The Federal Board of Revenue (FBR) has recently released the updated income tax rates applicable to companies for the tax year 2022.
(more…)Author: Faisal Shahnawaz
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FBR launches customs duty calculator
In a bid to simplify the customs clearance process and provide greater transparency to traders, the Federal Board of Revenue (FBR) has introduced a user-friendly Customs Duty Calculator. This online tool is designed to assist traders in assessing and calculating customs duties for their consignments, streamlining the overall clearance procedure.
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FBR notifies paper tax return form for individuals, AOPs
The Federal Board of Revenue (FBR) issued paper income tax return forms for tax year 2021 on Friday, just a month ahead of the looming filing deadline of September 30, 2021.
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KIBOR rates on August 27, 2021
KARACHI: State Bank of Pakistan (SBP) on Friday issued following Karachi Interbank Offered Rates (KIBOR) on August 27, 2021.
Tenor BID OFFER 1 – Week 6.89 7.39 2 – Week 6.94 7.44 1 – Month 7.00 7.50 3 – Month 7.13 7.38 6 – Month 7.29 7.54 9 – Month 7.42 7.92 1 – Year 7.50 8.00 -
PM launches house financing scheme for NRPs
KARACHI: State Bank of Pakistan (SBP) on Friday said that Prime Minister Imran has launched a new housing scheme to facilitate Non-Resident Pakistanis (NRPs) in buying houses for themselves and their families.
The central bank in a statement said that the prime minister praised the efforts and hard work of the SBP and government agencies in crossing another impressive milestone of $2 billion in deposits in Roshan Digital Accounts (RDA) and developing an exclusive product, Roshan Apna Ghar, for Overseas Pakistanis’ investment in housing in Pakistan.
He said that RDA has provided an excellent platform to overseas Pakistanis to digitally connect to Pakistan’s banking system and meet their financial services needs in Pakistan.
The prime minister was addressing a gathering of Ministers, Presidents and CEOs of Banks, SBP officials and other distinguished guests at the launch of Roshan Apna Ghar – an initiative of SBP for overseas Pakistanis.
The Prime Minister expressed optimism that Roshan Apna Ghar would facilitate overseas Pakistanis to buy a house for themselves and / or their families in Pakistan, which has been quite difficult for many of them due to host of manual procedures, mandatory physical visits to Pakistan with long stay to complete the process and the hassle of trips to many offices.
He said that with the introduction of Roshan Apna Ghar, an end to end digital process right from submission of application to the bank to disbursement of funds by banks, overseas Pakistanis would find it much easier to buy a housing unit in Pakistan for themselves or their loved ones either through their own savings or bank financing.
In his welcome address, Governor SBP, Dr. Reza Baqir thanked the Prime Minister for his vision and firm resolve to integrate the overseas Pakistani community with the country’s economy.
Highlighting the performance of Roshan Digital Account, he said that RDA is now a very well established brand, which has so far connected over 215,000 expats with the country’s banking system and attracted over $2,050 million since its launch in September last year. He said it took about 8 months to cross the first major milestone of $1 billion whereas the next 1 billion were received in less than 4 months, which is indicative of the increasing momentum.
Introducing the new product, Dr. Baqir said that Roshan Apna Ghar is an initiative of SBP for Non Resident Pakistanis (NRPs)to buy, build or renovate their homes in Pakistan through own investment or bank financing.
Complete information on the initiative as well as directions on how to avail it are available at the SBP portal. Overseas Pakistanis will be able to complete their transaction completely remotely and digitally and their investment will be fully repatriable.
He elaborated that financing is available in both conventional and Shariah compliant variants at attractive rates for a period of three to 25 years.
Through the Roshan Apna Ghar initiative, overseas Pakistanis will also be able to obtain financing under the Mera Pakistan Mera Ghar scheme of the government as well that has been exclusively designed for those who do not already own a house and offers financing at economical rates starting from 3 percent.
Governor Baqir emphasized that SBP, with the support of all stakeholders, will continue to bring as much ease as possible for overseas Pakistanis.
