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Author: Mrs. Anjum Shahnawaz

  • Textile exports decline by 15pc in June on budgetary measures

    Textile exports decline by 15pc in June on budgetary measures

    KARACHI: Pakistan’s textile exports fell by 15 percent in June 2019 to $1.01 billion as compared with $1.19 billion in the same month of the last year, according to export data released by Pakistan Bureau of Statistics (PBS) on Friday.

    The exports of June 2019 has also exhibited 14.55 percent decline when compared with $1.18 billion in May 2019.

    Analysts said that uncertainty in exchange rate and budgetary measures have negatively impacted the exports in the month of June 2019.

    They said that the currency fluctuated massively during past two months, which increased the cost of imported raw material. Further budgetary measures including elimination of sales tax zero-rating for five export sectors also caused in export decline.

    The overall exports of textile products fell by 1.42 percent to $13.33 billion during fiscal year 2018/2019 as compared with $13.52 billion in the preceding fiscal year.

    The experts said that despite several incentives given by the government to this particular sector the exports were remained stagnant. They said that the government in terms of incentives had granted rebate and credit on duty and taxes.

    The exports of knitwear and readymade garments have supported the overall textile exports. The export of knitwear grew by 7 percent to $2.89 billion during fiscal year 2018/2019 as compared with $2.711 billion in the preceding fiscal year.

    Similarly, the export of readymade garments exhibited growth of three percent to $2.65 billion in the fiscal year under review as compared with $2.577 billion in the fiscal year 2017/2018.

    The export of raw cotton and cotton year witnessed decline of 65 percent and 18 percent during the comparative fiscal years.

    However, export of bead wear was remained flat at $2.262 billion in fiscal year 2018/2019 as compared with $2.261 billion in the preceding fiscal year.

    The State Bank of Pakistan (SBP) in its third quarterly report on Pakistan Economy said that the stagnation in overall textile exports stemmed from a slowdown in export growth (in value terms) of readymade garments and knitwear items, and Year on Year (YoY) declines in cotton fabric and yarn exports.

    Except for yarn, export values of all these major products suffered from a drop in unit prices, as quantum exports grew appreciably. The drop in dollar-based unit prices was mainly owed to exchange rate adjustments, as exports rose significantly in Pak Rupee terms, the SBP said.

    In rupee term the textile exports registered 22 percent growth during 2018/2019 as compared with preceding fiscal year.

    Related Posts:

    Textile exporters oppose proposed plan for abolishing zero-rating, FTR

    Monitoring of Withholding Tax: FBR launches mega operation against textile, sugar companies for tax evasion

  • No compromise on documentation of economy: FBR chairman

    No compromise on documentation of economy: FBR chairman

    ISLAMABAD: Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) on Friday said that the government will not compromise documentation of economy by surrendering condition of CNIC on purchases.

    He said that the condition of CNIC had been enforced on purchases above Rs50,000.

    Speaking at a seminar organized by Sustainable Development Policy Initiative (SDPI) on Wednesday, he said that priority of the government was to enhance the tax net and expend tax base to documenting the country’s economy. And taxation is the only way to forward for equitable distribution of wealth, as we cannot have stabilized and equitable society unless we have a fare taxation system, he added.

    The FBR chairman said that due to presumptive tax regime, we actually dissociated the taxation from the economy, where taxing the real income was out of question.

    The incumbent government and the International Monitory Fund (IMF) are on the same page, as there was no disagreement by the government on the measures proposed by the IMF, especially the taxation measure, he said.

    The chairman said that the government would not bow down against the pressure, protests and lame excuses of the businesses and industries.

    Over the decades the policies of the successive governments make Pakistan a trading state rather a sami-manufacturing state, where the country is importing everything from mineral water to foods items and never worked-out on import substitution.

    While raising the concerns over the open transit trade agreement with Afghanistan, he said the agreement was being exploited and abused by the smugglers which negatively impacted the local industry.

    Pakistan needed to review this agreement and should take stringent measures to control illicit trade on Pak-Afghan border, he said.

    There are around 100 thousand companies registered with the government of Pakistan, where only 60 thousands file their returns, which shows the level of tax compliance.

    He said the measures taken in the current federal budget would fundamentally change the course of history of Pakistan.

    The government was taking steps to redress the institutional corruption through automation of the taxation system, the Chairman FBR said.

    He said that it is his responsibility to improve the tax base under the leadership of Prime Minister Imran Khan.

    Hawala and Hundi have inflicted a huge loss on the country’s economy,” he said and added measures were being taken to include the middle class in the tax net.

  • Stock market recovers 149 points on improved investors sentiments

    Stock market recovers 149 points on improved investors sentiments

    KARACHI: The stock market recovered 149 points on Friday amid buying on improved investors sentiments.

