Pkrevenue.com

Author: Faisal Shahnawaz

  • Pakistan’ FDI declines by 52 percent in 10 months

    Pakistan’ FDI declines by 52 percent in 10 months

    KARACHI: Foreign Direct Investment (FDI) has declined by 52 percent during first 10 months of current fiscal year owing to higher repatriation of profits by corporate sector.

    The total FDI was recorded at $1.376 billion during July –April 2018/2019 as compared with $2.849 billion in the corresponding period of the last year, showing 51.7 percent decline, according to data released by State Bank of Pakistan (SBP) on Tuesday.

    The inflows under FDI registered 22 percent decline to $2.684 billion during first 10 months of current fiscal year as compared with $3.44 billion in the same period of the last fiscal year.

    The outflows on the other hand increased by 121 percent to $1.308 billion during July – April 2018/2019 as compared with $591 million in the same period of the last fiscal year.

    The total foreign private investment registered 64.3 percent decline to $968 million during July-April 2018/2019 as compared with $2.713 billion in the same period of the last fiscal year.

    The portfolio investment posted 200 percent decline during the period under review to outflow of $408 million as compared with the outflow of $136.2 million.

    Foreign public investment witnessed 140.4 percent decline to $2.45 billion during July – April 2018/2019 as compared with outflow of $990.6 in the same period of the last fiscal year.

  • Stock market gains 192 points on positive sentiments

    Stock market gains 192 points on positive sentiments

    KARACHI: The stock market ended with gain on Tuesday continuing the positive sentiments for second consecutive day.

    The benchmark KSE-100 index closed at 34,442 points as compared with previous day’s closing of 33,250 points with gain 192 points.

    Analysts at Topline Securities said that second consecutive session closed in positive trajectory, as bourse gained 192 points (0.57 percent), closing at 33,442 index level as creation of ‘Stock Market Support Fund’ triggered investors to rush for state owned stocks like, OGDC, SSGC, SNGP and PSO.

    These three stocks closed near to their upper locks in today’s session.

    Steel sector also outperformed, where ASTL, CSAP, and MUGHAL closed at their upper locks. Additionally, ISL and ASL closed to near to upper lock.

    Trading activity remained dull as volume went down by 7 percent, similarly, value decline 13 percent. Unity, TRG and KEL remained the volume leader of today’s session with cumulative volume of 40mn shares.

    Out of 307 actively traded scrips today, 173 closed positive, while 133 remained negative.

  • Rupee hits all time low at Rs152/dollar in interbank

    Rupee hits all time low at Rs152/dollar in interbank

    KARACHI: The Pak Rupee has plunged to another historic low against dollar on Tuesday owing to panic in the financial markets.

    The rupee fell by Rs2.35 to end at Rs152 to the dollar from last day’s closing of Rs149.65 in interbank foreign exchange market.

    The dollar made a new historic high to reach Rs152 and likely to fell more due to higher demand.

    The interbank foreign exchange marked was initiated in the range of Rs151.00 and Rs152.00.

    The market recorded a high of Rs152.50 and low of Rs151.75 and closed at Rs152.00.

    The exchange rate in open also witnessed historic low of Rs153.50 to the dollar in the cash ready market.

  • Temporary import of arms, ammunition by foreign hunters allowed

    Temporary import of arms, ammunition by foreign hunters allowed

    ISLAMABAD: The ministry of commerce has allowed temporary import of arms and ammunition by foreign hunters by amending Import Policy Order, 2016.

    The ministry issued SRO 565(I)/2019 to amend Import Policy Order, 2016.

    It said: “Temporary import-cum-export of arms and ammunition by foreign hunters shall be allowed subject to NOC from the ministry of interior.”

  • SRB launches amnesty scheme for exemption from penalty

    SRB launches amnesty scheme for exemption from penalty

    KARACHI: Sindh Revenue Board (SRB) on Monday launched an amnesty scheme to exempt penalty amount on payable as sales tax on services.

    However, concession has been granted on the payment of default surcharge.

    The SRB issued notification stating that the provincial revenue board had exempted the whole of the amount of penalty and such of the amount of default surcharge as is in excess of the amount of default surcharge, provided that the principal amount of the tax and the following amount of the default surcharge thereon are deposited during the periods as specified below:

    (a) the principal amount of tax (as outstanding on May 21, 2019) along with 5 percent of the amount of default surcharge thereon if deposited during the period from May 21, 2019 to May 27, 2019.

