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  • ECC approves clearance of banned items landed till August 18, 2022

    ECC approves clearance of banned items landed till August 18, 2022

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the customs clearance of banned items, which landed till August 18, 2022.

    Federal Minister for Finance and Revenue Miftah Ismail virtually presided over the meeting of the ECC. Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmmod, Federal Minister for National Health Services, Regulations and Coordination Abdul Qadir Patel, MNA/ex-PM Shahid Khaqan Abbasi, Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha, Coordinator to the PM on Economy Bilal Azhar Kayani, Chairman NDMA, Chairman FBR, Federal Secretaries and senior officers attended the meeting.

    READ MORE: USC to disburse ration bags worth Rs540 million to flood victims

    The ECC considered a summary of Ministry of Commerce on clearance of stuck up consignments in light of office memorandum dated 22 July, 2022, 19 August, 2022 and 23 August, 2022 issued by Ministry of Commerce.

    The ECC approved the proposal and directed that the consignments of previously banned items that landed in Pakistan till August 18, 2022 may be released at the rate of surcharge.

    Ministry of National Health Services, Regulations and Coordination presented a summary for exemption of Active Pharmaceutical Ingredients (APIs) from Custom Duty and Additional Custom Duty.

    READ MORE: Pakistan State Oil gets Rs30 billion to avoid default

    The ECC after discussion directed Ministry of National Health Services, Regulations and Coordination to withdraw the summary and submit a fresh summary to rationalize price of paracetamol to ensure its availability.

    The summary presented by Ministry of National Food Security and Research regarding import of Wheat through Gwadar sea port was deferred by ECC.

    National Disaster Management Authority (NDMA) presented a summary for allocation of funds for procurement and logistics of relief items for flood affectees and apprised about devastation caused by the recent floods in Pakistan. In order to provide immediate relief to the flood affectees, NDMA started procurement on emergency basis costing Rs. 2.4 billion.

    READ MORE: Pakistan decides to lift ban on imported goods

    Due to colossal damages, the already procured items are not sufficient viz-a-viz relief requirement in the flood affected areas.

    Therefore, NDMA placed orders for procurement of more items at cumulative cost of Rs. 7.113 billion, which are being procured in emergency to provide relief to affectees. Previously, NDMA was allocated Rs. 8 billion for procurement and logistics cost of relief items to the flood affectees.

    READ MORE: 15% surcharge imposed for clearance of banned items

    The amount was insufficient as the cost of only procurement has surpassed Rs. 9.5 billion. Besides procurement, NDMA is also undertaking logistics of all relief goods and materials provided by friendly countries.

    Foregoing in view, the ECC approved allocation of Rs. 10 billion to National Disaster Management Authority (NDMA) with direction to the Finance Division to immediately release Rs. 5 billion to NDMA.

  • Angelina Jolie visits Pakistan to support flood affected communities

    Angelina Jolie visits Pakistan to support flood affected communities

    International humanitarian Angelina Jolie is visiting Pakistan to support communities affected by the devastating floods, according to a statement issued on Wednesday.

    Heavy rains and floods across the country have impacted 33 million people and submerged one third of the country under water.

    Ms Jolie is visiting to witness and gain understanding of the situation, and to hear from people affected directly about their needs, and about steps to prevent such suffering in the future.

    Ms Jolie, who previously visited victims of the 2010 floods in Pakistan, and the 2005 earthquake, will visit the IRC’s emergency response operations and local organisations assisting displaced people including Afghan refugees. 

    Pakistan, which has contributed just 1% of global carbon emissions, is also the second largest host of refugees globally, its people having sheltered Afghan refugees for over forty years.

    Ms Jolie will highlight the need for urgent support for the Pakistani people and long-term solutions to address the multiplying crises of climate change, human displacement and protracted insecurity we are witnessing globally.

    Ms Jolie will see first hand how countries like Pakistan are paying the greatest cost for a crisis they did not cause. The IRC hopes her visit will shed light on this issue and prompt the international community – particularly states contributing the most to carbon emissions – to act and provide urgent support to countries bearing the brunt of the climate crisis.

    Shabnam Baloch, Pakistan Country Director at the IRC said: “The climate crisis is destroying lives and futures in Pakistan, with severe consequences especially for women and children.

