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  • Pakistan budget deficit widens by 43% in first quarter of 2022-2023

    Pakistan budget deficit widens by 43% in first quarter of 2022-2023

    ISLAMABAD: Pakistan budget deficit has widened by 43 per cent in the first quarter (July – September) of current fiscal year 2022-2023, according to official data released by the ministry of finance on Friday.

    The budget deficit of the country was 1 per cent of the GDP during the first quarter of the current fiscal year as compared with the deficit of 0.7 per cent in the corresponding quarter of the preceding fiscal year.

    READ MORE: Pakistan FX reserves rise to $14.69 billion after ADB transfer

    According to data the total revenue increased to Rs2.02 trillion during the quarter under review as compared with Rs1.81 trillion in the same quarter of the last year.

    The tax revenue rose to Rs1.78 trillion during July – September of the current fiscal year as compared with Rs1.53 trillion in the same period of the last year.

    READ MORE: Pakistan’s import restrictions help narrowing trade deficit by 27%

    Non-tax revenue however fell to Rs235 billion during the first quarter of the current fiscal year when compared with Rs276 billion in the same period of the last fiscal year.

    During the period under review expenditures of the country rose significantly to Rs2.83 trillion as compared with Rs2.25 trillion in the corresponding period of the last fiscal year.

    Out of total expenditures, the current expenditures grew sharply to Rs2.54 trillion during first quarter of the current fiscal year as compared with Rs1.97 trillion in the same quarter of the last fiscal year. The mark-up payment during the quarter under review also surged to Rs954 billion when compared with Rs623 billion in the corresponding quarter of the last year.

    READ MORE: Threshold of letter of credit payment increased to $100,000

    Defence spending increased to Rs313 billion during the first quarter of the current fiscal year as compared with Rs262 billion in the same period of the last fiscal year.

    The present government spent an amount of Rs220 billion on development projects during the quarter under review, which fell from Rs265 billion in the corresponding quarter of the last year.

    READ MORE: Headline inflation surges by 26.6% in October 2022

    Overall budget deficit recorded at Rs809 billion during the first quarter of fiscal year 2022-2023 when compared with the deficit of Rs438 billion in the same quarter of the last fiscal year.

    The size of GDP has been recorded at Rs78.197 trillion in July – September of the current fiscal year as compared with Rs66.95 trillion in the same period of the last fiscal year.

  • Pakistan should ban trade in cash dollars: forex association

    Pakistan should ban trade in cash dollars: forex association

    KARACHI: The government should immediately ban trade in cash dollars to prevent depreciation in Pakistani Rupee (PKR), forex association demanded on Thursday.

    Exchange Companies Association of Pakistan (ECAP) in a statement claimed that an amount of around $2 billion transferred to Afghanistan which was pressurizing the foreign exchange reserves of Pakistan.

    READ MORE: Dollar extends gain to reach PKR 221.95 in interbank

    “The government should enforce trade with Afghanistan through banking channels,” ECAP Chairman Malik Bostan said.

    The Afghan government issued a circular last month allowing exchange Pakistani currency with Afghani currency or other foreign currencies.

    “There are trillions of Pakistani rupees with the Afghanis and they are exchanging with the foreign currencies,” Bostan said, adding that he already had informed authorities in Pakistan that it would put pressure on the local currency.

    Furthermore, Pakistan government had an agreement of coal purchase worth $ 2 billion with the Afghan traders. Under this agreement Pakistan is importing 22,000 tons of coal worth $6 million on a daily basis.

    READ MORE: Dollar gains 78 paisas to end PKR 221.43 in interbank

    “The Taliban government assured that Afghan traders will export coal in Pakistani rupee. But in contrast Afghan traders were demanding dollars or UAE Dirham. This is creating black marketing of dollars in the local market,” Bostan added.

    He said that in a meeting with Finance Minister Ishaq Dar, the exchange companies were asked to sale dollars on the market rates. “Due to this restrictions, people were selling dollars in black market,” Bostan added.

    He further added that due to this illegal trade the business of exchange companies drastically declined by 80 per cent since September 2022. “Prior to this, exchange companies were making transactions of about 10-15 million dollars on a daily basis. But now it reduced to only 2-4 million dollars.”

