The Pakistani Rupee experienced a marginal decline against the US Dollar, closing at Rs155.36 in the interbank foreign exchange market, a slight drop from the previous day’s close of Rs155.35.
(more…)Author: Mrs. Anjum Shahnawaz
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Income tax shall not exceed 10 percent of profit from saving schemes
KARACHI: Tax laws have granted reduced rate of income tax on profit on investment in saving schemes.
According to updated Income Tax Ordinance, 2001 up to June 30, 2019 issued by Federal Board of Revenue (FBR) defined reduction in tax liability for various segments of taxpayers.
The ordinance said that the tax payable under clause (c) of sub-section (1) of section 39, in respect of any amount paid as yield or profit on investment in Bahbood Savings Certificate or Pensioners Benefit Account and Shuhada Family Welfare Account shall not exceed 10 percent of such profit.
As per Second Schedule of the Ordinance, the income, or classes of income, or person or classes of person, enumerated below, shall be allowed reduction in tax liability to the extent and subject to such conditions as are specified hereunder:-
(1) (1) Any amount received as-
(a) flying allowance by flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces; and
(b) submarine allowance by the officers of the Pakistan Navy, shall be taxed at 2.5 percent as a separate block of income:
Provided that the reduction under this clause shall be available to so much of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary.
(1AA) Total allowances received by pilots of any Pakistani airlines shall be taxed at a rate of 7.5%, provided that the reduction under this clause shall be available to so much of the allowances as exceeds an amount equal to the basic pay.
The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25 percent of tax payable on his income from salary:
Provided that this clause shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients.
The amount of tax payable, in a year in which the rupee is revalued or devalued, by a taxpayer whose profits or gains are computed in accordance with the rules contained in the Fifth Schedule to this Ordinance and who had entered with the Government into an agreement which provides for such reduction, shall be reduced to the amount that would be payable in the absence of the revaluation or devaluation of the rupee.
In respect of old and used automotive vehicles, tax under section 148 shall not exceed the amount specified in Notification No. S.R.O. 577(I)/2005, dated the 6th June, 2005.
The amount of tax payable by foreign film-makers from making films in Pakistan shall be reduced by fifty percent on income from film-making in Pakistan.
The amount of tax payable by resident companies deriving income from film-making shall be reduced by seventy percent on income from film-making.
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SBP likely to keep policy rate unchanged: analysts
KARACHI: State Bank of Pakistan (SBP) likely to keep policy rate unchanged in upcoming monetary policy, analysts said on Tuesday.
The analysts at Arif Habib Limited said that the monetary policy committee of SBP will convene on Friday (22nd November 2019) to announce the monetary policy for the next two months.
We expect the SBP to keep policy rates unchanged in the upcoming monetary policy statement. Despite significant reduction in yields of 10-yr PIB, T-Bills, and revision on National Savings Scheme (NSS) rates, we see a status quo stance due to the following reasons:
i) Inflation is likely to remain elevated in upcoming months and expected to peak out in January 2020 at 12.50 percent which would reduce real interest rates to 75bps (compared to last 10 months average of ~290bps),
ii) Government is expected to continue attracting foreign investment in T-Bills to increase foreign exchange reserves, and
iii) Monetary easing might have negative repercussions on the current account and exchange rates.
To recall, SBP kept policy rate unchanged in last monetary policy statement (held on 16th September 2019) on account of
i) Inflation forecast which was broadly similar between new and old base (11-12 percent for FY20),
ii) Higher core inflation, and iii) Regular adjustment in utility prices and increase in food prices could pose upside risk to inflation forecast.
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SBP facilitates exports against advance payment
KARACHI: State Bank of Pakistan (SBP) has amended framework related to trade based money laundering in order to facilitate receiving export payment.
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Tax return filing reaches to new record high of 2.68 million
ISLAMABAD: The number of income tax return filings has surged to a record level of 2.68 million for the tax year 2018, according to the latest statistics compiled up to November 17, 2019.
