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  • Pakistan car imports surge by 108pc as restriction eases

    Pakistan car imports surge by 108pc as restriction eases

    Car imports into Pakistan have surged by 108 per cent Month on Month (MoM) in October 2022 owing to ease in restrictions by the government.

    The import of motor cars in Completely Built Unit (CBU) into Pakistan increased to $2.70 million in October 2022 as compared with $1.3 million in previous month i.e. September 2022, according to Pakistan Bureau of Statistics (PBS).

    READ MORE: Hyderabad Customs auctions NDP vehicles on November 24, 2022

    The increase in import of CBU cars may be attributed to relaxation in import condition by the government. A complete ban was imposed in May 2022 on import of luxury and non-essential items. However, this ban was relaxed on August 20, 2022.

    However, there are still some restrictions on the import which resulted in 90 per cent to $27.83 million in October 2021 when compared with the latest number of October 2022.

    READ MORE: Hyundai launch N Vision 74 Concept car

    Cumulatively, the import of CBU cars plunged by 81 per cent to $23.72 million in first four months (July – October) of current fiscal year 2022-2023 as compared with $123.53 million in the corresponding period of the last fiscal year.

    Total import of CBU vehicles recorded a decline of over 58 per cent to $89.66 million in first four months of the current fiscal year as compared with $216 million in the corresponding months of the last fiscal year.

    READ MORE: Toyota reveal bZ Compact SUV Concept model

    The import of motor cars in Completely Knocked Down (CKD) recorded an increase of 12.47 per cent to $103.47 million in October 2022 when compared with $92 million in September 2022. It decreased by 8 per cent when compared with $112.32 million in October 2021.

    Cumulatively, the import of CKD cars recorded a decline of 31.55 per cent to $355.74 million during first four months of the current fiscal year when compared with $520 million in the corresponding months of the last fiscal year.

    Overall import of CKD vehicles fell by 33.51 per cent to $507 million during the period under review when compared with $762 million in the same period of the last year.

  • Pakistan to make payment without delay, no risk of default: Ishaq Dar

    Pakistan to make payment without delay, no risk of default: Ishaq Dar

    ISLAMABAD: Finance Minister Ishaq Dar on Saturday reiterated that Pakistan will make all its foreign payments without delay and it will never default.

    Dar strongly rejected the baseless and irresponsible statements and rumors about the country’s economy, saying that the government had arranged all international payments for the next one year.

    READ MORE: Pakistan reaffirms commitment to complete IMF program

    The finance minister said that for the past few days, baseless and irresponsible rumors had been circulating about the country’s economy just for the political objectives.

    When these rumors were spread through social media and various sources, it not only affected Pakistan’s economy and economic interests, but also impacted the affairs and transactions with their bilateral and multilateral partners, he opined.

    READ MORE: Pakistan textile exports decline by 11pc amid global economic slowdown

    The finance minister said that rumors were being spread that Pakistan would not be able to pay $1 billion sovereign bond (sukuk) in December. “This is baseless and contrary to facts, Pakistan has never defaulted on its international payments and will never come close to it,” he maintained.

    Rumors are also being spread about Pakistan’s credit default swap, he said, adding that they had their own ambitions and formula with regard to credit default swap, this was a baseless thing and the speculations in this regard should be stopped.

    Dar said that rumors were making rounds about the petroleum products which were also fake.

    Pakistan has reserves of petroleum products according to the country’s need and demand and there is no need for worry, he added.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    Apart from disturbing the public, such rumors also created concern in the financial and international institutions and they sent questions, which not only harmed the efforts for economic interests but also wasted time, he further said.

    Ishaq Dar said that there were still rumors about the current account deficit. The current accounts are being closely monitored, professionally managed and well managed, he told and added that the current account deficit was $316 million in September, which was expected to be $400 million in October.

    READ MORE: Pakistan organizes first international housing expo next month

    “That is, by the end of the financial year, the current account deficit is likely to be 5 to 6 billion dollars, while the target of this deficit for the current financial year is 12 billion dollars. The current account deficit is expected to remain below target,” he added.

