Pkrevenue.com

Author: Faisal Shahnawaz

  • Important meeting on exchange rate situation to be held today

    Important meeting on exchange rate situation to be held today

    KARACHI: Dr. Abdul Hafeez Shaikh to chair an import meeting of a committee which will also be attended by members of exchange companies association today (Tuesday) to discuss the options for strengthening the local currency.

    Prime Minister Imran Khan had constituted the committee suggestions submitted by Exchange Companies Association of Pakistan (ECAP).

    The meeting will also be attended by officials of State Bank of Pakistan and other relevant authorities.

    Malik Bostan, Chairman, ECAP will lead a five – member team at the meeting.

    According to the ECAP chairman the association had submitted proposals for the strengthening the rupee value.

    Malik Bostan said that the proposals had focused on improving foreign exchange reserves of the country.

    He said that due to recent measures the local currency had strengthened by Rs3 against dollar during last few days.

    Malik Bostan urged people not to pay heed on the rumors about shortage of dollar. He said that the greenback would further weaken in coming days.

    He said that the exchange companies had given around $15 million to scheduled banks.

    He said that inflows were coming from overseas Pakistan on the occasion of Eid-ul-Fitr. “The overseas Pakistanis are sending around $3-4 million daily,” he said.

    Malik Bostan said that hopefully another $100 million would be given to scheduled bank by Eid-ul-Fitr.

  • FBR withdraws zero-rate facility to textile unit for no business activity at declared address

    FBR withdraws zero-rate facility to textile unit for no business activity at declared address

    KARACHI: Federal Board of Revenue (FBR) suspended zero-rated sales tax facility on supply of electricity and gas to a textile unit for not operational at declared place of business activity.

    The FBR issued Sales Tax General Order (STGO) No. 98 and 99 to withdraw the sales tax zero-rated facility on supply of electricity and gas to M/s. Teetex Industries because the unit was no more operational at the declared place.

    The FBR directed Chief Commissioner Inland Revenue, Corporate Regional Tax Office, Karachi to coordinate with K-Electric and SSGCL regarding implementation of the amendment in the general order and submit report in respect of action taken/ recovery made, if any, for misuse of the facility.

    The FBR also asked K-Electric and Sui Southern Gas Company Limited to start charging sales tax on the supply of electricity and gas to the taxpayers with immediate effect.

  • FBR urged to extend tax credit to investment in infrastructure

    FBR urged to extend tax credit to investment in infrastructure

    KARACHI: Federal Board of Revenue (FBR) has been urged to extend tax credit facility to investment in factory building and manufacturing related infrastructure.

    Pakistan Tax Bar Association (PTBA) in its tax proposals for budget 2019/2020 said that tax credit under section 65E of Income Tax Ordinance, 2001 is restricted to investment in plant and machinery.

    Tax credit under section 65D is available only at the time of setting up a new industrial undertaking. No tax credit is given on subsequent expansion of such an industrial undertaking since section 65E restricts eligibility to companies formed before 01 July, 2011.

    Expansion of plant or undertaking a new project involves investment in factory building and manufacturing related infrastructure and as such, these types of investments should also be made eligible for tax relief.

    Expansion is also possible in industrial units’ set-up after 01 July, 2011.

    It is, therefore, recommended that tax credit under section 65E should also be extended to investment in factory building and manufacturing related infrastructure.

    Applicability of section 65E to only such companies’ setup after 01 July, 2011 may be relaxed to include industrial undertakings formed thereafter as well, which undergo expansion.

    An increased availability of tax credits may act as an incentive to new investment since the investors foresee tax benefits which they may practically be able to utilize.

    The tax bar further highlighted that tax credits under sections 65B and 65E are restricted to investment in plant and machinery.

    The rational behind these tax credits is not the purchase of plant and machinery but industrial expansion and increased economic activity. In this regard, it may be appreciated that expansion of business (and the consequent increase in economic activity) is not achieved from plant and machinery in isolation and is, for all practical purposes, not possible without an appropriate support structure.

    In order to streamline section 65B(4) with the wordings of section 65B(1), the following wording, in bold, may be inserted:-

    “65B (4) make an investment for the purposes of extension, expansion, balancing, modernization and replacement of the plant and machinery.”

    An explanation be added to sub-section (1) of Section 65B:-

    “For removal of doubts, for the purposes of this section, it is declared that the words “purchase of a plant and machinery” includes all direct expenses which are necessary to make the Plant and Machinery in a workable condition and also includes factory buildings and manufacturing related infrastructure.”

    Tax credit under Section 65E should also be extended to investment in factory building and manufacturing related infrastructure, the PTBA recommended.

    The proposed amendment/modification in tax credits will clarify the ambiguity for the companies’ set-up before first day of July, 2011 and shall promote industrial expansion and increased economic activity.

  • FBR asks refund claimants to open CDC account

    FBR asks refund claimants to open CDC account

    KARACHI: Federal Board of Revenue (FBR) has asked taxpayers, who opted for a sales tax refund through bonds, to open their accounts with the Central Depository Company (CDC).

