Pkrevenue.com

Author: Faisal Shahnawaz

  • PTBA urges FBR to extend date for filing income tax returns

    PTBA urges FBR to extend date for filing income tax returns

    KARACHI: Pakistan Tax Bar Association (PTBA) on Saturday urged Federal Board of Revenue (FBR) to extend the last date for filing income tax returns for Tax Year 2018 up to June 30, 2019 considering the recently launched tax amnesty scheme.

    In a letter to FBR Chairman Syed Muhammad Shabbar Zaidi, the PTBA informed that the Asset Declaration Ordinance, 2019 was announced on May 16, 2019 and the last date for filing declaration is June 30, 2019.

    The PTBA urged the FBR chairman to extend the last date for filing of return of income and statement of final taxation for individuals, Association of Persons (AOPs) and companies (other than public limited companies quoted on stock exchange) to June 30, 2019.

    The last date was already extended by the FBR till April 30, 2019 through Circular No. 03/2019 dated March 31, 2019.

    The apex tax bar said that the extension would encourage the new taxpayers to bring their house in order and come into the mainstream of economic activities by availing the benefit to become active taxpayers.

  • Chemical merchants advocate FTR continuation for commercial importers

    Chemical merchants advocate FTR continuation for commercial importers

    KARACHI: Chemical merchants have strongly advocated continuation of Final Tax Regime (FTR) for commercial importers in the upcoming budget.

    In a statement issued on Saturday Shahid Vaseem, Chairman, Pakistan Chemicals & Dyes Merchants’ Association (PCDMA), said that because commercial importers pay 6 percent advance non-adjustable tax at import stage, whereas industrial importers of same raw material pay only 5.5 percent adjustable/refundable advance tax or avail tax exemption certificate facility, therefore it was not justified to withdraw Final Tax Regime (FTR) from Commercial importers without giving them options of claiming tax refund and facility for issuance of Tax exemption certificate if excess tax is already paid at import stage.

    In meeting with PCDMA memebers and leading importers of industrial Raw Materials, Chairman PCDMA, said that assessed value for calculation of customs levies of an industrial raw material whether it is imported by industrial importer or commercial importer; remains same either on the basis of valuation ruling (if available), international scan (if available) or custom data; therefore, chances of under-invoicing eliminated on import of industrial raw materials.

    Shahid Vaseem said in his opinion by imposing similar rate of sales tax on industrial raw materials will also eliminate the issue of imports by non-genuine industrial importers and excess imports by the genuine industrial importers, who just import big volumes of industrial raw materials to sale in market at huge profit due to less rate of tax and in some cases got extra ordinary benefits of various SROs. Which resulted in loss of billions of rupees to government revenue.

    Shahid Vaseem demanded the Government to provide a level-playing field for commercial importers who are importing industrial raw material and supply these essential raw materials to industries in SME segment. At import stage commercial importers are paying 17+3= 20 percent sales Tax as compared to 17 percent only, if same items are imported directly by industrial importers, this renders our customer industries in SME segment un-competitive in local as well as export markets, thereby eliminating job opportunities and hurting exports of value-added goods.

    He explained that 3 percent Additional Sales Tax on import of Industrial Raw Materials if imported by Commercial Importers is irrational and unjustified, because 3 percent ADDITIONAL Sales Tax can only be applied if the Value Addition on raw material is assumed 17.65 percent, which is not possible because there is no process of value addition involved and no inputs such as Land, Buildings, Machinery, Labor, Electricity and Gas etc. are used by commercial importers of same industrial raw materials.

    On the contrary the value addition by manufacturers is assumed as 10 percent only and the GST is charged at the rate of 1.7 percent despite all the above inputs.

    He claimed that by implementing same rate of taxes and extending benefits of various SROs to commercial importers, similar to the industrial importers of Raw materials for one year will result in significant drop in import volume by the industrial importers, which will prove the misuse of reduce tax facility by the industrial importers and will provide opportunity to the government to identify non-genuine industrial importers who are only existing for importing raw materials for commercial sales.

  • Weekly Review: Investors likely cautious ahead of budget

    Weekly Review: Investors likely cautious ahead of budget

    KARACHI: The present government is presenting its first budget just after the Eid holidays and investors likely to take a cautious stance, analysts said.

    Analysts at Arif Habib Limited said that anticipation of Market Support Funds attracted positive sentiments alongside high volumes.

    The four day week commenced on a negative note amid lack of clarity over the funds, but, later during the week bulls took over after two support funds were approved by ECC worth Rs20 billion. Moreover, Pak Rupee gained some strength against the greenback, which further kept the sentiment positive. The market closed at 35,974 points, gaining 270 points.

