Pkrevenue.com

Author: Faisal Shahnawaz

  • Customs announces auction of luxury vehicles on May 21

    Customs announces auction of luxury vehicles on May 21

    ISLAMABAD: Pakistan Customs announced public auction of luxury vehicles lying at Prime Minister House to be held on May 21, 2019 at State Warehouse, Islamabad Dry Port.

    Following vehicles will be presented for auction:

    01. BMWX5 Jeep, Model 2016 (armored), Chassis No. WBAKR6209G0M99712

    02. BMWX5 Jeep, Model 2016 (armored), Chassis No. WBAKR620200M9904

    03. BMWX5 Jeep, Model 2016 (armored), Chassis No. WBAKR6202G0M99714

    04. Mercedes Benz S600L (Guard), Model 2016, Chassis No. WDD2221762A266834

    05. Mercedes Benz S600L (Guard), Model 2016, Chassis No. WDD2221762A267771

    06. Mercedes Benz Maybach S600, Model 2016, Chassis No. WDD2229762A265866

    07. Mercedes Benz Maybach S600, Model 2016, Chassis No. WDD2229762A266494

    08. BMW Car 761 U, Model 2014, Chassis No. CH-WBAHP42000DY99225

    09. BMW Car 760 U, Model 2014, Chassis No. CH-WBAHP42020DY99226

    10. Toyota Land Cruiser Jeep (Protected) Model 2014, Chassis No. URJ2024093203

    11. Toyota Land Cruiser, Model 2008, Chassis No. JTECB01J301032994

    12. Toyota Land Cruiser, Model 2008, Chassis No. JTEEV73J4000002043

    13. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201752A73693

    14. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201762A457073

    15. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201752A476036

    16. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201752A475123

    17. Stretched Limousine Car (Protected) Model 2005, Chassis No. WDB-2201752A457643

    18. Toyota Lexus Jeep (Protected) 2005, Model JTJHT00W633531475

    19. Mercedes Benz Car, (Protected) Model 2005, Chassis No. WDB-2201762A457435

    20. BMW 760LI, Model 2014 (Protected), Chassis No. WBAPH2070DY99223

    21. Mitsubishi Lancer S/Saloon Model 1994, Chassis No. CSNBIRU00812

    22. BMWX5 Jeep, Model 2016, Chassis No. WBAKR6206G0M99845

    23. BMWX5 Jeep, Model 2016, Chassis No. WBAKR6204G0M99830

    24. Lexus Jeep, Model 2006, JTJHT00W564013596

  • Higher duty rates proposed for car, luxury items import

    Higher duty rates proposed for car, luxury items import

    KARACHI: The Federal Board of Revenue (FBR) has been suggested to impose higher rates of duties on import of non-essential and luxury items in order to reduce current account deficit.

    Association of Chartered Certified Accountants (ACCA) in its tax proposals for budget 2019/2020 said that tangible measures should be taken to reduce the import burden.

    “Heavy duties should be levied on all non-essential imports like expensive electronics, cars & luxury items.”

    In addition incentives should be announced for local industry to encourage domestic products, it suggested.

    In other key reforms, the ACCA said that agricultural sector needs to be re-evaluated.

    Being an agricultural country its GDP share must be according to its volume. Currently its share in GDP is 24 percent while it has the potential to reach up to 55 percent.

    Large landowners should be taxed at minimal rates i.e. 7 percent with that revenue used to subsidize seeds, fertilizers, water, electricity, fuel, etc. for the small farmers.

    Cheap and low quality smuggling and imports from India should be controlled.

    The ACCA said that for Pakistan, a country of 220 million people, human capital is a huge resource in new era, but unfortunately due to incompetent and poor policies we are unable to convert this power in to workable force, un-employment has increased to almost 6 percent and over 4 million people are unemployed.

    Keeping in view the above indicators the government needs to encourage services sectors, new industries and agriculture.

    Banking sector should be used to incentivize and promote a culture of entrepreneurship.

    Incentives must be announced for Services sectors particularly Telecom, home based industries, young entrepreneurship programs with special focus on women.

  • Tax amnesty scheme step in right direction: FPCCI

    Tax amnesty scheme step in right direction: FPCCI

    KARACHI: The members of Federation of Pakistan Chambers and Commerce of Industry (FPCCI) have unanimously declared the recently announced tax amnesty by the present government is step in right direction.