    READ MORE: Rupee rebounds after Dar holds meetings with banks, exchange companies

    Bostan said that only one per cent people are visiting exchange companies to sell dollars and 200 per cent increase in those people who are visiting to purchase the foreign currency.

    He informed the State Bank of Pakistan (SBP) had imposed restrictions on the exchange companies that the inflows under workers remittances should be surrendered 100 per cent in the interbank market.

    READ MORE: Rupee crashes to dollar as PTI long march starts

    The exchange companies demanded that the central bank should allow sale of 50 per cent of the inward remittances to the real customers, which would ease dollar demand. “The SBP however allowed the exchange companies the sale of 20 per cent of inward remittances to customers,” Bostan said.

    Besides, the exchange companies demanded the government of reducing travelling expenses limit to $5000 from existing $10,000.

  • Pakistan FX reserves rise to $14.69 billion after ADB transfer

    Pakistan FX reserves rise to $14.69 billion after ADB transfer

    KARACHI: Pakistan foreign exchange reserves have increased by $1.527 billion to $14.69 billion by week ended October 28, 2022 after transfer of funds from Asian Development Bank (ADB).

    The country’s foreign exchange reserves increased to $14.689 billion by week ended October 28, 2022 as compared with $13.162 billion a week ago i.e. October 21, 2022, State Bank of Pakistan (SBP) said on Thursday.

    READ MORE: SBP’s weekly forex reserves dip by $157 million to $7.44 billion

    The ADB released the fund amounting $1.5 billion to Pakistan on October 26, 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 $12.539 billion.

    The official foreign exchange reserves of the State Bank also increased by $1.473 billion to $8.913 billion by week ended October 28, 2022 when compared with $7.44 billion a week ago.

    READ MORE: Pakistan’s weekly forex reserves increase nominally

    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 $11.233 billion.

    READ MORE: Pakistan’s forex reserves continue to fall; deplete to $13.25 billion

    Previously, the central bank received $1.16 billion from the International Monetary Fund (IMF) under Extended Fund Facility (EFF) program, which increased the official reserves to $8.8 billion. But scheduled repayment gradually depleted the official reserves of the central bank.

    READ MORE: Pakistan’s forex reserves decline to $13.59 billion

    The foreign exchange held by commercial banks witnessed an increase of $44 million to $5.766 billion by week ended October 28, 2022 as against $5.722 billion a week ago.

  • Dollar extends gain to reach PKR 221.95 in interbank

    Dollar extends gain to reach PKR 221.95 in interbank

    KARACHI: The US dollar extended gain against the Pakistani Rupee (PKR) on Thursday to end at PKR 221.95 in interbank foreign exchange market.

    The exchange rate recorded a decline of 52 paisas in rupee value to end at PKR 221.95 against the dollar from previous day’s closing of PKR 221.43 in the interbank foreign exchange market.

    READ MORE: Dollar gains 78 paisas to end PKR 221.43 in interbank

    Currency experts said that the dollar witnessed appreciation globally following a sharp rise in treasury yields after the Federal Reserve signaled the interest rates would likely spike.

    The Fed a day earlier raised its benchmark funds rate by 75 basis points to 3.75-4 per cent as widely expected.

    During the last week the rupee witnessed massive deterioration against the dollar after the PTI chief announced the protest rally.

    READ MORE: Rupee rebounds after Dar holds meetings with banks, exchange companies

    PTI Chief Imran Khan was removed as prime minister through a vote of no confidence by the allied political parties in April this year. Imran Khan claimed that his government was toppled by a conspiracy.

    Prior to the announcement of the long march, the rupee witnessed recovery against the greenback due to removal of Pakistan name from the grey list of the Financial Action Task Force (FATF).

    READ MORE: Rupee crashes to dollar as PTI long march starts

    Further, the sentiments were also improved due to commitment of Asian Development Bank (ADB) to finance the country. The ADB approved a financing of $1.5 billion to the country. Currency experts said that the approval of loan program by the ADB helped the rupee to make gain.

    Interestingly, the amount of $1.5 billion was received last night by the State Bank of Pakistan (SBP). However, the fund transfer also failed to support the local currency.