    The Finance Minister said that in the light of these facts, he appealed to all Pakistanis not to pay heed to any kind of rumors, as they accorded top priority to Pakistan and for the country’s economy, they needed to work beyond political affiliations.

  • Pakistan textile exports decline by 11pc amid global economic slowdown

    Pakistan textile exports decline by 11pc amid global economic slowdown

    KARACHI: Pakistan textile exports registered a decline of over 11 per cent Month on Month (MoM) basis in October 2022 to $1.36 billion due to global economic slowdown.

    “This is the lowest number since May 2021,” said Shameer Alam Zaidi, analyst at Ismail Iqbal Securities. He said the effect of global economic slowdown and high inventory levels held with retailers is now becoming more visible.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    The fall in export value has mainly come from volumetric decline as prices of almost all categories have either increased or stayed flat. This has taken fiscal year to date exports into negative territory with 1.4 per cent decline in first four months (July – October) of fiscal year 2022-2023.

    Among value added items, bedwear has witnessed the largest decline of 19 per cent (on MoM basis), down to $217 million. Knitwear has remained on the downward path in October 2022 and declined by 10 per cent to $392 million. Among non value added items, cotton yarn has shown the largest decline of 35 per cent.

    READ MORE: Pakistan organizes first international housing expo next month

    The textile machinery imports have maintained a downward trend and are down by 21 per cent MoM to $42 million as against last 12 month average of $57 million. Raw cotton import is up 9 per cent on MoM basis, where the quantity is up 15 per cent. The cumulative import of raw cotton in first four months of the current fiscal year is up by 4.7 per cent, however the quantity imported is down by 11 per cent, which shows that the industry has not yet covered for the shortage of local cotton crop due to floods.

    The realized price of imported cotton has been recorded at $2.8 per kilogram as against 2.4/kg and 3/kg in October 2021 and September 2022, respectively.

    READ MORE: APTMA urges PM to save textile industry from total closure

    The analyst said that the textile exports are expected to remain under pressure due to lack of new orders amid global economic slowdown and high inventory levels held by US retailers.

    On domestic front, amid winter season the gas supply to textile industry has decreased as consumers are government’s first priority. “This has forced the industry to switch towards grid which is likely to hurt Sindh based exporters as the province enjoys significant lower gas rates compared to Punjab,” he added.

    READ MORE: Reducing foreign currency cash carrying limits to half criticized

  • Pakistan establishes directorate to detect nuclear material at customs stations

    Pakistan establishes directorate to detect nuclear material at customs stations

    ISLAMABAD: Pakistan has established a directorate for detection of nuclear material and radiation at customs stations.

    In this regard Federal Board of Revenue (FBR) issued SRO 2047(I)/2022 to notify functions, jurisdiction and powers of the Directorate General of National Nuclear Detection Architecture (NNDA).

    READ MORE: FBR gathers dual nationality information of customs officials

    The Directorate-General of NNDA shall be responsible for enforcement of all the international agreements, treaties, conventions, domestic laws, rules and procedures relating to radiation and nuclear material detection with reference to cross border movement of persons and international or bi-lateral cargo through sea, land border stations and airports and domestic laws, rules and procedures relating to inland movement of cargo and persons, through the respective Directorates.

    READ MORE: Sales tax return lacuna traps taxpayers: FBR offices issue show cause notices

    The Directorate-General of NNDA shall also supervise functioning of the Directorates, furnish policy input to the Board on matters relating to designing and implementation of the nuclear detection architecture and maintain liaison with all stakeholders.

    The Directorate-General of NNDA shall be based at Islamabad, headed by the Director General, assisted by two Deputy Directors General one each at Islamabad and Karachi and the Director (HQ), Islamabad.

    READ MORE: Baggage rules amended for lowering cash limit for outbound passengers

    The Directorate-General of NNDA shall have its regional offices at Karachi, Lahore, Peshawar and Quetta. The Director General shall report to the Chairman, Federal Board of Revenue, Islamabad.

    All Directorates of the DirectorateGeneral of NNDA shall be headed by a Director and shall be assisted by Additional Directors, Deputy Directors, Assistant Directors, Supervisors, Assistant Supervisors, Radio Portal Monitor (RPM) Operators, Radio Portal Monitor (RPM) Technicians, or officers with any other designation and officials of Customs, as are required.