    The benchmark KSE-100 index closed at 32,459 points as against 32,310 points, showing an increase of 149 points.

    Analysts at Arif Habib Limited said that the index oscillated around 650 during the session with +240 points and -408 points.

    First session ended 240 points down and 49 million shares traded, whereas second session saw recovery in the index resulting in +240 points (unadjusted). News of State Enterprise / Market opportunity Fund by State Enterprises helped improve investor sentiment in the second session.

    Buying activity took place in index heavy weights such as OGDC, PPL, PSO, LUCK, where PSO ended at upper circuit.

    Cement Sector led the volumes chart with 27 million shares, contributed by MLCF (14.4million) and DGKC (4.5 million), and followed by Technology (14 million) and Power (12million). TRG ranked second in terms of traded volume with 12 million shares.

    Sectors contributing to the performance include E&P (+66 points), Fertilizer (+48 points), O&GMCs (+43 points), Cement (+26 points), Chemical (+9 points).

    Volumes increase by further from 87 million shares to 121 million shares (+39 percent DoD). Average traded value however, increased by 15.9 percent DoD to reach US 27.2 million as against US$ 23.5 million.

    Stocks that contributed significantly to the volumes include MLCF, TRG, KE, PAEL, and BOP, which formed 43 percent of total volumes.

    Stocks that contributed positively include ENGRO (+39 points), OGDC (+33 points), PPL (+31 points), LUCK (+24 points) and FFC (+23 points). Stocks that contributed negatively include UBL (-32 points), HUBC (-21 points), NESTLE (-17 points), DAWH (-10 points) and BAHL (-8 points).

  • Pakistan Customs seizes huge quantity of Indian white sugar

    Pakistan Customs seizes huge quantity of Indian white sugar

    ISLAMABAD: Pakistan Customs has seized huge quantity of Indian origin white sugar, which was to be used in Afghanistan.

    Pakistan Customs Directorate General of Afghan Transit has seized a huge number of Indian origin consignments mis-declared as ‘White Sugar’, destined to be consumed in Afghanistan, said a statement on Friday.

    After confirmation through laboratory tests, the sugar is found to be “unfit for human consumption. So far 4472 Metric Tons in172 Containers out of 258 Containers have been tested by Laboratories and reported as ‘unfit for human consumption’, the rest of the 2236 Metric Tons (86 containers) are under investigation, the statement said.

    The harmful intake of this ‘expired sugar’ emanating foul smell and having turned brownish in colour would have seriously endangered the health of Afghan nationals had it made its way to the markets in Afghanistan.

    In continuing to play its mandated role in ‘Protection of Society’, Customs at the operational level is further enhancing its enforcement efforts and information network, without compromising on trade facilitation.

  • Withholding Tax Card: Non-ATL to pay up to 30pc tax on profit from bank deposits, saving schemes

    Withholding Tax Card: Non-ATL to pay up to 30pc tax on profit from bank deposits, saving schemes

    ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which persons receiving profit from bank deposits or investment in national saving schemes shall pay up to 30 percent, if not on the Active Taxpayers List (ATL).

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  • RTO-II starts return filing facilitation drive next week

    RTO-II starts return filing facilitation drive next week

    KARACHI: Regional Tax Office (RTO) –II Karachi to launch drive from next week in order to facilitate people to file their annual income tax returns.

    FBR teams will set up camp offices at large corporate and government offices besides visiting markets and shopping plazas to encourage salary and business individuals to file their returns, said Badaruddin Ahmed Qureshi, Chief Commissioner, Inland Revenue, RTO-II, Karachi at a press conference on Friday.

    The chief commissioner said that the purpose of the facilitation drive was to achieve 5 million income tax return filers during next few years. “The FBR has already received over 2.1 million income tax returns for tax year 2018,” the chief commissioner said.

    He further added that the last date for filing income tax returns for tax year 2018 had been extended up to August 02, 2019.

    He said that in order to achieve five million-milestone the FBR launched several measures to encourage / force persons having taxable income to file their returns.

    The chief commissioner said that in first phase the RTO Karachi would ask large corporate entities and provincial departments to assure return filing by their employees having taxable income.

    The tax office identified that employees of large organizations such as Pakistan International Airlines (PIA), National Bank of Pakistan (NBP), Pakistan Railways (PR) had taxable income but were not filing their income tax returns.

    He said that the RTO-II Karachi would set up camp offices at various organizations for the enforcement of return filing. The camp offices would be set up at PIA, NBP, SSGC, Police, KMC, Water Board, Sindh Building Control Authority etc.