    Positive sector-wise contributions came from i) Commercial Banks (174 pts), ii) Oil & Gas Marketing Companies (120 pts), iii) Automobile Assembler (53 pts), iv) Oil & Gas Exploration Companies (41 pts) and v) Tobacco (34 pts). Whereas, sectors that contributed negatively include i) Fertilizers (93 pts) and ii) Textile Composite (61 pts). Scrip-wise positive contributions came from UBL (67 pts), BAHL (60 pts), LUCK (58 pts) and PSO (44 pts). Whereas, negative scrip-wise contributions came from FFC (66 pts), HBL (65 pts), and NML (44 pts).

    Foreign selling was witnessed this week clocking-in at USD 2.95mn compared to a net buy of USD 0.02mn last week. Selling was witnessed in Exploration & Production (USD 5.9mn) and Fertilizer (USD 0.7mn). On the domestic front, major buying was reported by Banks / DFIs (USD 5.2mn) and Broker Proprietary Trading (USD 3.4mn). Average Volumes settled at 165mn shares (down by 8% WoW) while value traded clocked in at USD 48mn (up by 22% WoW).

  • Rupee gains another 50 paisas in interbank

    Rupee gains another 50 paisas in interbank

    KARACHI: The Pak Rupee gained another 50 paisas against US dollar on Friday owing to inflows related to Eid improved the supply.

    The rupee ended 147.90 to the dollar from previous day’s closing of Rs148.40 in interbank foreign exchange market.

    The interbank foreign exchange market was initiated in the range of Rs147.50 and Rs147.75.

    The market recorded day high of Rs148.25 and low of Rs147.25 and closed at Rs147.90.

    The exchange rate in open market also witnessed 50 paisas increase in rupee value.

    The buying and selling of dollar was recorded at Rs147.50/Rs148.50 from the previous day’s closing of Rs148.00/149.00 in the cash ready market.

  • Ministry opposes suggestions to allow commercial import of used cars

    Ministry opposes suggestions to allow commercial import of used cars

    ISLAMABAD: The ministry of industries and production has opposed the suggestions to allow commercial import of used and old motor cars into Pakistan.

    In an office memorandum, the ministry said that a meeting was held earlier this month with the car dealers federation to analyse suggestions to devise import and re-export of used vehicles policy 2019/2029 wherein it was unanimously observed that the dealers were interested in commercial import of used/old cars.

    The ministry said that as for the investment plan of $3.2 billion, the same seems irrational as importers do not plan to build any manufacturing facilities in near future. The Engineering Development Board (EDB) has therefore opined that proposed plan will negatively affect existing OEMs, new entrants and auto part manufacturers.

    The ministry further said that it is important to consider that Auto Development Policy (ADP) 2016-2021 has attracted investment of more than $1.3 billion so far from foreign investors who are at various stages of setting up their projects.

    Under ADP 2016/2021, fifteen new investors have been granted Greenfield status and under Brownfield category two closed down units have been revived, the existing OEMs are enhancing their capacities, their production and other new entrants are expected to start their production/complete their manufacturing facilities shortly. As per business plans, few new entrants have planned to export as well.

    “In view of above, allowing commercial import for domestic market would be against the spirit of Automotive Development Policy 2016/2021, which was prepared in consultation with Board of Investment, FBR and Ministry of Commerce etc.”

    It is also pertinent to point out that import of used cars would be at odds with the relevent import policy provision, hence it is requested to reject the proposal.

  • Hafeez Shaikh discusses budget proposals with chambers of commerce and industries

    Hafeez Shaikh discusses budget proposals with chambers of commerce and industries

    ISLAMABAD: Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance and Revenue on Thursday met presidents of various chamber of commerce and industries to discuss proposals for budget 2019/2020.

    The Presidents and representatives of Lahore, Faisalabad, Sialkot, Karachi and Federation of Chambers of Commerce and Industry were at the meeting.

    The representatives of various chambers briefed the adviser about problems and challenges being confronted by the economy of the country.

    They gave various suggestions aimed at improving the economy and industrial sector of Pakistan.

    The delegation proposed ways and means to enhance the export of the country.

    The delegation also gave proposals for the budget 2019/2020.

    In order to facilitate the business community and attract foreign investment, the adviser informed that the government was focusing on improving the ease of doing business.

    He stated that the role of private sector was highly important in improving the economy of the country and urged the members of business community to play their role to increase the volume of exports.

    He assured that the proposals of the chambers would be considered and a business-friendly budget would be presented.

    Apart from the representatives of the chambers, the meeting was attended by Adviser to PM on Commerce, Textile, Industry and Production and Investment, Abdul Razak Dawood, Minister of State for Revenue, Muhammad Hammad Azhar, Secretary Finance, Naveed Kamran Baloch, Chairman, FBR, Shabbar Zaidi and Adviser, Ministry of Finance, Dr. Khaqan Najeeb.