    READ MORE: FBR halts POS prize scheme

    The concerned officers and officials of the Directorate-General of NNDA shall exercise the respective powers of the appropriate officer conferred under the Act and rules made thereunder for discharge of the functions and duties specified in this Notification.

  • Pakistan reaffirms commitment to complete IMF program

    Pakistan reaffirms commitment to complete IMF program

    ISLAMABAD: Pakistan on Thursday reaffirmed commitment to complete the loan program under International Monetary Fund (IMF).

    The resolve has been expressed at an online meeting of Finance Minister Ishaq Dar with Nathan Porter, IMF Mission Chief for Pakistan.

    The two sides discussed the progress made with the ongoing IMF program, particularly the impact of floods on macroeconomic framework and targets for the current year.

    IMF indicated its willingness to sympathetically view the targeted assistance for poor and vulnerable, especially flood affectees.

    It was agreed that expenditure estimates for flood related humanitarian assistance during the current year will be firmed up alongwith estimates of priority rehabilitation expenditure.

    In this regard engagement at the technical level shall be expeditiously concluded for proceeding with the 9th Review. Finance Minister Senator Ishaq Dar reiterated GOP’s commitment to successfully completing the IMF program.

  • Sales tax return lacuna traps taxpayers: FBR offices issue show cause notices

    Sales tax return lacuna traps taxpayers: FBR offices issue show cause notices

    KARACHI: Taxpayers have not been provided to declare exempt purchases in sales tax return form at IRIS, which resulted in issuance of huge number of show cause notices regarding apportionment of input tax in relation to taxable and exempt sales in the return.

    Karachi Tax Bar Association (KTBA) on Thursday highlighted this important issue by sending a letter to the chairman of Federal Board of Revenue (FBR).

    READ MORE: Baggage rules amended for lowering cash limit for outbound passengers

    KTBA President Syed Rehan Hasan Jafri through this communication apprised the FBR chairman that a large number of show cause notices had been issued by field offices in Karachi in respect with apportionment of input tax in relation to taxable and exempt sales in the return.

    Bar members have complained that the notices were issued without any application of mind or any desk audit of the cases.

    Jafri said that as per Sales Tax Rules, 2006 only common input tax is required to be apportioned between taxable and exempt sales. Therefore, before issuance of a show-cause notice it is mandatory to have a basic understanding of the business about its taxability or exemption of the goods being supplied by taxpayer. “The current notices are directly being confronted to the taxpayers through a show-cause notice that they have not apportioned their input tax.”

    READ MORE: FBR halts POS prize scheme

    These show-cause notices contain a table wherein, on the basis ratio of exempt sales to total amount of sales, an amount of disallowance of input is computed.

    This entire action is being done without appreciating the law that as per Rule 25(1) input tax directly attributable to taxable sales is completely allowable and only common input tax is required to be apportioned.

    Even otherwise, the application of apportionment has to be within strict parameters defined under Rule 25(3) of the ST Rules, which allows apportionment of residual input tax only.

    The definition of ‘residual input tax’ envisages the concept of apportionment of input tax suffered on ‘raw material, ‘component’ and ‘capital goods’.

    The FBR chairman has been urged to directed field offices to ascertain the nature of business of the taxpayers first and then conduct desk audit and only thereafter, if there remains a need for it, before issuance of a show-cause notice, the information may be requested from the concerned taxpayers. “A show cause should be issued only once after any discrepancy is identified,” according to the letter.

    READ MORE: Tax on persons receiving dividends in Pakistan

    Since the field officers have already issued the notices and asking for apportioning the input tax on exempt sales vis-à-vis total value of sales, but they are not inclined to accept that exempt sales are made from exempt purchases from the unregistered persons, even in the presence of substantiating evidence.

    It may be assumed that the officers had taken the position because such purchases are not reported in the sales tax returns while on the contrary the sales tax returns on IRIS do not any have option to report exempt purchases made from unregistered persons. “Therefore, it is practically not possible for a taxpayer to report exempt purchases from the unregistered persons.”