    (b) the principal amount of tax (as outstanding on May 21, 2019) along with 10 percent of the amount of default surcharge thereon if deposited during the period from May 28, 2019 to June 03, 2019.

    (c) the principal amount of tax (as outstanding on May 21, 2019) along with 15 percent of the amount of default surcharge thereon if deposited during the period from June 04, 2019 to June 10, 2019.

    (d) the principal amount of tax (as outstanding on May 21, 2019) along with 20 percent of the amount of default surcharge thereon if deposited during the period from June 11, 2019 to June 20, 2019.

    (e) the principal amount of tax (as outstanding on May 21, 2019) along with 25 percent of the amount of default surcharge thereon if deposited during the period from June 21, 2019 to June 30, 2019.

    The SRB said that the word ‘deposited’, used in the notification, means deposited by means of the Computerized Payment Receipt (CPR) so generated.

    The SRB further said that benefits of exemption of penalty and default surcharge, as specified in the notification, shall also be available in relation to the arrears of the tax (so outstanding on the May 21, 2019) payable under Sindh Sales Tax Ordinance, 2000 and under the Sindh Sales Tax on Services Act, 2011 by:

    (i) persons who are liable to be registered under Section 24 of the Act but were not registered, provided that:

    (a) they get themselves registered with SRB in the prescribed manner during the aforementioned periods from May 20, 2019 to June 30, 2019;

    (b) they deposited their tax liabilities for the principal amount of tax along with the aforementioned percentage of the amount of default surcharge thereon in relation to the tax periods from the date of the commencement of their economic activity to the tax period of May 2019;

    (c) they also e-file their tax returns, for the tax periods from date of commencement of their economic activity of taxable services to the tax period May 2019 during the period from the date of this notification to June 30, 2019.

    Explanation: For the purpose of word ‘registered’ in the case of withholding agents shall mean ‘e-signed up’ in terms of Sindh Sales Tax Special Procedure (Withholding) Rules, 2014;

    (ii) persons who were registered but were non-filers or null-filers or nil-filers of their tax returns;

    (iii) persons who were late-registered with SRB and they did not file all of their tax returns for the tax periods from the date of commencement of their economic activity of taxable services;

    (iv) persons who withheld any amount of Sindh sales tax but have either not deposited that withheld amount in provincial government account or have deposited the withheld amount in a head of account other that the Sindh government’s head of account.

    (v) persons who determine the arrears through self-detection and self-assessment;

    (vi) persons who short-paid any amount of tax in their tax returns and persons against whom any arrears of tax was detected in SRB’s scrutiny of tax returns or in SRB’s audit of taxpayers’ record;

    (vii) persons against whom any tax amount has been determined or assessed or adjudged, by an officer of the SRB, through an order or decision passed under the Sindh Sales Tax on Services Act, 2011, or the rules/notification issued thereunder;

    (viii) persons against whom any tax liability has been adjudged or confirmed by the Commissioner (Appeals) or the Appellate Tribunal;

    (ix) persons whose cases are under assessment or under adjudication with any officer of the SRB or are pending, at the appellate stage with the Commissioner (Appeals) or with the Appellate Tribunal; and

    (x) persons whose cases are under litigation in any court of law including the High Court or the Supreme Court.

    The SRB said that the benefits of this notification, to the extent as specified below, shall also be available in case where a person has late paid the principal amount of tax prior to the date of this notification and/ or has not yet discharged the liability of penalty (whether the prescribed amount or the adjudged amount of the penalty) and the default surcharge on such late payment provided that he pays an amount equal to:

    (a) 5 percent of such amount of penalty and 15 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from May 21, 2019 to June 3, 2019;

    (b) 10 percent of such amount of penalty and 20 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 04, 2019 to June 20, 2019; and

    (c) 15 percent of such amount of penalty and 25 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 20 21, 2019 to June 30, 2019.

    The SRB said that if the whole of the dues of the principal amount of tax and the aforementioned prescribed percentage of the amount of default surcharge thereon are paid by a person in terms of this notification, he shall not be prosecuted under Section 49 of the Act and the offence, to the extend of the arrears of the tax paid under this notification, shall also be compounded under Section 46 of the Act.