  • ECC approves Rs20 billion fund to support stock market

    ECC approves Rs20 billion fund to support stock market

    ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Thursday approved State Enterprise Fund worth Rs20 billion to support the stock market of the country.

    Adviser to Prime Minister on Finance, Revenue and Economic Affairs, Dr. Abdul Hafeez Shaikh, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet.

    In order to stabilize the stock market of the country, the ECC approved the proposal of Finance Division authorizing Government of Pakistan to issue sovereign guarantee amounting to Rs20 billion for investment in National Investment Trust (NIT)-State Enterprise Fund.

    Secretary, Ministry of National Food Security and Research updated the Committee about the wheat situation in the country.

    He informed that the country was in comfortable position with having 7.257 million tons of wheat available in the stock.

    Ministry of Maritime Affairs suggested various proposals on the revival and development of shipping industry in Pakistan.

    The Committee noted the proposals and advised Ministries of Petroleum and Maritime Affairs to jointly come up with a comprehensive proposal, in next ECC meeting, for introducing a dynamic shipping policy focusing on expansion and development of local shipping industry.

    The ECC acceded to the proposal of Ministry of States & Frontier Regions to grant Rs.781,591,000/- for arranging 20,000 Metric Tons of wheat for Temporarily Displaced Persons of erstwhile FATA.

    The ECC also approved Supplementary and Technical Supplementary Grants for various Ministries/Divisions.

  • Banks assure providing details of Benami account holders to FBR

    Banks assure providing details of Benami account holders to FBR

    ISLAMABAD: The commercial banks have assured the Federal Board of Revenue (FBR) of providing details of Benami account holders for the purpose of broadening of tax base and documentation of economy.

    An important meeting was held on Thursday of all chief financial officers with Syed Muhammad Shabbar Zaidi, chairman, FBR.

    The CFOs of all commercial banks assured complete cooperation to the FBR chairman in providing details of account holders in order to broaden the tax base.

    The participants of commercial banks included Chief Financial Officers of Allied Bank, United Bank, Habib Bank and others.

    They assured their full cooperation to the Chairman FBR and welcomed his appointment as Chairman FBR.

    The Chairman FBR thanked the Chief Financial Officers.

    FBR sources said that the meeting was important related to next review of Financial Action Task Force (FATF) on Pakistan.

    It is learnt that huge amount of money laundering was done through Benami bank accounts besides those were also used for tax evasion.

    The FBR chairman has already made it clear that the current amnesty scheme is the last opportunity for people having undeclared income and assets.

  • Foreign exchange reserves slipped to $15.09 billion

    Foreign exchange reserves slipped to $15.09 billion

    KARACHI: The foreign exchange reserves of the country have slipped by $36 million to $15.09 billion by week ended May 24, 2019 as compared with $15.126 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The official reserves of the central bank came down by $47 million to $8.01 billion by week ended May 24, 2019 as compared with $8.057 billion a week ago. The SBP attributed the decline in foreign exchange reserves of the central bank to external debt services and other official payments.

    However, the reserves held by commercial banks increased by $11 million to $7.079 billion when compared with $7.068 billion a week ago.

  • Stock market makes nominal gain amid selling pressure

    Stock market makes nominal gain amid selling pressure

    KARACHI: The stock market ended flat on Thursday after witnessed high band trading during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 35,974 points as against 35,959 points showing an increase of 15 points.

    Market carried with the momentum showed yesterday and opened on a positive note today with +259 points and 3M shares traded on the opening bell.

    During the session, the index went up by 577 points however, selling pressure brought the market down to -304 points at a point in time again.

    The main cause of concern was again Market Support Fund, where rumours kept circulating that it has not yet been approved, despite clarity given by SECP Chairman and Advisor to Finance Ministry.

    By the end of session, ECC’s approval of EMOF and SEF (Enterprise Funds) brought some confidence back to the investors, however, market did not recover the eroded points.

    Banking sector led the volumes table with 40M shares, followed by Cement sector (38M). BOP contributed more than half the traded volumes in Banking Sector, whereas MLCF led the Cement Sector with 14M shares.

    Sectors contributing to the performance include Banks (+69 points), O&GMCs (+59 points), Autos (+19 points), Fertilizer (-68 points), Power (-38 points), Textile (-27 points), Cement (-23 points).

    Volumes increased from 182.5mn shares to 199.1mn shares (+9 percent DoD). Average traded value also increased by 17 percent to reach US$ 59.7mn as against US$ 51.1mn.

    Stocks that contributed significantly to the volumes include BOP, MLCF, UNITY, KEL and SNGP, which formed 38 percent of total volumes.

    Stocks that contributed positively include BAHL (+31 points), PSO (+23 points), UBL (+22 points), SNGP (+20 points) and NESTLE (+14 points). Stocks that contributed negatively include FFC (-35 points), HUBC (-32 points), ENGRO (-26 points), NML (-19 points) and OGDC (-15 points).