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Customs directed to verify seized vehicles carrying smuggled goods
ISLAMABAD: Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has directed customs authorities to launch verification of seized vehicles carrying smuggled goods.
A statement issued on Monday, the FBR chairman directed the customs field offices to identify smuggled items and take strict action against offenders.
On the instructions of Syed Shabbar Zaidi, Chairman FBR, Customs Wing has issued instructions to all its field formations to verify the genuineness of all seized conveyances being used to transport smuggled goods through verification from Forensic Science Laboratory, Registration Database of Excise & Taxation Department and Customs Clearance documents.
The field formations have been further instructed to initiate separate legal proceedings in case such conveyances are found to be smuggled or with tampered chassis number.
These instructions will greatly help in dismantling the smuggling network being used to transport smuggled goods.
In line with the recommendations of the Prime Minister’s Steering Committee on Anti-smuggling, Pakistan Customs being the country’s lead Anti-Smuggling Organization has accordingly stepped up enforcement actions in coordination with other Law Enforcement Agencies.
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Current account deficit sharply narrows by 73.5pc in July – October
KARACHI: Pakistan’s current account deficit sharply narrowed by 73.5 percent during first four months (July – October) of current fiscal year due to massive decline in import bill.
The current account deficit reduced to $1.474 billion during July – October of current fiscal year as compared with the deficit of $5.567 billion in the same period of the last fiscal year.
The deficit in trade of goods fell to $6.43 billion during first four months of current fiscal year as compared with deficit of $11.06 billion in the same period of the last fiscal year.
Workers’ remittances slightly fell to $7.48 billion during July – October 2019 as compared with $7.61 billion in the corresponding period of the last fiscal year.
The current account deficit as per the GDP is 1.6 percent during first four months of current fiscal year as compared with 5.5 percent in the same period of the last fiscal year.
The current account deficit for the period fiscal year 2018/2019 was 4.9 percent of the GDP and the deficit was 6.3 percent of the GDP in fiscal year 2017/2018.
After more than 4 years, Pakistan posted a Current Account Surplus of $99 million in October 2019 compared to a $1.2 billion deficit last year.
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Foreign investment increases to $1.1 billion owing to debt securities attraction
KARACHI: Pakistan’s total inflow of foreign investment has increased to $1.1 billion during first four months (July – October) 2019/2020 as compared with outflow of $77.5 million in the corresponding months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.
The inflows can be attributed to attractive avenue in the debt securities for foreign participants.
The total portfolio investment has been recorded at $436.7 million during first four months of the current fiscal year as compared to a negligible amount in the same period of the last fiscal year.
The total inflow of foreign private investment was at $665.7 million during first four months of the current fiscal year as compared with $77.6 million outflow in the corresponding months of the last fiscal year.
The foreign direct investment also grew by 238.7 percent to $650 million during period under review as compared with $192 million in the same period of the last fiscal year.
The inflow of portfolio investment in capital market was recorded at $15.6 million as compared with outflow of $269.5 million.
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Stock market gains 828 points as majority scrips traded in green
The stock market witnessed a robust rally on Monday as the benchmark KSE-100 index of Pakistan Stock Exchange (PSX) surged by 828 points, closing at 38,412 points, up from the previous close of 37,584 points.
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Rupee gains four paisas against dollar on inflows
KARACHI: The Pak Rupee gained four paisas against dollar on Monday owing to sufficient inflows.
The rupee ended Rs155.35 to the dollar from last Friday’s closing of Rs155.39 in interbank foreign exchange market.
Currency experts said that the inflows of export receipts and remittances helped the rupee to gain values.
The foreign currency market was initiated in the range of Rs155.38 and Rs155.42. The market recorded day high of Rs155.40 and low of Rs155.35 and closed at Rs155.35.
The exchange rate in open market the rupee witnessed slight gain. The buying and selling of dollar was recorded at Rs155.20/Rs155.40 from previous level of last Friday’s of Rs155.20/Rs155.50.