Revenue (FBR) has explained the treatment of salary tax to be applicable during Tax Year 2020.

    The FBR issued Income Tax Ordinance, 2001 updated till June 30, 2019 and explained the taxability on salary received by an employee.

    Under Section 12 of the Income Tax Ordinance, 2001 the salary chargeable to tax as:

    Section 12: Salary

    Sub-Section (1): Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.

    Sub-Section (2): Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including —

    (a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions);

    (b) any perquisite, whether convertible to money or not;

    (c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment;

    (d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment;

    (e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received —

    (i) as consideration for a person’s agreement to enter into an employment relationship;

    (ii) as consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment;

    (iii) on termination of employment, whether paid voluntarily or under an agreement, including any compensation for redundancy or loss of employment and golden handshake payments;

    (iv) from a provident or other fund, to the extent to which the amount is not a repayment of contributions made by the employee to the fund in respect of which the employee was not entitled to a deduction; and

    (v) as consideration for an employee’s agreement to a restrictive covenant in respect of any past, present or prospective employment;

    (f) any pension or annuity, or any supplement to a pension or annuity; and

    (g) any amount chargeable to tax as “Salary” under section 14.

    Sub-Section (3): Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head “Salary” shall be grossed up by the amount of tax payable by the employer.

    Sub-Section (4): No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary”.

    Sub-Section (5): For the purposes of this Ordinance, an amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided —

    (a) by the employee’s employer, an associate of the employer, or by a third party under an arrangement with the employer or an associate of the employer;

    (b) by a past employer or a prospective employer; or

    (c) to the employee or to an associate of the employee or to a third party under an agreement with the employee or an associate of the employee.

    Sub-Section (6): An employee who has received an amount referred to in sub-clause (iii) of clause (e) of sub-section (2) in a tax year may, by notice in writing to the Commissioner, elect for the amount to be taxed at the rate computed in accordance with the following formula, namely: —

    A/B%

    where —

    A is the total tax paid or payable by the employee on the employee’s total taxable income for the three preceding tax years; and

    B is the employee’s total taxable income for the three preceding tax years.

    Sub-Section (7): Where —

    (a) any amount chargeable under the head “Salary” is paid to an employee in arrears; and

    (b) as a result the employee is chargeable at higher rates of tax than would have been applicable if the amount had been paid to the employee in the tax year in which the services were rendered, the employee may, by notice in writing to the Commissioner, elect for the amount to be taxed at the rates of tax that would have been applicable if the salary had been paid to the employee in the tax year in which the services were rendered.

    Sub –Section (8) An election under sub-section (6) or (7) shall be made by the due date for furnishing the employee’s return of income or employer certificate, as the case may be, for the tax year in which the amount was received or by such later date as the Commissioner may allow.

  • Weekly Review: market to stay positive

    Weekly Review: market to stay positive

    KARACHI: The stock market likely to stay positive during next week but there are chances of profit taking, analysts said.

    Analysts at Arif Habib Limited said that the market to remain positive in the coming week. However profit-taking cannot be ruled out.

    Major developments next week include PM Khan’s visit to China aimed at reviving CPEC Projects and removing impediments.

    The KSE-100 index is currently trading at a PER of 5.8x (2020) compared to Asia Pac regional average of 13.0x and while offering DY of ~9.4 percent versus ~2.5 percent offered by the region.

    KSE-100 commenced on a positive note this week amid 1QFY19 tax collection being reported at 90 percent of the IMF target. Investors’ expectations seemed to reflect optimism with regards to the first quarter IMF targets being met.

    Moreover news of increase in cement prices in the Northern Region as per PBS was the major driver for the Cement sector throughout the week.

    Later in the week a meeting of business community with the Army Chief and PM Khan improved the sentiment further due to anticipation of remedial measures to address outstanding economic issues.

    Despite decline in international crude oil prices the Oil & Gas Exploration scrips resisted pressure. The overall positivity in the investment climate was complimented by jubilant volumes. The KSE-100 index gained 962 points (up by 3.00 percent) WoW, closing at 33,033 points.

    Sector-wise positive contributions came from i) Commercial Banks (231 points), ii) Cements (189 points), iii) Power Generation & Distribution (96 points), iv) Oil & Gas Marketing (93 points), and v) Fertilizer (68 points). Scrip-wise positive contributions were led by HBL (103 points), HUBC (52 points), ENGRO (51 points), DGKC (50 points) and NBP (50 points).