    READ MORE: Direct tax collection up 41% in four months of current fiscal year: FBR

    The KTBA requested the FBR chairman to direct the field offices to: consider exempt purchases made by taxpayers from unregistered persons and not to apportion input tax in respect of such exempt sales; and sales tax return may be updated to provide for reporting of exempt purchases from unregistered persons.

  • Rupee devaluation continues; dollar reaches PKR 222.67

    Rupee devaluation continues; dollar reaches PKR 222.67

    KARACHI: Pakistani Rupee (PKR) continued its devaluation for fifth consecutive day on Thursday as the US dollar reaches at PKR 222.67 in the interbank foreign exchange market.

    The exchange rate recorded a decline of 26 paisas in rupee value to end at PKR 222.67 to the dollar from previous day’s closing of PKR 222.41 in the interbank foreign exchange market.

    READ MORE: Dollar climbs to PKR 222.41 amid foreign payment demand

    The local currency witnessed a non-stop fall against the dollar during the past five sessions.

    Currency experts said uncertainty about IMF meeting pressured the exchange rate. Furthermore, a sharp surge in the credit default swap of 5-year bond of the country also adversely affected the market sentiments.

    They said that falling foreign exchange reserves in these conditions further aggravated the situation.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, according to the State Bank of Pakistan (SBP).

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    READ MORE: Dollar end up to PKR 221.91 in interbank on November 15, 2022

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    READ MORE: Dollar extends gain to PKR amid falling foreign exchange reserves

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

  • Action against banks for overcharging on LCs by month-end

    Action against banks for overcharging on LCs by month-end

    ISLAMABAD: State Bank of Pakistan (SBP) on Wednesday said it has finalized to take action against banks involved in overcharging on opening of Letters of Credit (LCs).

    The National Assembly Standing Committee on Finance and Revenue was informed here on Wednesday that the actions against eight banks involved in overcharging on opening of LC would be taken by the end of current month.

    READ MORE: Dollar climbs to PKR 222.41 amid foreign payment demand

    While briefing the Committee, Deputy Governor State Bank of Pakistan (SBP), Dr. Inayat Hussain said that in light of inspection findings, SBP is also in process of completing the enforcement action against the concerned banks.

    The Committee met under the Chairmanship of Qaiser Ahmed Sheikh and discussed various issues pertaining to the Ministry and its attached departments.

    The Chairman of the Committee said that now the monitoring process of the Central Bank has been tightened and no complaints have been received yet.

    READ MORE: SBP introduces reporting system for illegal foreign exchange activity

    Inayat said the shortage of dollars in the market is due to the gap between import and export and foreign exchange is also required for balance of payment.

    He highlighted that the shortage occurs when Dollar inflow is less than the outflow. These are the reasons for the increase in the rate of the Dollar and the depreciation of the rupee, he added.

    MNA Sabir Hussain Kaim Khani said that National Bank of Pakistan (NBP) was also responsible for the devaluation of the rupee and increase in the rate of Dollar. He questioned how will we stop others when a government bank does this.

    The Chairman of the Committee said that Banks were still saying that they don’t have Dollars and market confidence was affected due to fluctuations in the value of the rupee.

    READ MORE: Pakistan remittances decline by 15.7% in October 2022

    Dollar is worth Rs 222 in the market and there is a difference of 15 rupees in the interbank and open market, he added.

    Governor State Bank should should come to respond to this, Barjees Tahir said.

    MNA Khalid Hussain Magsi said that now the economy was not in right direction because we have not set the direction.

    Meanwhile discussing the issue of allocation of funds to National Disaster Management Authority (NDMA) and essential items provided to the floods affectees, the official of NDMA informed that the authority disbursed around 283,934 tents, 77,585 tarpaulins, 2,044,104 mosquito nets, 234,545 blankets.

    MNA Nafisa Shah said that according to her information, around 4 to 5 thousand children were died of Malaria in Khairpur district but there was no data available on flood victims. She said that things were given twice in each house and compiling data of flood victims was the biggest responsibility.