    “The resulting economic loss from these floods will likely lead to food insecurity and an increase in violence against women and girls. We need immediate support to reach people in urgent need, and long term investments to stop climate change from destroying our collective futures. With more rains expected in the coming months, we hope Angelina Jolie’s visit will help the world wake up and take action.”

    IRC’s latest needs assessment shows people are in urgent need of food, drinking water, shelter, and healthcare. Every person surveyed reported women and girls have no access to menstrual hygiene products. So far, the IRC has reached more than 50,000 women and girls with humanitarian assistance, including dignity and hygiene kits to address the need for sanitation and menstrual items.

    We have been providing lifesaving services to flood-affected communities in Balochistan, Khyber Pakhtunkhwa and Sindh since early July and have reached almost 950,000 people with emergency supplies, food, healthcare and safe spaces.

  • Outbound passengers to declare currency above $5,000

    Outbound passengers to declare currency above $5,000

    Federal Board of Revenue (FBR) Wednesday issued draft rules to make it mandatory for outbound passengers to make declaration of currency amounting above $5,000.

    The FBR issued draft amendment to Baggage Rules, 2006 by issuing SRO 1751(I)/2022 dated September 20, 2022.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    The revenue body said that the draft rules had been published for information of all persons likely to be affected and notice is also given that objections or suggestions may for consideration of the board should be sent within seven days of the draft amendments.

    According to the amendment, in case of accompanied baggage, the outbound passenger who is in possession of foreign currency exceeding $5,000 of equivalent, any other prohibited or restricted item or any other item requiring declaration before Customs, shall file a declaration before or on departure, electronically in the WeBOC or manually.

    READ MORE: PKR falls for 13th session as dollar ends near record high

    Similarly, the incoming passenger who is in possession of foreign currency exceeding $10,000 or equivalent, any other prohibited or restricted item or any other item requiring declaration before customs shall file a declaration.

    Earlier, on September 11, 2022, the FBR issued a clarification stating that a misleading impression has been created in some section of the press that Pakistan has recently imposed currency declaration requirements for passengers coming into Pakistan, which is contrary to facts. Unlike portrayed by some section of the press, the mandatory requirement for passengers coming into Pakistan and bringing currency and/or negotiable instruments was notified by the State Bank of Pakistan more than 10 years ago vide notification no. F.E.1/2012-SB dated 16th June 2012. This requirement came into force on July 01,2012.

    READ MORE: PKR plunges for 12th session; Dollar ends at PKR 237.91

    Subsequently, in order to widen the scope of declaration to include gold jewelry, precious stones and other prohibited/ restricted goods, Pakistan Customs also introduced a comprehensive “Customs Declaration Form for Passengers” which was notified vide SRO 689(I)/2019 dated 29th June, 2019. These rules cover both the incoming and outgoing passengers.

    These requirements for declaration are in line with international standards and the best practices adopted by most of the countries in the world. The passengers can make the declaration either manually at the Customs counter or electronically in the Customs System. In order to increase awareness amongst the international passengers, Pakistan Customs has been collaborating with the Civil Aviation Authority, Airlines, and Immigration Authorities to improve its outreach for both departing and arriving passengers. As a result, the compliance has been steadily increasing.

    READ MORE: Dollar rallies for 11th straight session; ends PKR 236.84 at interbank

    FBR has further reiterated that the currency declaration regime for all international passengers has been in field for more than a decade, rather than being recently introduced on account of any recent FATF review requirements.

  • Rupee ends near historic low; Dollar gains to PKR 239.65

    Rupee ends near historic low; Dollar gains to PKR 239.65

    KARACHI: Pakistani Rupee (PKR) on Wednesday continued its losing streak for 14th consecutive session against the dollar and ended near to the historic low of PKR 239.65 in the interbank foreign exchange market.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    READ MORE: PKR falls for 13th session as dollar ends near record high

    The exchange rate recorded a decline of 74 paisas to end at PKR 239.64 to the dollar from previous day’s close of PKR 238.91 in the interbank foreign exchange market.

    The local currency has maintained the free-fall for the last 14 sessions. During this period the local currency depreciated by PKR 21.04 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    Currency experts said that mounting dollar demand for imports and corporate payments was pressurizing the local currency.

    READ MORE: PKR plunges for 12th session; Dollar ends at PKR 237.91

    Furthermore, the political uncertainty is also destabilizing the local unit against the greenback.