    The FPCCI held an emergent meeting of its members at its head office Karachi on Saturday under the chairmanship of Abdul Rauf Mukhtar, Acting President of FPCCI and reviewed/discussed the new tax amnesty scheme namely “Asset Declaration Scheme 2019” as announced by the PTI government which has come in to effect through a Presidential Ordinance.

    The meeting was attended by S.M. Muneer, leader of the Business Community and Former President of FPCCI; Dr. Mirza Ikhtiar Baig, Sr. Vice Presidents; Vice Presidents FPCCI Arshad Jamal, Muslim Muhammadi, Waqar Mehmood Khan and Noor Ahmed Khan, Zubair Tufail, Former President FPCCI, Former Sr. Vice Presidents FPCCI Khalid Tawab, Syed Mazhar Ali Nasir and Aamer Ata Bajwa, Former Vice Presidents Hanif Gohar, Shakil Dhingra, Akbar Abdullah and other representatives of trade and industry.

    FPCCI acting president Abdul Rauf Mukhtar termed the scheme as a right step in the right direction with the objective to bring the tax evaders under the tax net, enhancing the country’s revenue base, documentation of economy, curtailing the size of ever increasing black economy and to bring dead assets in the mainstream of economy and make them functional.

    He also urged the government to ensure complete secrecy and confidentiality of the declarants’ data to enhance the confidence of tax payers in the scheme- a pre-requisite for success for any scheme.

    Highlighting salient features of the scheme, the FPCCI Acting President informed, “The rates of tax imposed on undisclosed assets, sales and expenditures would be 4 percent on all assets; rate of tax would be 1.5 percent on domestic immovable properties; rates of tax would be 6 percent on foreign liquid assets not repatriated; rate of tax would be 4 percent on unexplained expenditure and rate of tax would be 2 percent on undisclosed sales.”

    The participants termed the 4 percent tax rate as attractive for legalisation of black money held in the form of expenditures, sales and assets including foreign assets; however, they said that duration of the scheme is relatively less as the scheme would offer a period of 45 days to people for declaration of their undeclared assets along with payment of taxes until June 30, 2019.

    They added that the PTI government announced its first tax amnesty scheme for whitening of undisclosed expenditures, sales and assets including foreign assets at nominal tax rates and were of the unanimous opinion that the time period of the scheme should be extended beyond June 30, 2019 up to December 31, 2019.

    They appreciated the FBR’s move to issue the scheme in Urdu language as well as in simplified declaration form.

    They were of the opinion that legalization of undeclared assets at 4 percent is very attractive although the rates are comparatively higher as compared to last amnesty scheme.

    They added for the first time lucrative rate of 1.5 percent has been offered for real estate sector.

    They, referring to the size of the parallel economy were of the opinion that resolution of real state and bearer instruments issues were necessary to clip the wings of grey economy otherwise these would be surfacing periodically in future and the government would have to offer amnesty scheme again and again.

    They also lauded government efforts to broadening the tax base and enhance tax to GDP ratio as it was one of the lowest in the world.

    The participants were of the opinion that this time the scope of the scheme would be for those avenues which were not covered in earlier ones like sales tax and benami assets especially benami bank accounts.

    The members urged the government to publicize the scheme rigorously because that one may who may not be aware the penalties associated with it for not availing the scheme, including confiscation and imprisonment, and that this is the very last chance to avail it.

    They also proposed that the limit of Rs5 million for gold jewelry be withdrawn and the condition of depositing cash in hand in bank to avail the scheme be also removed.

  • SBP may continue with monetary policy tightening; 100 basis points increase likely

    SBP may continue with monetary policy tightening; 100 basis points increase likely

    KARACHI: The State Bank of Pakistan (SBP) likely to increase key policy rate by 100 basis points in the next monetary policy announcement scheduled for May 20, 2019, analysts said.

    Analysts at Arif Habib Limited forecast another rate hike of 100bps in policy rate from 10.75 percent to 11.75 percent in the upcoming monetary policy.

    The aggressive monetary tightening is expected to continue by the central bank as it is going to be the seventh consecutive rate hike, they said.

    The monetary tightening is expected on the back of

    i) rising inflationary pressure due to rise in prices of petroleum products and essential food items coupled with continuous slide of PKR leading to surge in prices of imported and local products (sold on import parity),

    ii) mounting Fiscal Deficit despite sharp cut in PSDP and rationalization of tariffs and duties, and

    iii) narrowing real interest rate as it declined to 1.66% in May’19 compared to last four year average of 2.75%.