    READ MORE: Pakistan banks may issue corporate cards for cross-border commercial payments

    Zarai Taraqiati Bank Limited (ZTBL) briefed the Committee on its overall performance, however the Committee was not satisfied with the briefing and allowed three months’ time asking it to come again with better preparation.

    The Committee also asked ZTBL President to ensure his presence in the next meeting.

  • Dollar climbs to PKR 222.41 amid foreign payment demand

    Dollar climbs to PKR 222.41 amid foreign payment demand

    KARACHI: The US dollar rallied against the Pakistani Rupee (PKR) on Wednesday amid escalating demand of the foreign currency for import and corporate payments.

    The exchange rate witnessed a decline of 50 paisas in rupee value to end at PKR 222.41 to the dollar from previous day’s closing of PKR 221.91 in the interbank foreign exchange market.

    It was fourth consecutive session when the rupee witnessed a decline against the dollar.

    READ MORE: Dollar end up to PKR 221.91 in interbank on November 15, 2022

    Currency experts said that the local currency was under immense pressure due to high demand of the foreign currency for import and corporate payments.

    They further said that declining foreign exchange reserves also put pressure on exchange rate.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.

    READ MORE: Dollar extends gain to PKR amid falling foreign exchange reserves

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    READ MORE: Rupee makes recovery as limit imposed on dollar cash movement

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

  • Baggage rules amended for lowering cash limit for outbound passengers

    Baggage rules amended for lowering cash limit for outbound passengers

    KARACHI: Federal Board of Revenue (FBR) on Wednesday notified draft rules to amend Baggage Rules for lowering cash limit for outbound passengers.

    The FBR issued SRO 2043(I)/2022 to make amendments in the Baggage Rules, 2006. The cash limit has been lowered to $5,000 per person per visit from $10,000.

    READ MORE: SBP limits cash up to USD 5,000 taking out of Pakistan

    According to the proposed rules, any persons travelling abroad (except to Afghanistan) is allowed to take out of Pakistan US Dollar or equivalent thereof in other foreign currencies as per the limits given below:

    The cash limit per visit per person shall be $5,000 for a person 18 years and above (adults). The annual limit per person shall be $30,000.

    The cash limit per visit per person shall be $2,500 for a person below 18 years (minors). The annual limit per person shall be $15,000.

    READ MORE: FBR halts POS prize scheme

    The FBR further said that foreign currency cash limit for passengers travelling to Afghanistan will be: maximum limit per person per visit shall be $1,000. The annual limit per person shall be $6,000.

    The FBR introduced further amendments to the Baggage Rules, according to which the annual limits for outbound passengers for the respective countries will be as per Tables ‘A’ and ‘B’ for a calendar year starting from the year 2023.

    However, for calendar year 2022, the existing annual limits in vogue before the issuance of this notification will continue to be effective till December 31, 2022.

    READ MORE: Tax on persons receiving dividends in Pakistan

    Any person taking foreign currency or any other prohibited or restricted item out of Pakistan shall file a declaration in the tbiin as set out in Appendix-C, before or at the time of departure, electronically in the WeBOC or pass track or manually at the airport.

    The incoming passenger when in possession of foreign currency exceeding US $ 10,000 or equivalent, or any other prohibited or restricted item, shall also file a declaration in the Form as set out in Appendix-C.”; and (3) in Appendix “C”, for the DECLARATION, the following shall be substituted, namely:-

    “DECLARATION

    Are you carrying any of the following goods?

    (a) Prohibited or restricted goods such as arms & ammunitions, narcotics, psychotropic substances or satellite phones etc.?

    (b) Gold and precious metals, jewelry, precious or semi-precious stones.

    READ MORE: Direct tax collection up 41% in four months of current fiscal year: FBR

    (c) Foreign currency in US $/ Bearer Negotiable Instrument or equivalent:

    1. For outbound passengers to all countries taking out foreign currencies; and

    2. Incoming passengers bringing into Pakistan amount exceeding US $ 10,000 or equivalent.

    Any other items requiring declaration before Customs.

    “I declare that t e information furnished by me is correct and in the event of its being incorrect, I hold myself liable for such action as deemed fit under the Foreign Exchange Regulation Act, 1947 and the Customs Act, 1969.” – Signature of the Passenger