Speaking at the occasion, the Minister for Finance and Revenue, Shaukat Tarin, said that the innovation of Roshan Digital Account has proved to be a huge success and instrumental in receiving substantial investment of over $1.4 billion in Naya Pakistan Certificates.
He lauded the introduction of Roshan Apna Ghar by State Bank and said that it is another splendid idea of SBP and will attract substantial investment in the real estate sectorby overseas Pakistanis.
He went on to add that both NPCs and the Roshan Apna Ghar are here to achieve the greater goal of attracting investments by overseas Pakistanis, which are more sustainable and reliable.
He said that Ministry of Finance with the help of State Bank will make every effort to introduce new avenues of investments for overseas Pakistanis.
Under Roshan Apna Ghar, two types of financing facilities are being offered. First, Standard Financing in which both lien based and non-lien based financing is available.
In lien-based financing, the NRPs can obtain house finance facility against lien on their RDA deposit balances or Naya Pakistan Certificates. Banks can finance up to 100 per cent of the property value for purchase or construction of a house; for renovation of house, financing is capped at 40 per cent of the property value.
Non-lien based financing is the typical housing finance offered against mortgage of the property to be purchased; banks may fund up to 85% of the property value for purchase or construction of house, and up to 30% of the property value for renovation of house.
Second, the house financing facility under Mera Paksitan Mera Ghar (Government Mark-up Subsidy Scheme) is also available for RDA holders under Roshan Apna Ghar product as per already defined criteria under respective tiers.
In this case, the financing rates applicable to the Mera Pakistan Mera Ghar scheme would apply.Insurance of the property, up to the extent of financing amount, is also free.
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Textile exporters urge allowing cotton import from India
KARACHI: Textile exporters have urged the government to allow import of cotton and cotton yarn from India and other countries through land routes.
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PIA shows 46% revenue decline in half year
KARACHI: Pakistan International Airlines Corporation Limited on Friday announced 46 per cent decline in net revenue for the half year ended June 30, 2021.
The airline recorded net revenue of Rs27.64 billion for the half year (January – June) 2021 as compared with Rs51.47 billion in the same half of the last year.
However, the losses of the company reduced sharply during the period. The net losses of the airline came down to Rs25 billion for the half year ended June 30, 2021 as compared with Rs36.536 billion in the corresponding half of the last year.
The airline said the cost of services reduced to Rs36.84 billion for the half year under review as compared with Rs55.7 billion in the same half of the last year.
Out of cost of services, the cost on aircraft fuel fell to Rs7.63 billion as compared with Rs14.65 billion.
Meanwhile, other costs of services, including salaries, wages and allowances also came down to Rs29.21 billion in the first half of 2021 as compared with Rs41 billion in the same half of the last year.
Administrative expenses fell to Rs2.59 billion when compared with Rs3.09 billion.
The airline made an exchange gain of Rs1.32 billion as compared with loss of Rs9.76 billion in the same half of the last year.
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Philip Morris declares 37% growth in half year net profit
KARACHI: Philip Morris (Pakistan) Limited on Friday declared over 37 per cent growth in net profit for the half year ended June 30, 2021.
Philip Morris (Pakistan) Limited is one of the largest manufacturers of cigarettes in the country.
The company posted a profit after tax at Rs1.72 billion for the six months period ended June 30, 2021 as compared with Rs1.25 billion in the same period of the last year.
According to the half yearly report issued by the company, Pakistan’s economy has started gaining momentum and we appreciate the Government’s efforts in this regard especially towards ease of doing business, growth in large scale manufacturing, strengthening of governance, widening tax net etc.
However, the spread of new variants (locally and globally) amidst the ongoing fourth wave of the pandemic might pose a risk to this growth trajectory. While dealing with the pandemic our priority remained the safety of our employees and stakeholders.
In line with the Government directives, the company encouraged the employees for vaccination and the Company’s offices across the Country are operational with relevant SOPs in place with the close monitoring of the pandemic situation.