    The SRB further said that if the principal amount of the tax and the aforementioned percentage of the amount of the default surcharge thereon, as are paid in terms of this notification by the persons in clauses (vi) (vii) (viii) (ix) and (x) of paragraph 2 of the notification, are held to be not payable in view of the order issued by the respective competent authority (i.e. the adjudicating officer or the commissioner appeals or the appellate tribunal or the court of law), the officer of the SRB, not below the rank of an assistant commissioner, shall allow tax adjustment/credit of the amount or alternately, shall refund the amount, so paid, within 90 days from the date of receipt of the taxpayer’s application, for refund or for tax adjustment/credit, together with a copy of the order/judgment and also of the evidence that the incidence of the tax was not passed on to the service recipient.

    The SRB further said that the notification would not apply for refund or adjustment of any amount of tax or default surcharge or penalty as has already been paid or recovered on any date prior to May 21, 2019.

  • FBR issues draft rules to implement tax amnesty scheme 2019

    FBR issues draft rules to implement tax amnesty scheme 2019

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified draft rules to implement tax amnesty scheme 2019. The FBR invited comments or objections on the rules by May 22, 2019.

    According to the draft rules, the FBR notified following conditions for making declaration for foreign and domestic declaration:

    (1) For the purpose of incorporation of undisclosed assets and undisclosed expenditure declared under the Ordinance (asset declaration):

    (a) where income tax return for tax year 2018 has not been filed, the declarant shall, along with the declaration or such date as extended by the board [FBR], file

    (i) income tax return for the tax year 2018; and

    (ii) wealth statement or financial statement, as the case may be as on June 30, 2018.

    (b) Where income return for tax year 2018 has been filed under the provisions of the Income Tax Ordinance, 2001, the declarant shall, along with the declaration or such date as extended by the board, revise –

    (i) income tax return and financial statement filed for tax year 2018, if declarant is a company; or

    (ii) wealth statement, if the declarant is an individual or an association of persons.

    (2) Where as person declares undisclosed sales in terms of Section 3, he shall declare the undisclosed sales subject to the Sales Tax Act, 1990 and the Federal Excise Act, 2005 from July 2014 to June 2018, in the first sales tax and federal excise return, due after the declaration.

    (3) For the purpose of section 3 and 4 of the ordinance, in case of payment of tax of foreign assets –

    (a) the value of such assets shall be declared in respective foreign currency on Board’s website portal;

    (b) tax shall be paid in foreign currency as per procedure specified by the State Bank of Pakistan at the rate specified under the Ordinance; and

    (c) in case of tax payment after June 30, 2019 liability of tax and default surcharge shall be paid in foreign currency as per procedure specified by the SBP and will be calculated in Pak Rupee at an exchange rate prevailing on the date of payment.

    (4) For the purpose of clause (d) of Section 8 of the Ordinance, in case of foreign assets not being repatriated into Pakistan, if such assets represent cash or any other bearer assets, the same or its proceeds shall be deposited and retained in a foreign bank account of the declarant till June 30, 2019 and bank statement as evidence thereof, shall be provided by July 30, 2019 or such date as extended by the Board.

    (5) Payment of tax for original demand:

    For the purpose of sub-section (4) of Section 6 of the Ordinance, default surcharge and penalty shall not apply if, –

    (a) tax determined by an officer of Inland Revenue in the original order, is paid up to June 30, 2019;

    (b) such original order or an appellate order passed against such original order has not yet attained finality.

    Explanation: An original order passed by and officer of Inland Revenue or an appellate order passed by an appellate authority shall be taken to be final if no right of appeal has been provided against such orders or no appeal has been filed within the time limit prescribed under the applicable laws against such orders.

    (6) Payment of tax under other laws:

    For the purpose of Section 4, 12 and 16 of the Ordinance, where the declarant has paid tax under the Ordinance, no tax shall be payable by the declarant under the Income Tax Ordinance, 2001, the Sales Tax Act, 1990 and Federal Excise Act, 2005 in respect of such undisclosed assets, undisclosed expenditure or undisclosed sales.

    (7) Revision of declaration:

    Any person who having filed a declaration hereinafter referred to as the ‘original declaration’ discovers any omission, mistakes, computational error or wrong statement therein may file revised declaration within the due date specified in Section 3 of the Ordinance subject to the condition that the value of assets and the tax paid thereon shall not be decreased.

  • Stock market gains 84 points after early day losses

    Stock market gains 84 points after early day losses

    KARACHI: The stock market ended with gain of 84 points after recovery from massive loss earlier in the day on Monday.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,250 points as against 33,166 points showing an increase of +84 points

    Analysts at Arif Habib Limited said that KSE-100 index showed first signs of recovery and that too on a day when SBP is scheduled to announce monetary policy.