    READ MORE: Dollar climbs to PKR 221.50 on rising political tension

  • Pakistan’s import restrictions help narrowing trade deficit by 27%

    Pakistan’s import restrictions help narrowing trade deficit by 27%

    ISLAMABAD: Import restrictions imposed by Pakistan resulted in massive 27 per cent contractions in trade deficit during first four months (July – October) 2022/2023, according to official data released on Wednesday.

    The trade deficit narrowed to $11.47 billion during first four months of the current fiscal year as compared with the deficit of $15.62 billion in the corresponding months of the last fiscal year, Pakistan Bureau of Statistics (PBS) said.

    READ MORE: Pakistan import bill falls by 12.72% in 1QFY23

    The trade deficit contraction is largely sharp decrease in import bill of the country during the period under review. Import payment of the country were at $21.02 billion during July – October 2022/2023 as compared with $25.08 billion in the same period of the last fiscal year.

    The fall in import bill may be attributed to restrictions imposed by the government regarding opening of letter of credit. Recently, Finance Minister Ishaq Dar had announced to increase the threshold payment for LCs from $50,000 to $100,000. Industry sources said that due to scarcity of dollars in the market, most of the banks were not opening LCs for import payments.

    READ MORE: Pakistan trade deficit narrows by 17% in 2MFY23

    Exports of the country, however, grew with a small margin during the period. The exports recorded increase to $9.55 billion during first four months of the current fiscal year as compared with $9.46 billion in the same months of the last fiscal year.

    The trade deficit recorded a contraction of 42 per cent in the month of October 2022 when compared with same month of the last year. The trade deficit fell to $2.26 billion in October 2022 when compared with the deficit of $3.9 billion in the same month of the last year.

    READ MORE: Pakistan’s trade deficit narrows by 18% in July 2022

    The import bill plummeted by 27 per cent to $4.63 billion in the month of October 2022 when compared with $6.37 billion in the same month of the last year.

    On the other hand, exports also fell by 3.77 per cent to $2.37 billion in the month under review as compared with $2.46 billion in the corresponding month of the last year.

    READ MORE: Pakistan’s import bill records over $80 bn in 2021/2022

  • Final chance to encash bearer prize bonds: SBP

    Final chance to encash bearer prize bonds: SBP

    KARACHI: The final chance has been given to public to exchange or encash bearer prize bonds with various denominations by June 30, 2023.

    The State Bank of Pakistan (SBP) in a statement on Wednesday said that the federal government had given another opportunity to the public to get the withdrawn prize bonds of Rs.7500, 15,000, 25,000 and Rs. 40,000 redeemed/encashed by June 30, 2023.

    READ MORE: Pakistan-issued prize bonds expire on June 30, 2022

    Earlier, the government had fixed deadline of June 30, 2022, for redemption/encashment of these prize bonds, however, considering that some of the prize bond holders could not get their bonds redeemed a final opportunity has been given for encashment of prize bonds till June 30, 2023.

    READ MORE: SBP directs banks to accept bearer prize bonds

    The investors of aforesaid prize bonds have following options of encashment or exchange: Encashment at Face Value; Conversion to Premium Prize Bonds of Rs. 25,000 and/or Rs. 40,000 (Registered); Replacement with Special Savings Certificates (SSC) or Defense Savings Certificates (DSC).

    READ MORE: Prize bond (bearer) holders given 3 months to document

    The prize bonds can be redeemed from SBP Banking Services Corporation office and branches of commercial banks across the country till 30th June 2023. The SBP has issued necessary instructions to commercial banks to accept requests from general public for encashment or exchange of the prize bonds till the extended date.

    READ MORE: History of Prize Bonds in Pakistan

    The members of general public holding these are encouraged to avail this final opportunity and get their prize bonds redeemed before June 30, 2023. These prize bonds shall not be en-cashable or exchangeable after the expiry of the extended deadline, thereby rendering them worthless.

  • Petroleum sales decrease by 22% in four months of 2022-2023

    Petroleum sales decrease by 22% in four months of 2022-2023

    KARACHI: Sales of petroleum products have decreased by 22 per cent during first four months (July – October) of fiscal year 2022-2023, according to data released by Oil Companies Advisory Council (OCAC) on Tuesday.

    The date showed the sales of petroleum products fell to 6.15 million tons during first four months of the current fiscal year as compared with 7.85 million tons in the corresponding months of the last year.