    The rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    Saudi Fund for Development (SFD) has confirmed rollover of $3 billion deposit maturing on December 05, 2022 for one year. Deposit is placed with SBP and is part of its forex reserves. This reflects continuing strong and special relationship between KSA and Pakistan, according to the SBP.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: Dollar rallies for 11th straight session; ends PKR 236.84 at interbank

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    READ MORE: Rupee devaluation continues; Dollar jumps to PKR 235.88

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • New petroleum prices in Pakistan effective from September 21, 2022

    New petroleum prices in Pakistan effective from September 21, 2022

    Pakistan on Wednesday revised the prices of petroleum products that are effective from September 21, 2022.

    According to a statement issued by the Finance Division, the government decided to increase prices of petrol by Rs1.45 per liter to Rs237.43 from previous rate of Rs235.98.

    READ MORE: New petroleum prices in Pakistan from September 01, 2022

    However, the government kept the price of high speed diesel (HSD) unchanged at Rs247.43 per liter.

    The price of kerosene oil has been reduced by Rs8.30 per liter to Rs202.02 from Rs210.32.

    Similarly, the rate of light diesel oil has been reduced by Rs4.26 per liter to Rs198.28 from previous rate of Rs201.54.

    The finance division said that in the wake of fluctuating global oil prices and exchange rate variation, the government had decided to revise the prices of petroleum products.

    The government review the prices of petroleum products every fortnight. The latest rate revision was scheduled for September 15, 2022 for the period starting from September 16, 2022.

    READ MORE: New petroleum prices in Pakistan from August 16, 2022

    However, the government delayed the review which raises concerns amongst the stakeholders as many believed the government deliberately kept the price at higher side despite significant decline in global oil prices.

    A day earlier, Korangi Association of Trade and Industry (KATI) expressed concern over delay in revision of petroleum prices by the government.

    READ MORE: New petroleum prices in Pakistan from August 1, 2022

    KATI President Salman Aslam expressed concern over the government’s delay in changing the prices of petroleum products.

    He said that there is a trend of continuous decline in oil prices in the global market, and the government should immediately announce a reduction in the price of petrol so that inflation and production costs can be reduced.

    READ MORE: New prices of petroleum products in Pakistan from July 01, 2022

  • FBR advised to fix glitches for smooth filing of income tax returns

    FBR advised to fix glitches for smooth filing of income tax returns

    Pakistan Tax Bar Association (PTBA) has urged the Federal Board of Revenue (FBR) to fix glitches in Iris portal for smooth return filing for tax year 2022.

    In a letter sent to FBR chairman, the PTBA advised that the taxpayers should be provided the statutory period of clear 90 days for submission of their income tax returns from the day the Iris – the portal – is error free.

    READ MORE: Tax Return becomes invalid on depriving refund adjustment: PTBA

    The apex tax bar stated that the matter regarding filing of income tax returns for tax year 2022, it endorsed the observations about system errors / glitches highlighted by the regional affiliated bars, including Karachi Tax Bar Association (KTBA).

    “Till to date the present IT team has failed in providing the efficient, user friendly and hassle free IT system in professional manners,” it added.

    The PTBA informed the FBR chairman that as per law the taxpayer is entitled to claim adjustment of his previous refunds against tax liability for the current tax year but the relevant column for adjustment of refund has illegally been locked, which is against the fundamental rights and present scheme of law under the Income Tax Ordinance, 2001.

    Similarly, the draft of manual return of income for the individuals and Association of Persons (AOPs) for the Tax Year 2022 was issued as late as on August 26, 2022, whereas the final SRO 1733(I)/2022 was issued on September 13, 2022. “It means only 17 days have been allowed to file the manual returns, which is insufficient as provided under the law,” the PTBA pointed out.

    READ MORE: Tax rates on profit from bank deposits during year 2022/2023

    It further pointed out that the income tax return form introduced for SMEs sector has been issued on the IRIS system without sharing a draft, which is mandatory under the law. “The simplified return for SME uploaded without issuing the draft return, the same may lead to illegality,” the PTBA said and suggested that issue draft following by final return should be issued to meet with the requirement of the law.

    The PTBA said that the IRIS portal is calculating incorrect normal as well as initial depreciation allowance on purchase of plant and machinery against the provision of Section 23 read with the Part II of Third Schedule of the Income Tax Ordinance, 2001.