    Buying activity was observed in index heavy weights after an initial plunge of 814 points.

    Several stocks especially Cement sector, saw lower circuits. E&P Sector showed mixed reaction throughout the day, with OGDC trading above last trading day’s closing whereas PPL and POL saw attrition.

    PPL hit lower circuit, but recovered by the end of session. Similarly, O&GMCs performed well and SSGC, SNGP were seen trading at upper circuits.

    Sectors contributing to the performance include Banks (+74 points), O&GMCs (+50 points), Fertilizer (+31 points), Transport (+18 points), Tobacco (+15 points) and E&P (-118 points).

    Volumes increased significantly from 90 million shares to 166 million shares (+83 percent DoD).

    Similarly, Average traded value also doubled from US$ 21 million to US$ 41 million.

    Stocks that contributed significantly to the volumes include KEL, TRG, UNITY, LOTCHEM and PIBTL, which formed 29 percent of total volumes.

    Stocks that contributed positively include ENGRO (+44 points), HBL (+41 points), UBL (+33 points), PSO (+22 points) and PIBTL (+18 points). Stocks that contributed negatively include PPL (-94 points), MCB (-26 points), OGDC (-22 points), FFC (-10 points) and MTL (-9 points).

  • SBP increases policy rate by 150 basis points in line with IMF directives

    SBP increases policy rate by 150 basis points in line with IMF directives

    KARACHI: State Bank of Pakistan (SBP) on Monday increased key policy rate by 150 basis points to 12.25 percent, which is inline with the direction of newly agreed loan program with the IMF.

    The SBP in a statement said that there have been three notable developments since the last Monetary Policy Committee (MPC) meeting in March 2019.

    First, the government of Pakistan has reached a staff-level agreement with the International Monetary Fund for 39-month long Extended Fund Facility of around US$ 6.0 billion.

    The program is designed to restore macroeconomic stability and support sustainable economic growth, and is expected to unlock considerable additional external financing.

    Second, trends in government borrowing reflect a widening fiscal deficit during the first nine months of FY19 when compared to the same period in FY18.

    In addition, a greater reliance on central bank financing of the deficit has acted to dilute the impact of previous monetary tightening. Finally, since the last MPC, the exchange rate has depreciated by 5.93 percent to PKR 149.65 per USD, at the close of 20th May 2019, reflecting a combination of underlying macroeconomic factors and market sentiment considerations.

    SBP’s estimates show that economic growth is expected to slow in FY19 but rise modestly in FY20.

    This slowdown is mostly due to lower growth in agriculture and industry. More than two-thirds of real GDP growth in FY19 is expected to come from services.

    Going forward, some gradual recovery in economic activity is expected on the back of improved market sentiment in the context of the IMF supported program, a rebound in the agriculture sector and government incentives for export-oriented industries.

    The current account deficit narrowed to US$ 9.6 billion in Jul-Mar FY19 as compared to a deficit of US$ 13.6 billion during the same period last year, a fall of 29 percent.

    The reduction is mainly driven by import compression and a healthy growth in workers’ remittances. This impact was partially offset by higher international oil prices.

    The non-oil trade deficit declined from US$ 13.7 billion in Jul-Mar FY18 to US$ 11.0 billion in Jul-Mar FY19 reflecting the impact of stabilization policies implemented so far.

    Recent indicators suggest export volumes have begun to grow although total export receipts have not grown due unfavorable prices.

    Despite the improvement in the current account and a noticeable increase in official bilateral inflows, the financing of the current account deficit remained challenging.

    Consequently, reserves declined to US$ 8.8 billion as of 10th May 2019 from US$ 10.5 billion at end-March 2019. The exchange rate also came under pressure in the last few days.

    In SBP’s view, the recent movement in the exchange rate reflects the continuing resolution of accumulated imbalances of the past and some role of supply and demand factors.

    SBP will continue to closely monitor the situation and stands ready to take measures, as needed, to address any unwarranted volatility in the foreign exchange market.

    Furthermore, the current level of reserves is below standard adequacy levels (equal to three months of imports cover). As noted in previous MPC statements, deep structural reforms are required to improve productivity and competitiveness of export-oriented sectors and improve the trade balance.

    The overall fiscal deficit is likely to be considerably higher during Jul-Mar FY19 as compared to the same period last year due to a shortfall in revenue collection, higher than budgeted interest payments and security related expenditures. From a monetary policy perspective, a growing portion of the fiscal deficit has been financed through borrowings from SBP.