No change in excise rates on cigarettes during federal budget 2020/2021 proved to be positive for Government Revenue and the Company’s contribution to the National Exchequer during fiscal year (July’20-Jun’21) in the form of excise duty, sales tax and other government levies, which stood at PKR 24,052 million (higher by 18.7 per cent compared to the previous fiscal year July’19-Jun’20). No change in excise rates during the fiscal year 2020/21 also led to consumer price stability of the legitimate cigarette brands.
However, the issue of non-tax paid illicit cigarettes continues to have a detrimental effect with a market share of approximately 40% (which in 2013 was 23%) resulting in an annual loss of PKR 70-77 billion (estimated) to the national exchequer. The past decade has witnessed a growth of local cigarette manufacturers across Pakistan (including AJK) manufacturing over 100+ brands, selling at a lower price than the minimum price prescribed under tax laws for the purposes of levy and collection of federal excise duty i.e. PKR 63 per pack.
Such products can be found in the market being sold between PKR 25 to PKR 38 per pack. In addition to violating the tax laws, these manufacturers continue to advertise and incentivize cigarette smokers to purchase their brands by offering cash prizes, gifts and travel opportunities, which is a violation under tobacco advertisement control guidelines issued by the Federal Ministry of National Health Services Regulations and Coordination.
During the six months ended June 30, 2021, despite all the challenges above, the Company’s net turnover stood at PKR 9,224 million reflecting an increase of 4.7% versus the same period last year. During the six months, the Company’s contribution to the National Exchequer, in the form of excise duty, sales tax and other government levies, stood at PKR 14,435 million (higher by 15.5% compared to the same period last year) reflecting 60% of half-yearly Gross Turnover.
The Company recorded Profit After Tax of PKR 1,720 million for the six months ended Jun 30, 2021 (compared to Profit After Tax of PKR 1,253 million for the same period last year) equivalent to 7.2% of half-yearly Gross Turnover.
Distribution & Marketing expenses showed an increase over the prior year reflecting our continued commitment to allocating resources for initiatives behind building brands and route to market activities whilst remaining compliant with applicable laws that can earn the best returns coupled with lower expenses in Q2’20 driven by COVID 19 lockdown measures.
Further, the company continues to find efficiencies in Administrative Expenses to ensure the increase remains under inflation.
During the period, we continued our efforts to engage with the Government highlighting concerns towards the illicit sector and lack of a level playing field. The announcement of the Federal Budget 2021/22 in Jun’21 saw unaltered excise rates on cigarettes which can continue to support Government Revenues during the ongoing fiscal year and the stability of the consumer prices of legitimate cigarettes brands.
Further, in the Finance bill 2021/22 a requirement to obtain brand registration certificates for specified sectors was also tabled and is now being formalized with the issuance of Sales Tax General Order (STGO) dated August 3, 2021 which requires manufacturers of specified goods including tobacco to obtain brand registration certificates.
Furthermore, the Company is pleased to observe that the Government has made strides in creating checks and balances for goods coming in from the Azad Jammu & Kashmir (AJ&K) trade route to ensure proper taxation of goods arriving in Pakistan. We also continue to support the introduction of the Track and Trace system and strongly urge the Government for its sooner implementation as it will be an effective tool to supplement enforcement efforts against tax evasion.
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Pakistan’s budget deficit shrinks to 7.1% in FY21
KARACHI – Pakistan’s fiscal performance for the fiscal year 2020/2021 has shown encouraging signs as the budget deficit has reduced to 7.1 percent of the GDP compared to 8.1 percent in the preceding fiscal year.
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Rupee gains 19 paisas against dollar on inflows
KARACHI: The Pak Rupee (PKR) gained 19 paisas against the dollar on Friday owing to inflows of export receipts and workers’ remittances.
The PKR ended at Rs165.62 to the dollar as compared with the previous day’s closing of Rs165.82 in the interbank foreign exchange market.
Currency experts said that the market witnessed sufficient supply of dollars from export receipts and workers’ remittances. The dollar inflows helped the rupee to make gains.
They however said that demand for import payment remained high due to last trading of the day.