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    Petrol sales fell by 18 per cent to 2.54 million tons during July – October 2022 as compared with 3.11 million tons in the same period last year.

    A massive decline of 26 per cent in sales of high speed diesel (HSD) has been seen during the period under review. The sales of HSD plummeted to 2.17 million tons during first four months of the current fiscal year as compared with 2.93 million tons in the same period of the last year. Similarly, furnace oil sales recorded a decline of 26 per cent to 1.19 million tons as compared with 1.60 million tons.

    READ MORE: OGDCL announces huge oil discovery at Attock

    Analysts at Arif Habib Limited said that total petroleum sales settled at 1.66 million tons in October 2022, depicting a decline of 17 per cent Year on Year (YoY) due to higher petroleum prices, lower FO-based power generation, and a plunge in automobile sales.

    Motor spirit (MS) witnessed a fall of 11 per cent YoY, to settle at 0.68 million tons in October 2022. Similarly, High Speed Diesel (HSD) volumes shrunk by 15 per cent YoY, to arrive at 0.71 million in October 2022. Whereas, Furnace Oil (FO) sales volumes plummeted by 37 per cent YoY in October 2022, to clock in at 0.20 million tons.

    Meanwhile, petroleum offtake showcased a MoM growth of 9 per cent during October 2022 amid mobility across the country post floods, commencement of sowing for Rabi season, and a decrease in MS and HSD prices.

    READ MORE: Electricity withholding tax not applicable on ATL domestic consumers

    Volumes of MS and HSD reported a jump of 8 per cent and 37 per cent MoM, respectively. However, FO sales dropped by 33 per cent MoM in October 2022.

    Company-wise analysis depicts that PSO’s offtake displayed a decline of 18 per cent YoY in October 2022 which was majorly contributed by a plunge in sales of MS, HSD and FO by 18 per cent, 11 per cent and 43 per cent YoY, respectively.

    READ MORE: Petroleum prices in Pakistan effective from November 01, 2022

    Similarly, sales of APL and SHEL plummeted by 16 per cent and 21 per cent YoY, respectively due to fall in sales of MS and HSD. Whereas, HASCOL reported a growth of 46 per cent YoY given higher MS and HSD sales.

  • FBR issues circular to relax income tax return filing deadline

    FBR issues circular to relax income tax return filing deadline

    ISLAMABAD: Federal Board of Revenue (FBR) has issued a circular to relax the return filing deadline up to November 30, 2022.

    The FBR issued Circular No. 17 of 2022 to extend the last date for filing income tax returns for tax year 2022 up to November 30, 2022 from October 31, 2022.

    It is second date extension for return filing for tax year 2022 granted by the FBR. Previously, the revenue body issued Circular No. 16 2022 last month to grant extension in date for filing income tax return to October 31, 2022 from September 30, 2022.

    READ MORE: PTBA seeks clear 90 days for return filing after making portal error free

    The latest date extension has been granted in view of current flood situation in the country and requests from various trade bodies and tax bars.

    With the fresh date extension, taxpayers including salaried persons, business individuals, association of persons (AOPs) and companies other than having account year July to June would able to file the return of income.

    The corporate entities having financial year between July 01 to June 30 are required to file their income tax returns by December 31 every year.

    The FBR through SRO 978(I)/2022 dated June 30, 2022 issued income tax return form for tax year 2022 giving statutory time to taxpayers for making compliance in filing of return.

    READ MORE: KCCI demands one month date extension for return filing

    Section 14 of Income Tax Ordinance, 2001, highlighted the categories of taxpayers, who are required to file their annual return of income and wealth statement.

    According to Income Tax Ordinance, 2001, following class of taxpayers are required to file return of income:

    — every company

    — every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year

    — any non-profit organization as defined in clause (36) of section 2;

    — every person whose income for the year is subject to final taxation under any provision of this Ordinance

    Any person not covered by above clauses are also required to file return of income who,—

    (i) has been charged to tax in respect of any of the two preceding tax years;

    (ii) claims a loss carried forward under this Ordinance for a tax year;

    READ MORE: Calculating property valuation uphill task in completing tax return: Rehan Jafri

    (iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

    (iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

    (v) owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) owns a motor vehicle having engine capacity above 1000 CC;

    (vii) has obtained National Tax Number; or

    (viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

    (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

    (x) is a resident person being an individual required to file foreign income and assets statement under section 116A.