    Foreign selling continued this week clocking-in at USD 4.7 million compared to a net sell of USD 8.8 million last week. Selling was witnessed in Commercial Banks (USD 4.6 million) and Food and Personal Care (USD 1.7 million).

    On the domestic front, major buying was reported by Other Organizations (USD 4.9 million) and individuals (USD 4.4 million). Average Volumes settled at 223 million shares (up by 106 percent WoW) while average value traded clocked-in at USD 40 million (up by 58 percent WoW).

  • Ban on trade with India not to apply shipment of documents

    Ban on trade with India not to apply shipment of documents

    ISLAMABAD: The ministry of commerce has said that ban on trade with India will not apply on the shipment of documents related to personal or ministries.

    The ministry issued a clarification in this regard through an office memorandum dated October 03, 2019, stated that the bilateral trade with India was suspended through SROs 927 and 928 issued on August 09, 2019.

    “However, it is clarified that the suspension of trade with India will not apply to the shipment of documents e.g. personal and business documents, documents of government ministries, diplomatic mission, banks and greeting cards, etc.”

  • FBR notifies major reshuffle in Pakistan Customs Service; 35 officers transferred

    FBR notifies major reshuffle in Pakistan Customs Service; 35 officers transferred

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday in a major reshuffle transferred and posted 35 officers of Pakistan Customs Service (PCS) from BS-17 to BS-21 with immediate effect and until further orders.

    (more…)
  • FBR warns sellers against using CNICs of employees to fulfill condition

    FBR warns sellers against using CNICs of employees to fulfill condition

    ISLAMABAD: Federal Board of Revenue (FBR) has warned sellers against using CNIC/NTN of their employees to fulfill condition in case supplies made to unregistered persons.

    The FBR on Friday issued Sales Tax General Order (STGO) No. 106/2019 regarding definition / rules for CNIC/ good faith for sales tax.

    Keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

    (a) The tax invoice complies with the requirements of section 23(b) of the Act.
    (b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.
    (c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).
    (d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

    The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity of being heard.

  • Rupee falls by 18 paisas on import, corporate payments

    Rupee falls by 18 paisas on import, corporate payments

    KARACHI: The Pak Rupee depreciated by 18 paisas against dollar on Friday owing to higher demand for import and corporate payments.

    The rupee ended Rs156.54 to the dollar from previous day’s closing of Rs156.36 in interbank foreign exchange market.

    Currency dealers said that the market witnessed higher demand for import and corporate payments due to weekly holidays ahead.

    The foreign currency market was initiated in the range of Rs156.38 and Rs156.43. The market recorded day high of Rs156.55 and low of Rs156.40 and closed at Rs156.54.

    The exchange rate in open market also witnessed depreciation of local currency. The buying and selling of dollar was recorded at Rs156.20/Rs156.70 from previous day’s closing of Rs156.00/Rs156.50 in cash ready market.

  • Stock market gains 281 points on buying activities

    Stock market gains 281 points on buying activities

    KARACHI: The stock market gained 281 points on Friday owing to buying activities seen in various sectors.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,033 points as against 32,752 points showing an increase of 281 points.

    Analysts at Arif Habib Limited said that buying activity was mainly seen in Cement and Steel sectors, and was further aided by O&GMCs, E&P and Banks.

    Optimism in the market is fueled by the meeting of leading businessmen with the Army Chief, the Prime Minister and his Economic team and has given hope to market participants of resolution of issues that were affecting the bourse for long.

    Technology Sector topped the volumes with 50.1 million shares followed by Cement (35.8 million) and Engineering (+31.1 million).

    Among scrips, WTL stood out with 33.2 million shares along with DSL (15.2 million) and UNITY (13.5 million).

    Sectors contributing to the performance include E&P (+60 points), Banks (+36 points), O&GMCs (+35 points), Fertilizer (+31 points), Power (+30 points).

    Volumes declined as compared to yesterday from 324 million shares to 261.7 million shares (-19 percent DoD). Average traded value also declined by 18 percent to reach US$ 47.7 million as against US$ 58.2 million.

    Stocks that contributed significantly to the volumes include WTL, DSL, UNITY, MLCF and TRG, which formed 32 percent of total volumes.

    Stocks that contributed positively include OGDC (+36 points), HUBC (+22 points), NBP (+18 points), SNGP (+18 points) and ENGRO (+16 points). Stocks that contributed negatively include UBL (-12 points), COLG (-11 points), EPCL (-3 points), FCCL (-3 points), and PIBTL (-3 points).

  • 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.