    The analysts believed the SBP is adopting a proactive stance to increase policy rate on account of higher inflation in upcoming months alongside attempting to curtail the current account deficit.

    Since October 2011, the analysts observed that during International Monetary Fund (IMF) period real interest rate (RIR) has always remained on the higher side at an average of 3.1 percent compared to an average of 2.2 percent in non-IMF period.

    “This depicts that the IMF expects an increase in discount rate for sustainability despite lesser CPI during the period,” they added.

    Furthermore, it seems like the money market has already incorporated the rate hike which is essential to fulfill the gap of 61bps between 12-M T-Bills (11.86 percent) and Discount Rate (11.25 percent).

    The analysts conducted a short survey with institutional investors regarding their view on 1) interest rate in the upcoming Monetary Policy Statement (MPS) and 2) outlook on interest rates going forward.

    Majority of the respondents (53 percent) are of the view that the interest rates are likely to see a 100 bps spike in the upcoming MPS.

    Only 12 percent of the respondents opined that the rates may see a 150 bps surge.

    With regards to whether interest rates have peaked, 71 percent of the respondents are of the view that the rate hike era is yet to halt and will see further hikes going forward.

    It is asked the poll respondents about their 1-Yr forward view on the interest rate cycle. About 48 percent of the respondents are of the view that interest rates will see a surge of 50-100 bps in the next one year.

    Around 29 percent of the respondents do not see any further rate hike following the upcoming MPS.

    The analysts believed that May 2019 inflation to settle at 9.59 percent YoY compared to 4.19 percent in May 2018 and 8.82 percent in April 2019, respectively.

    They said inflation to continue its upward trajectory in upcoming months amid low base effect of last year, sharp increase in prices of perishable goods (fresh vegetables and fresh fruits), lagged impact of adverse exchange rate movements and gradually increasing international oil prices which may result in higher prices of local petroleum products (MoGas and HSD). This may keep inflation in the range of 9.0-9.5 percent for the next four months.

  • FBR chairman agrees on abolishing withholding tax on raw materials

    FBR chairman agrees on abolishing withholding tax on raw materials

    KARACHI: Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) on Saturday asked business community to provide list of raw material for reducing tax rates on import stage.

    Addressing the business community at Karachi Chamber of Commerce and Industry (KCCI), Shabbar Zaidi agreed with the business community that there should not be withholding tax on import of raw material.

    The KCCI members raised the issue that withholding tax rates ranging 3 percent to 6 percent were imposed on import of raw materials.

    “Yes. There should not be withholding tax on raw material,” Zaidi said and asked the KCCI to provide list for taking action before the next budget.

    Talking on Amnesty Scheme – 2019, the chairman said that the asset declaration scheme was clear and there was no ambiguity.

    He said that the scheme would be part of the Finance Bill for formal approval from the parliament and it would be the same as promulgated through the presidential ordinance.

    The chairman said that the rules were being formulated for intending declarants.

    Shabbar Zaidi also talked about smuggling and misuse of tax concessions.

    He said that tax relief may be given to small number of raw materials but it cannot be extended to all imported goods.

    He said that Afghan Transit Trade was used for smuggling into Pakistan. “But there are other ways to import illegal goods into the country,” he added.

    The chairman asked the business community that once they declare the smuggled goods were illegal for selling in the local market. “If the business community support and promise there will be no protest then the raids against illicit goods will be launched from tomorrow,” the chairman added.

  • Rupee falls by 4.58 percent against dollar in a week

    Rupee falls by 4.58 percent against dollar in a week

    KARACHI: The rupee fell by 4.58 percent against dollar during the last week in interbank foreign exchange market. The fall mainly attributed to IMF loan program which was recently agreed by Pakistan.

    The dollar reached to record high by end of last weekly trading day on Friday. The interbank foreign exchange market ended Rs148.00 to a dollar.

    The country had agreed to the conditionalities involved in IMF’s Extended Fund Facility during this week. Since the initial agreement to the IMF program the financial markets of Pakistan had crashed mercilessly.

    Currency analysts said that the dollar appreciated by Rs6.48 during last trading week. The exchange rate was started the week at Rs141.40 and ended at Rs148.00 to the dollar in interbank foreign exchange market.