    The FBR said that filing of income tax return is also mandatory for persons or classes of persons notified by the Board with the approval of the Minister in-charge.

    READ MORE: Withholding tax rates on immovable property transactions during 2022-2023

    It further said that return of income is also mandatory for every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

  • Headline inflation surges by 26.6% in October 2022

    Headline inflation surges by 26.6% in October 2022

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) registered an increase of 26.6 per cent in the month of October 2022, according to data released by Pakistan Bureau of Statistics (PBS) on Tuesday.

    The details showed that CPI inflation general increased to 26.6 per cent on a year-on-year basis in October 2022 as compared to an increase of 23.2 per cent in the previous month and 9.2 per cent in October 2021. On a month-on-month basis, it increased to 4.7 per cent in October 2022 as compared to a decrease of 1.2 per cent in the previous month and an increase of 1.9 per cent in October 2021.

    READ MORE: Pakistan’s headline inflation rises 23.2% in September 2022

    CPI inflation Urban, increased to 24.6 per cent on year-on-year basis in October 2022 as compared to an increase of 21.2 per cent in the previous month and 9.6 per cent in October 2021. On month-on-month basis, it increased to 4.5 per cent in October 2022 as compared to a decrease of 2.1 per cent in the previous month and an increase of 1.7 per cent in October 2021.

    CPI inflation Rural, increased to 29.5 per cent on year-on-year basis in October 2022 as compared to an increase of 26.1 per cent in the previous month and 8.7 per cent in October 2021. On month-on-month basis, it increased to 5.0 per cent in October 2022 as compared to an increase of 0.2 per cent in the previous month and an increase of 2.2 per cent in October 2021.

    READ MORE: Pakistan’s headline inflation hits 47-year high in August 2022

    Sensitive Price Indicator (SPI) inflation on YoY increased to 24.0 per cent in October 2022 as compared to an increase of 28.6 per cent a month earlier and an increase of 15.3 per cent in October 2021. On MoM basis, it decreased by 1.5 per cent in October 2022 as compared to a decrease of 1.4 per cent a month earlier and an increase of 2.1 per cent in October 2021.

    READ MORE: Pakistan inflation hits 14-year high at 25% in July

    Wholesale Price Index (WPI) inflation on YoY basis increased to 32.6 per cent in October 2022 as compared to an increase of 38.9 per cent a month earlier and an increase of 21.2 per cent in October 2021. On MoM basis, it decreased by 0.5 per cent in October 2022 as compared to an increase of 1.4 per cent a month earlier and an increase of 4.2 per cent in corresponding month i.e. October 2021.

    READ MORE: Pakistan inflation crosses 33% on high petroleum prices

  • Threshold of letter of credit payment increased to $100,000

    Threshold of letter of credit payment increased to $100,000

    ISLAMABAD: The government has increased payment threshold of letter of credits from present $50,000 to $100,000, Finance Minister Ishaq Dar said on Monday.

    Briefing media here on Monday, Minister for Finance Senator Ishaq Dar announced the government’s decision to increase the threshold of letters of credits (LCs) payments from $50,000 to $100,000.

    With respect to pending cases of LCs, Ishaq Dar said that last month there were about 8,000 pending payments of LCs, out of which 4,400 cases of up to $50,000 had already been cleared while now after the government’s decision of increasing the threshold up to $100,000, 1,365 more cases would be cleared.

    “I met with the Governor Sate Bank of Pakistan (SBP) in Karachi on Sunday, and with the consent of SBP, the government has approved increase of the threshold up to $100,000”, he added.

    He said the decision would be implemented from November 1, 2022.

    The government has also decided to keep the prices of petroleum products unchanged for first half of November 2022 besides extending the last date for filing of tax returns.

    “The government has decided to keep the prices of Petrol, High Speed Diesel, Light Diesel, and Kerosene Oil unchanged for for next 15 days”, Ishaq Dar said.

    Further the minister said that today [October 31] was the last date for filing income tax returns, however on the request of representations of tax bar association and the business community, the government has decided to extend the date for one month up to November 30.