    The IRIS portal is calculating incorrect/excess tax liability on gain on sale of immovable properties in violation of Section 37(1A) of the Income Tax Ordinance, 2001.

    It is noted that rate of tax collection under section 153(I)(c) for individuals and AOPs contractors is 7 per cent, which is minimum tax. “In the relevant part of return for working of attributable income neither there is any row having rate at 7 per cent rate of tax nor the system is allowing credit to the said deduction.

    Presently, IRIS portal is calculating the incorrect tax liability on income covered under Section 153 of the Ordinance, on the basis of fixed/predefined wrong formulas due to which the taxpayers are bound to pay high tax instead of their actual tax liability, which is against the spirit of self-declaration and present scheme of law. “De-freezing of attribution and enabling the taxpayers to enter correct figures/data to filed their return in time may resolve the issue,” the PTBA suggested.

    READ MORE: Up to 70% income tax imposed on dividends for year 2022-2023

    The apex tax bar highlighted that the IRIS portal is calculating incorrect tax at profit/yield Bahbood Certificates / Pensioner’s Benefit Account / Shuhada Family Welfare Account, whereas clause (c) of sub-section (I) of Section 39 provides that tax shall not exceed 10 per cent of such profit/yield read with clause (6) of Part-III of Second Schedule of Income Tax Ordinance, 2001.

    The IRIS portal is treating normal income for the tax year 2022 instead of final income at interest/profit on debts on government securities as per clause (20( of Part III of Second Schedule of the Income Tax Ordinance, 2001, wherever, the said clause was omitted through Finance Act, 2022 and is applicable for the tax year 2023, which cannot be applicable retrospectively.

    READ MORE: FBR updates salary tax card for year 2022-2023

    The PTBA said that the taxpayers in general and legal fraternity in particular are facing acute hurdles in preparation of tax payment challans because response of the system in this regard is dead slow. “Most of the time it requires many attempts for preparation of the tax challan due to website issue and preparation of tax challan in single attempt is difficult and it is very common practice/issue faced by almost every taxpayer while preparing the tax challan, hence the website/system issue should be resolved immediately and sufficient time is also required for timely filing of returns.”

    In cases where revised wealth statement under Section 116(3) of the Income Tax Ordinance, 2001 for the tax year 2021 resulting into change in closing balance of net wealth for the tax year 2021 has been filed, the system does not carry forward opening balance of net wealth for the tax year 2022 (showing the opening balance of original wealth statement of last year’s closing balance).

    Lastly, the PTBA pointed out issue regarding the downloading of computerized payment receipt (CPR) and statement that the system shows message ‘challan/CPR does not exist’ against the valid CPR duly deposited in the national exchequer.

    READ MORE: FBR issues withholding tax rates on imports for tax year 2022-2023

  • SBP issues new instructions on cross border payments

    SBP issues new instructions on cross border payments

    KARACHI: State Bank of Pakistan (SBP) on Tuesday issued new instructions related to cross border payments to bring in line with international best practices.

    The central bank in a circular stated that as per existing practice, the banks provide payment cases related to Asian Clearing Union (ACU), Cash Reserve Requirements (CRR) & Special Cash Reserve Requirements (SCRR) and Deposits/ Withdrawals from Local US Dollar Instrument Collection and Settlement; through SBP, Banking Services Corporation, Karachi Office (SBP BSC – KO).

    READ MORE: PKR falls for 13th session as dollar ends near record high

    Further, the banks also send their queries with regard to above payment cases to SBP BSC – KO for clarification, guidance and advice.

    In order to bring cross border payments in line with international best practices, State Bank of Pakistan (SBP) has re-engineered its business process by centralizing all cross border payments, including above, at the Treasury Operations Department-SBP (TOD-SBP).

    Hence, all banks/ Islamic banks are advised to please ensure compliance of following instructions with effect from October 01, 2022.

    READ MORE: President Alvi bars retrospective effect to profit rates on saving certificates

    All ACU payment cases / letters addressed to Chief Manager “ACU Section” SBP BSC-KO, shall now be submitted to Director, Treasury Operations Department (Director-TOD), SBP, Karachi as per formats attached at annexure ‘A’ & ‘B’.