    In absolute terms, the government borrowed Rs 4.8 trillion from SBP during 1st Jul-10th May FY19, which is 2.4 times the borrowing during the same period last year.

    A major portion of this borrowing from the SBP (Rs 3.7 trillion) reflects a shift away from commercial banks which were reluctant to lend to the government at prevailing rates.

    The resulting increase in monetization of the deficit has added to inflationary pressures.

    Despite the recent tightening of monetary policy, private sector credit rose 9.4 percent during 1st Jul-10th May, FY19.

    Much of the increase in credit was for working capital needs due to higher input prices. The expansionary impact of higher government borrowing and private sector credit on broad money supply (M2) was partly offset by a contraction in net foreign assets of the banking sector.

    In aggregate, broad money supply grew by 4.7 percent during 1st Jul – 10th May, FY19.

    The consumer price index (CPI) rose 9.4 percent in March 2019 and 8.8 percent in April 2019, on a y-o-y basis. Average headline CPI inflation reached 7.0 percent in Jul-Apr FY19 compared to 3.8 percent in the same period last year.

    Moreover, the annualized headline month-on-month inflation has risen considerably in the last three months due to the recent hike in domestic fuel prices and rising food prices and input costs.

    As such, inflationary pressures are likely to continue for some time. The most recent IBA-SBP consumer confidence survey also shows that most households expect higher inflation during the next six months.

    Taking into account the recent developments discussed above and outlook for key sectors, average headline CPI inflation is expected to be in the range of 6.5-7.5 percent in FY19 and it is anticipated to be considerably higher in FY20.

    This inflation outlook is subject to a number of upside risks from an expected rationalization of taxes in the upcoming budget, potential adjustments in electricity and gas tariffs, and volatility in international oil prices. The inflation outlook suggests a fall in real interest rates on a forward-looking basis.

    Taking into account the above considerations and the evolving macroeconomic situation, the MPC noted that further policy measures are required to address underlying inflationary pressures from (i) higher recent month-on-month headline and core inflation outturns; (ii) recent exchange rate depreciation; (iii) an elevated fiscal deficit and its increased monetization, and (iv) potential adjustments in utility tariffs.

    In this context, the MPC decided to increase the policy rate by 150 bps to 12.25 percent effective from 21st May 2019.

  • Customs Intelligence Lahore to auction vehicles on May 23

    Customs Intelligence Lahore to auction vehicles on May 23

    LAHORE: Directorate of Intelligence and Investigation, Customs, Lahore has announced auction of vehicles to be held on May 23 at State Warehouse of the directorate.

    Following vehicles would be presented for the auction:

    1. Toyota progress car, 2927cc, 1999, JCJ11-0005820.

    2. BMW car 745I, 2003, WBAGL22000DP38322.

    3. Honda Civic Hybrid car, 1339cc, 2006, FD3-1006468.

    4. Honda Accord car CL-9, 2002, CL9-1000417.

    5. Toyota Mark-X car, 2005, GRX120-0025787.

    6. Honda Accord car (inspire), 2003, UCI-1007210.

    7. Jaguar X-Type 2.5 car, 2006, SAJAC51MX2XC26667.

    8. Toyota Crown car, 2003, JZS175-0064405.

    9. Toyota Crown car, 2001, JZS171-0075220.

    10. Toyota Crown car, 2007, GRS182-5014070.

    11. Honda Accord car, 2004, CL9-1050040.

    12. Triumph Heavy Motor cycle Colour Black, 2010, PROTOTYPEVH004CP2.

    13. Heavy Motor Cycle Yamaha Brand 1000cc made in Japan, R12000, JYARN041000003182.

    14. Toyota Vitz car, 2005, KSP90-0001037.

    15. Toyota Mark-X car Black, 2008, GRX120-3059202.

    16. Yamaha Dragstar Heavy Motor cycle 1100cc, 2002, VP10J-001201.

    17. Yamaha Heavy Motor cycle 500cc, 2006, JYASJ031000032395.

    18. Honda Heavy Bike 200cc, 2006, TA200-0034612.

    19. Honda Heavy Motor Cycle, 1992, 2073695.

    20. Toyota Mark-X Car 300, 2006, GRX121-1007695.

    21. Toyota Mark-X car 250, 2005, GRX120-3005684.

    22. BMW Car 750Li, 2002, WBAGN62040DE55989.

    23. Honda Civic car, 2006, FD3-1004522.