  • Weekly Review: Monetary policy to set market trend

    Weekly Review: Monetary policy to set market trend

    KARACHI: The change in key policy rate to be announced by the State Bank of Pakistan (SBP) on May 20 will set the market trend during the next week.

    “With monetary policy to be announced in the coming week investors are most likely to have a cautious approach and bearish sentiments may persist,” analysts at Arif Habib Limited said on Saturday.

    Given uncertainty in PKR/USD parity, macro-economic concerns and lack of positive triggers we expect the market to trade range bound. However, attractive valuation may revive investor sentiments.

    The analysts said that the market continued to bleed this week, commencing on a negative note.

    The expectation of positive sentiments upon agreement of IMF Program did not materialize.

    Investors remained cautious due to tough measures attached with the program.

    However, investors took a sigh of relief mid-week owing to Pakistan’s emerging market status being retained, positive news regarding offshore drilling (final stages) and approval of amnesty scheme by the cabinet.

    The momentum, however, was short lived as the Pak Rupee witnessed depreciation against the USD and concerns persisted over a significant rate hike in the upcoming monetary policy statement.

    The market shed 1,550 points (down by 4.5 percent) WoW, closing at 33,166 points.

    Negative sector-wise contributions came from i) Fertilizers (335 points), ii) Cements (237 points), iii) Commercial Banks (229 points), iv) Oil & Gas Marketing Companies (219 points) and v) Pharmaceuticals (92 points).

    Whereas, sectors that contributed positively include i) Oil & Gas Exploration Companies (83 points) and ii) Power Generation (19 points).

    Scrip-wise negative contributions came from FFC (161 points), PSO (85 points), ENGRO (80 points) and HBL (76 points). Whereas, positive scrip-wise contributions came from PPL (109 points), HUBC (84 points), and POL (49 points).

    Foreign buying continued this week clocking-in at USD 8.2 million compared to a net buy of USD 10.4 million last week. Buying was witnessed in Commercial Banks (USD 8.2 million) and Cement (USD 5.6 million).

    On the domestic front, major selling was reported by Mutual Funds (USD 19.1 million) and Insurance Companies (USD 2.4 million). Average Volumes settled at 107 million shares (up by 46 percent WoW) while value traded clocked in at USD 29 million (up by 29 percent WoW).

  • Elimination of regulatory duty, additional customs duty on essential raw materials recommended

    Elimination of regulatory duty, additional customs duty on essential raw materials recommended

    KARACHI: Federal Board of Revenue (FBR) has been suggested to eliminate additional customs duty and regulatory duty on essential raw materials.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals recommended tariff rationalization in the forthcoming for budget 2019/2020.

    It recommended elimination of additional custom duty and regulatory duty on essential raw materials, which are either not locally available or in limited supply, used for local manufacturing.

    The OICCI – the representative body of foreign investors – also suggested bringing illicit trade into tax ambit.

    It said that on the basis of survey conducted by OICCI amongst its members, losses to the government exchequer due to Illicit trade (business in products which are either smuggled, counterfeit, under-invoiced imports, sold by unregistered manufacturer/seller, etc.) is estimated at Rs200 billion (tobacco alone estimated at Rs63 billion only).

    In order to control the Afghan Transit Trade, it recommended:

    Harmonize duty and tax rates to remove the incentive for evasion.

    Fix quantitative limits for imports based on genuine Afghan needs and size of population.

    Establish a basis of collecting duty/taxes at the point of entry into Pakistan for the account of the Afghanistan Government

    Fix import value in consultation with the brand owner in Pakistan.

    Customs procedures and Cross-border rules should be published for transparency.

    Containers coming back from Afghanistan should be checked by customs.

    There should be a negative list of items which are not utilized in Afghanistan; yet are imported and make their way into Pakistan.

    Streamlining of border crossing procedures on financial guarantee by banks and anti‐corruption measures.

    Export to Afghanistan be facilitated with simplified procedure by FBR and border control authorities.

    For stringent controls illicit trade, it recommended:

    Introduce tighter penalties for illicit trade across categories, including criminal liability across the value chain, including retailers, distributors and manufacturers

    Introduce a special division/ task force to raid retailers and manufacturers to confiscate and destroy illicit stocks

    Launch a media campaign to increase awareness in consumers of the harms of illicit products and discourage them from purchasing such products

    The OICCI suggested structural reforms in the customs:

    Do a thorough review of the custom regime, in consultation with brand owners, to address issues of counterfeiting, smuggling, and rationalization of duty structure and fixing of import Tariff prices.