    All banks’ CRR & SCRR deposits & withdrawal cases / letters (FE25) addressed to Chief Manager “DAD Section” SBP BSC-KO shall now be submitted to Director-TOD as per formats attached at annexures ‘C’ & ‘D’.

    READ MORE: No restriction on imports, SBP clarifies

    All Local US Dollar deposits & withdrawals cases from Instrument Collection & Settlement (FE2) addressed to Chief Manager “DAD Section” SBP BSC-KO shall now be submitted to Director-TOD as per formats attached at annexures ‘E’ & ‘F’.

    Any queries with regard to above payment cases shall now be submitted to Director-TOD for clarification, guidance and advice.

    READ MORE: State Bank suspends two exchange companies

    The contact details of TOD officers and Standard Settlement Instructions (SSIs) of SBP are attached at annexures ‘G’ & ‘H’ for ready reference.

    The SBP issued following annexures related to cross border payments:

    1. Annexure A- Letter for Transfer / Purchase of ACU Dollars
    2. Annexure B- Letter for Repatriation / Surrender of ACU Dollars
    3. Annexure C- Letter for CRR & SCRR Deposit
    4. Annexure D- Letter for CRR & SCRR Withdrawal
    5. Annexure E- Letter for Deposit to Local US Dollar Instrument Collection & Settlement Account
    6. Annexure F- Letter for Withdrawal from Local US Dollar Instrument Collection & Settlement Account
    7. Annexure G- Contact Details of Treasury Operations Department, SBP Karachi.
    8. Annexure H- Standard Settlement Instructions (SSIs) of SBP
  • PKR falls for 13th session as dollar ends near record high

    PKR falls for 13th session as dollar ends near record high

    KARACHI: The Pakistani Rupee (PKR) witnessed the fall for 13th consecutive session on Tuesday as the US dollar ended near record high in interbank foreign exchange market.

    The exchange rate recorded a decline of PKR 1 to end at PKR 238.91 to the dollar from previous day’s closing of PKR 237.91 in interbank foreign exchange market.

    READ MORE: PKR plunges for 12th session; Dollar ends at PKR 237.91

    The local currency recorded a decline of Rs20.31 or 9.34 per cent during the past 13 sessions from Rs218.60 against the dollar on September 01, 2022.

    It is pertinent to mention that the local currency recorded the all-time low of PKR 239.94 on July 28, 2022.

    Currency experts said that mounting dollar demand for imports and corporate payments was pressurizing the local currency.

    READ MORE: Dollar rallies for 11th straight session; ends PKR 236.84 at interbank

    Furthermore, the political uncertainty is also destabilizing the local unit against the greenback.

    The rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    Saudi Fund for Development (SFD) has confirmed rollover of $3 billion deposit maturing on December 05, 2022 for one year. Deposit is placed with SBP and is part of its forex reserves. This reflects continuing strong and special relationship between KSA and Pakistan, according to the SBP.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: Rupee devaluation continues; Dollar jumps to PKR 235.88

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    READ MORE: Pakistani Rupee declines for ninth straight session; Dollar ends at PKR 234.32

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Dollar hits PKR 239 in midday interbank trading

    Dollar hits PKR 239 in midday interbank trading

    KARACHI: US dollar becomes stronger against Pakistani Rupee (PKR) to reach at PKR 238 at midday interbank foreign exchange market on Tuesday.

    The foreign currency continued the gaining momentum of past 12 sessions against the local currency.

    READ MORE: PKR plunges for 12th session; Dollar ends at PKR 237.91

    US dollar made so far another PKR 1.09 to trade at PKR 239 from last closing of PKR 237.91 in the interbank foreign exchange market.

    Currency experts said that the falling foreign exchange reserves and high import payment pressured the local currency.

    They said that usually dollar demand remained higher by end of each quarter due to oil payments and demand from corporate sector.

    READ MORE: Dollar rallies for 11th straight session; ends PKR 236.84 at interbank

    Furthermore, they said that the recent statement of Finance Minister Miftah Ismail regarding lack of inflows from friendly countries also sent disappointments to the currency market.

    It is worth mentioning that the rupee recorded all-time low of Rs239.94 on July 28, 2022.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: Rupee devaluation continues; Dollar jumps to PKR 235.88

    The rupee made some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    READ MORE: Pakistani Rupee declines for ninth straight session; Dollar ends at PKR 234.32

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.