    In an advisory issued on Monday, the FBR said that refund claimants who have opted for sales tax payments through bonds should open investor account with the CDC if they do not already have such accounts.

    FBR said that refund claimants who have opted for payment through bonds but have not provided proper CDC account as per given format, can update CDC accounts by visiting FBR website.

  • KSE-100 earnings decline by 1.2pc in July – March

    KSE-100 earnings decline by 1.2pc in July – March

    KARACHI: The earnings of benchmark KSE-100 index of Pakistan Stock Exchange witnessed a decline of 1.2 percent year on year during July – March 2018/2019.

    Analysts at Arif Habib Limited said on Monday that based on sectoral weight, this was led primarily by Cements (-7.8 percent YoY; 5.7 percent weight), Oil & Gas Marketing Companies (-65 percent YoY; 4.3 percent weight), Automobile Assemblers (-44 percent YoY; 3.1 percent weight), and Pharmaceuticals (-34 percent YoY; 1.9 percent weight).

    Whereas sectors that remained top performers were Commercial Banks (+2.1 percent YoY; 28.0 percent weight), Oil & Gas Exploration Companies (+35 percent YoY; 15.7 percent weight), Fertilizers (+5.7 percent YoY; 14.3 percent weight), Power Generation & Distribution (+21.5 percent YoY; 6.5 percent weight), Chemicals (-10 percent YoY; 2.0 percent weight), and Miscellaneous (-63 percent YoY; 1.8 percent weight).

    In particular, profitability during 9MFY19 declined by 4.3 percent YoY driven by profits’ attrition in heavy weight Commercial Banks (-27.2 percent YoY) while Oil & Gas Exploration Companies (+46 percent YoY) and Fertilizers (+20.1 percent YoY) posted profitability improvements.

    Sequential downturn in bottom-line of the KSE100 index arrived at 3.5 percent QoQ led by pressure faced by Oil & Gas Exploration Companies (-8.8 percent QoQ) and Fertilizers (-23 percent QoQ).

    Sectors leading the profitability chart during 9MFY19 were Synthetic & Rayon (+147.8 percent YoY), Textile Weaving (+143.5 percent YoY), and Vanaspati & Allied Industries (+137.3 percent YoY). During 3QFY19, Textile Weaving (+158.8 percent YoY), Woolen (+139.7 percent YoY) and Paper & Board (+102.0 percent YoY) led the earnings chart of the index.

    During 3QFY19, the KSE100 index rose by 1,583 points (+4.3 percent QoQ) majorly owing to Banks (919 points), Oil & Gas Exploration Companies (814 points) and Fertilizers (617 points).

    During 9MFY19, the KSE100 index declined by 3,259 points (-7.8 percent YoY) with the bearish trend being led by Commercial Banks (-317 points), E&P Companies (-298 points), Cements (-497 points) and the Power sector (-387 points).

    On the other hand, Fertilizers (+632 points) and Tobacco (+193 points) contributed positively to the index.

    We have based our analysis on the KSE100 index companies. 94 companies have announced their results and have been included in this analysis while the remaining 6 companies have not yet disclosed their results.

    The companies which have been included in our analysis represent almost 96 percent of the market capitalization of the benchmark bourse.

  • FBR bans entry of unauthorized persons, Lappoos into custom houses

    FBR bans entry of unauthorized persons, Lappoos into custom houses

    KARACHI: Federal Board of Revenue (FBR) has restricted entry of unauthorized persons, including privately hired persons by customs officials (Lappoos), into custom houses with immediate effect.

    In a statement issued on Monday, Pakistan Customs said that FBR chairman Syed Muhammad Shabbar Zaidi ordered the ban on entry of unauthorized persons into customs station in order to ensure transparency in clearance system.

    The FBR chairman while taking notice of presence of large number of visitors for making the entire clearance system doubtful, had ordered Customs Wing to strictly restrict, entry into Customs Houses, only to the concerned traders, their authorized representatives and members and relevant trade bodies/ associations.

    Accordingly Customs Wings is in process of issuing instructions to its field formations for immediately restricting entry of all un-authorized persons, the statement said.

    The visiting hours for traders and their authorized representatives for fulfillment of needed legal formalities in cases involving second review before Assistant / Deputy Collectors shall be limited from 10:00 Am to 1:00 PM.

    The press release said that Pakistan Customs is operating its Web Based One Customs (WeBOC) system in order to facilitate the trade and provide ease of doing business in carrying out imports, exports and transit trade.

    This system is available 24/7 and allows on-line submission and processing of documents as well as electronic payments of duty and taxes.

    As such the need for traders and their representatives to physically visit offices of Customs has drastically been reduced.

  • Stock market ends flat in range bound activity

    Stock market ends flat in range bound activity

    KARACHI: The stock market ended flat on Monday in range bound trading activities.

    The Index closed at 35,697 points as against 35,704 points showing a slight decline of 6 points.

    Analysts at Arif Habib Limited said that market traded range bound between -93 points and +188 points.