    The chief commissioner said that the office had received details of doctors. He said that Pakistan Medical and Dental Council (PMDC) had 68,000 registered doctors out of which only 6,500 were filing annual income tax returns.

    The chief commissioner said that it would be difficult to conceal transactions in future as FBR with the help of other regulators had established electronic system for information sharing.

    The chief commissioner said that the FBR was facing enforcement problems due to human resource capacity but in order to ensure compliance a NGO was being engaged for the task of return filing.

    He said that the tax office had get volunteers from the NGO would file returns of those who did not want to pay fee of lawyers.

    A training session for those volunteers had been held recently at the tax office.

  • UAE announces opening visa centers at Karachi, Islamabad

    UAE announces opening visa centers at Karachi, Islamabad

    KARACHI: United Arab Emirates (UAE) has announced to open visa centers in Karachi and Islamabad this year in order to facilitate Pakistanis, said UAE Ambassador Hamad Obaid Alzaabi.

    UAE Embassy will be opening a visa center in Karachi which will become operational in the first week of September 2019 while another visa center will also become functional in Islamabad in the first week of October 2019 which would provide all facilities here in Pakistan.

    “Everything will be here including the medical insurance, checkups and the contracts etc. to facilitate visa issuance from the visa center in Karachi which will be the biggest visa center of Asia while the entire team for this Visa Center at Khayaban-e-Shamsheer in Karachi will come from UAE”, he added while exchanging views at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI) on Friday.

    Deputy Consul General of UAE Bakheet Ateeq Alremeithi, Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, President KCCI Junaid Esmail Makda, Senior Vice President KCCI Khurram Shahzad, Vice President KCCI Asif Sheikh Javaid and KCCI Managing Committee members were also present at the meeting.

    While expressing gratitude to KCCI for extending warm hospitality on his visit to KCCI, UAE Ambassador said that he has visited many areas of Pakistan including Faisalabad, Sialkot, Lahore, Peshawar, South Waziristan and Quetta but Karachi was one of the most important cities of Pakistan where social life, atmosphere, culture and people were very different as compared to other areas including Islamabad.

    UAE Envoy stated that relations between Pakistan and UAE have always been very strong and historical but there was a need to further build these relations by exploring the opportunities and potential areas for enhancing trade and investment. “The governments of UAE and Pakistan are working very hard to narrow the gap and find opportunities, chances and potential for trade and investment”, he added.

    “We are trying to find new areas of cooperation where we could work together and also examining the challenging areas so that these could be addressed by the authorities in UAE. Inshallah we will put our hands together to move forward in future”, he added.

    He further informed that UAE was now offering Silver Investment Visa for 5 years and Golden Investment Visa for 10 years which were being issued under a specific criteria and depend on the size of a company and also the amount being invested.

    He stressed the need for having legal framework between UAE and Pakistan to encourage and save investments made either in Pakistan or in UAE.

    Agreeing to President KCCI’s suggestion of signing a Memorandum of Understanding between KCCI and UAE Chamber, he said it was really important so that a framework could be defined because when there was a gap and no official visits, the business communities and Chambers of Commerce simply will have no idea about the business potential in Pakistan and UAE. “Any suggestion from Karachi Chamber which pertains to signing MoUs, agreements, workshops, conferences and seminars will certainly be taken into consideration”, he assured, “We are ready to support you and whatever you need, we are always there at the UAE Embassy and Consulate in Karachi to assist you.”

    Chairman BMG & Former President KCCI Siraj Kassam Teli, in his remarks, appreciated the support and cooperation being extended by UAE’s Embassy and its Consulate in Karachi as they have been fully facilitating KCCI’s visa requests from time to time and they haven’t faced any problems at all in this regard. However, he requested the Deputy Consul General to devise some kind of system in collaboration with KCCI so that visas could be issued to credible businessmen and industrialists with a personal guarantee by KCCI. He informed that Karachi Chamber thoroughly reviews and verifies all the documents being submitted by its members intending to obtain KCCI’s visa recommendation letter so that only genuine businessmen could avail this facility.

    He also requested the Ambassador to only entertain visa recommendation letters and requests from those Chambers of Commerce and trade associations which were legally registered at the Ministry of Commerce. In Pakistan particularly in Karachi, there were a lot of paper-based and bogus forums and Councils etc. which were not legally registered, he noted, adding that in this regard, UAE Embassy can easily obtain a list of all legal Chambers of Commerce and trade bodies along with their jurisdiction details from the Ministry of Commerce that would help in better understanding the legalities and jurisdictions of 42 Chambers of Commerce and around 120 sector-specific trade associations in Pakistan, he added.