    Custom valuation should be done on modern lines through online search and matching international and regional pricing and taking local legal importers of items on board.

    IPR (Intellectual Property Rights) laws implementation in Pakistan need to be strengthened. Special IPR tribunals may be formed for speedy trials leading towards IPR compliance at par with international standards of IPR enforceability.

    Unauthorized imports of counterfeit products should be effectively checked through registration of brands with the custom authorities in coordination with the original brand owner/ registered in Pakistan.

    Valuation ruling should be issued in consultation with the owner of the brand or its authorized representative.

    The data of import should be public (restrictively) to ensure transparency and this will also help in taking over of goods under section 25A of the Custom Act, 1969.

    Related Stories

    FBR notifies elimination, reduction of regulatory duties on several raw materials; issues SRO

  • SBP issues list of e-branches for obtaining fresh currency notes for Eid-ul-Fitr

    SBP issues list of e-branches for obtaining fresh currency notes for Eid-ul-Fitr

    KARACHI: State Bank of Pakistan (SBP) on Friday issued list of 1,718 e-branches for sending SMS and obtaining fresh currency notes for Eid-ul-Fitr.

    The SBP said that fresh currency notes will be available from designated commercial bank branches called “e-branches” and the sixteen field offices of SBP BSC.

    The booking of the service shall commence from May 19, 2019, while issuance of fresh currency through mobile SMS service will start from May 20 and continue till May 31, 2019.

    The service will be provided through 1702 e-branches & 16 SBP BSC offices in 142 cities across Pakistan to ensure maximum geographical coverage.

    The charges for the service are Rs. 1.50/- plus tax, per SMS.

    The branch IDs of designated e-branches are available at SBP website http://www.sbp.org.pk, PBA website http://www.pakistanbanks.org, commercial banks websites and will also be displayed prominently outside designated e-branches.

    It may be noted that the branch ID for e-branch is different from the existing branch/SWIFT code of banks.

    Under this facility, a person may send an SMS message comprising his/her 13 digits CNIC/Smart card number along with the desired e-branch ID [e.g. 32453-3454432-1(space)KHI001] to short code 8877.

    The list of the banks can be accessed to the link: List of e-branches.

    In return, the person will receive an SMS containing redemption code, e-branch address and the code validity period.

    Redemption code received by the customer will be valid for two (02) working days as per the mentioned dates in the SMS.

    The customer may then approach the concerned e-branch along with his/her original CNIC/Smart card, a photocopy of the CNIC/Smart card and transaction code received from 8877 to obtain fresh currency notes. An individual can obtain three (03) packets of Rs.10/- and one (01) packet each of Rs 50/- & Rs. 100/-.

    It is also notified that each CNIC/Smart card number or mobile phone number can only be used once.

    No transaction code will be issued to the sender in case he/she sends the same CNIC/Smart card number from different mobile numbers or sends different CNIC/Smart card numbers from same mobile number during the service.

    Further, the system shall provide the fresh currency notes on first come first serve basis and new bookings shall be closed once the system reaches its capacity.

  • Hafeez Shaikh approves disaster support fund worth Rs17bn for stock exchange

    Hafeez Shaikh approves disaster support fund worth Rs17bn for stock exchange

    KARACHI: Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue on Friday met members of delegation of stock exchange and approved Rs17 billion amounting disaster support fund.

    According to sources a meeting between stock members delegation consisting of Arif Habib, Aqeel Karim Dhedhi, Basheer Jan Muhammad, and Sulaiman Mehdi with the advisor. The meeting was ended on a positive note today.

    Dr. Hafeez Shaikh approved initiation of “Disaster Support Fund” worth around Rs17 billion rupees which will be managed by NIT where MD NIT Adnan Afridi was called on immediate notice to discuss the execution of the fund.

    The advisor also committed to expedite the Buy Back regulation amendments to support and hold destabilizing stock prices.

    In regard to the current issue of Show Cause notices in relation to short selling, Finance Minister has requested SECP to expedite and clear the ambiguities between the authorities and brokers to bring investor class confidence in the market.

    Besides this, another development states that the same delegation is scheduled to meet Governor State Bank of Pakistan today to discuss and resolve issues in relation to Monetary Policy and Exchange rate affecting the stock market and the economy.