    The volumes on Al Shares Index withered as compared to recent sessions, nonetheless a total of 125 million shares scored on the board.

    Cement Sector remained in the lime light as was the case last week and tallied 21 million shares followed by Technology (17 million) and O&GMCs (14 million).

    Among scrips, WTL topped volumes with 10M shares, followed by MLCF (9 million) and SNGP (7 million).

    Investors engaged in switching positions while booking profits on scrips that were bought last week resulting in Index taking off.

    Buying activity is still intact that encouraged investors to put the despondency in macro variables on the back burner and consider long term fundamentals to take charge.

    Sectors contributing to the performance include O&GMCs (+57 points), Pharma (+31 points), Fertilizer (-56 points), E&P (-44 points) and Tobacco (-24 points).

    Volumes declined from 142 million shares to 125.2 million (-12 percent DoD). Average traded value also declined by 18 percent to reach US$ 33.3 million as against US$ 40.4 million.

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

    Stocks that contributed positively include PSO (+26 points), SNGP (+18 points), SEARL (+15 points), BAHL (+15 points) and ENGRO (+13 points). Stocks that contributed negatively include FFC (-51 points), PAKT (-24 points), PPL (-24 points), POL (-19 points) and NBP (-19 points).

  • Rupee makes significant gain against dollar

    Rupee makes significant gain against dollar

    KARACHI: The rupee made gain of Rs1.40 paisas against dollar on Monday in interbank foreign exchange market.

    The rupee ended Rs149.80 to the dollar as compared with last Friday’s closing of Rs151.20 in interbank foreign exchange market.

    The interbank foreign exchange market on Monday initiated in the range between Rs 150.60 and 150.90.

    The market recorded day high of Rs 151.00 and low of Rs 149.25 and closed at Rs 149.80.

    The exchange rate in open market also witnessed appreciation in rupee value.

    The buying and selling of dollar was recorded at Rs151.20/Rs151.70 from last Friday’s closing of Rs151.80/Rs152.50 in the cash ready market.

  • FBR suggested reduced corporate tax rate for job creation

    FBR suggested reduced corporate tax rate for job creation

    KARACHI: Federal Board of Revenue (FBR) has been suggested to reduce corporate tax rate by one percent for companies creating 50 or more new jobs in a year.

    Pakistan Business Council (PBC) in its tax proposals for budget 2019/2020 suggested the government to reduce tax rate for companies creating more jobs during a year.

    “One percent lower tax rate for existing companies that create 50 or more new jobs on their own payroll in a year.”

    Giving rationale to the proposal, the PBC said that Pakistan needs to find employment for two million youth each year.

    The PBC further suggested first year depreciation allowance for investment in making upgrades to the provision of facilities (including lifts, ramps) for the specially challenged in the workplace or business.

    It further suggested 0.5 percent lower tax rate for providing livelihoods to specially challenged persons equal to five percent of the workforce.

    Giving rationale to the changes, the PBC said that in order to demonstrate a commitment to creating livelihoods for all and work toward target of sustainable development goal – “By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.”

    It further said that no or limited facilities that allow access in the workplace or business for the specially challenged thereby deterring the disabled from working.

  • Pakistan, China sign four CPEC agreements to boost bilateral cooperation

    Pakistan, China sign four CPEC agreements to boost bilateral cooperation

    ISLAMABAD: Pakistan and China on Sunday signed four agreements under China Pakistan Economic Corridor (CPEC) in order to further enhance bilateral cooperation.

    The signing ceremony was held here during the three-day visit of Chinese Vice President Wang Qishan, who arrived earlier in the day along with a high level delegation.

    Prime Minister Imran Khan and the Chinese Vice President witnessed the signing ceremony, which also attended by Minister for Foreign Affairs Shah Mahmood Qureshi, Planning Minister Khusro Bakhtiar, Finance Advisor Abdul Hafeez Sheikh and members of the Chinese delegation.

    A Framework Agreement on Agricultural Cooperation was signed by Chinese Vice Minister Zhang Taolin and Secretary Ministry of National Food Security Dr Muhammad Hashim Popalzai.

    A memorandum was signed on the “Requirements of FMD free zone where vaccination is practiced between General Administration of the Customs of China and Animal Quarantine Department of the Ministry of National Food Security and Research of Pakistan.”

    Chinese Ambassador in Pakistan Yao Jing and Dr Hashim Popalzai signed the document.

    The two countries also signed China Pakistan Economic Cooperation Agreement signed by Chinese Vice Minister Deng Boqing and Secretary Economic Affairs Division Noor Ahmed.

    Chinese Vice Minister Deng Boqing and Secretary EAD also signed a Letter of Exchange for Disaster Relief Goods between the two countries.

    The two friendly countries also inked agreement between CMEC and Government of Balochistan and Lasbela University in Modern Agriculture Comprehensive Development in Lasbela.

    The document was signed by Vice President of CMEC from China and Vice Chancellor Lasbela University Professor Dr Dost Muhammad Baloch and PS to Governor Balochsitan.