    While welcoming the UAE Ambassador, President KCCI Junaid Esmail Makda expressed the intention to sign a Memorandum of Understanding with UAE Chamber in order to improve the trade and investment ties and bring business communities more close to each other. “We should work collectively to enhance bilateral trade and deal with all the irritants and barriers, particularly the non-tariff barriers between the two countries.”

    He said that although tourist visa was being offered without any problem but the UAE government must also look into the possibility of issuing business visas to Pakistan’s business community.

    Junaid Makda informed that around 1.6 million Pakistanis were residing in different cities of UAE. The country received remittance of $4.62 billion from UAE during Fiscal Year 2019, making it one of the most attractive destination for Pakistani workers.

    He said, “Pakistan was going through a very hard time in terms of economic conditions but UAE’s support has been remarkable and we are very grateful for helping Pakistan with $3 billion balance-of-payments support.

  • Rupee ends down by 16 paisas in interbank

    Rupee ends down by 16 paisas in interbank

    KARACHI: The Pak Rupee ended down by 16 paisas against dollar in interbank foreign exchange market on Friday owing to higher payments for import and corporate payments.

    The rupee ended Rs160.19 to the dollar from previous day’s closing of Rs160.03 in interbank foreign exchange market.

    The foreign currency market was initiated in the range of Rs160.00 and Rs160.10. The market recorded day high of Rs160.20 and low of Rs160.10 and closed at Rs160.03.

    Currency experts said that the local currency was under pressure due to weekly holdays next two days.

    The exchange rate in open market also witnessed decline in value of the local unit. The buying and selling of dollar was recorded at Rs160.00/Rs160.50 from previous day’s closing of Rs159.80/Rs160.50 in cash ready market.

  • FBR redeploys 1,650 customs officials to curb smuggling

    FBR redeploys 1,650 customs officials to curb smuggling

    ISLAMABAD: The Customs Wing has re-deployed and transferred 1,650 official positions to meet the challenging revenue target and particularly to control smuggling.

    A statement said that in this context, a total of 180 posts in BS-16 have been re-designated while 1,568 posts in BS-16 have been redeployed across Pakistan. This shake up has not been kept limited to low grade positions but also 84 posts in BS-17 to BS-21 have also been re-deployed.

    The bulk of the re-deployed customs officers have been shifted to strengthen the Customs enforcement side.

    The transfer and posting orders have been issued. As a consequence of this re-deployment the Torkham corridor will become operational round the clock. The orders will enable the government to meet the demand from trade and industry to curb smuggling.

    Customs automation efforts have lately been enabling it to handle more trade efficiently and reduce its reliance on human interface. Under Prime Minister’s instructions the Chairman Syed Shabbar Zaidi has instructed Customs to improve ease of doing business by expediting initiatives like implementation of WeBOC-Glo, ITTMS and trade related Pakistan Single Window.

  • Withholding Tax Card: Tax rates on salary income

    Withholding Tax Card: Tax rates on salary income

    KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which every employer paying salary to employees above threshold income shall deduct withholding tax.

    According to official documents made available to PkRevenue.com, the FBR said that every person responsible for paying salary to an employee shall deduct tax from the amount paid under Section 149 of Income Tax Ordinance, 2001.

    As per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax deducted under section 149. Under the Tenth Schedule the withholding tax so collected shall be increased by 100 percent in case of persons not appearing on the Active Taxpayers List (ATL).

    As per Finance Act, 2019, the salary slabs as well as tax rates have been revised with effect from 01.07.2019. As such all withholding tax agents disbursing salary are required to implement the revised tax rates from the same date.

    Following are the salary slabs and rates on annual salary income:

    1. Where taxable income does not exceed Rs. 600,000: the tax rate shall be 0 percent

    2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be 5% of the amount exceeding Rs. 600,000

    3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the tax rate shall be Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000.

    4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the tax rate shall be Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000

    5. Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000: the tax rate shall be Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000

    6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the tax rate shall be Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000

    7. Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000: the tax rate shall be Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000

    8. Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000: the tax rate shall be Rs.1,345,000 plus 25% of the amount exceeding Rs. 8,000,000

    9. Where taxable income exceeds  Rs. 12,000,000 but does not exceed Rs.30,000,000: the tax rate shall be Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000

    10. Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000: the tax rate shall be Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000

    11. Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000: the tax rate shall be Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000

    12. Where taxable income exceeds Rs.75,000,000: the tax rate shall be Rs. 21,420,000 plus 35% of the amount exceeding Rs 75,000,000″;

    The FBR said that every person responsible for making payment for directorship fee or fee for attending board meeting or such fee by whatever name called under Section 149(3) of Income Tax Ordinance, 2001 shall collect 20 percent of gross amount paid.