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KARACHI: The current account deficit (CAD) of Pakistan has massively widened to $15.19 billion during 11 months (July – May) of 2021/2022, State Bank of Pakistan (SBP) said Tuesday.
The data of balance of payment (BoP) showed the current account deficit was $1.18 billion in the corresponding months of the last fiscal year.
The massive widening in current account deficit may be attributed to the high trade deficit on back of significant increase in import bill.
The trade deficit of the country increased by 58.18 per cent to $43.42 billion during July – May 2021/2022 as compared with $27.45 billion in the corresponding period of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS).
The import bill of the country surged by 44.51 per cent to $72.29 billion during first 11 months of the current fiscal year as compared with $50 billion in the same months of the last fiscal year.
However, export earnings of also grew by 28 per cent to $28.87 billion during the period under review as compared with $22.57 billion in the same period of the last fiscal year.
Meanwhile, inflows of workers remittances posted a six per cent growth to $28.41 billion during 11 months of the current fiscal year as compared with $26.73 billion in the corresponding months of the last fiscal year.
The current account deficit for the month of May 2022 also widened to $1.425 billion as compared with the deficit of $618 million in April 2022 and the deficit of $640 million in May 2021.
KARACHI: The Pakistan Rupee (PKR) made sharp recovery of Rs1.07 against the dollar on Tuesday amid expectation of $2 billion inflows from the International Monetary Fund (IMF).
The exchange rate ended at Rs206.87 to the dollar from previous day’s closing of Rs207.94 in the interbank foreign exchange market.
Prime Minister Shehbaz Sharif earlier in the day said that a significant amount was expected from the IMF.
“Miftah Ismail [the finance minister] sent a message this morning saying that Pakistan will receive not $1 billion but $2 billion from the IMF. I told him in response, Alhamdulillah, but our ultimate goal is self-reliance,” the prime minister said.
The prime minister announced shortly after Ismail confirmed Pakistan had received the Memorandum of Economic and Financial Policies (MEFP) from the IMF for the seventh and eighth reviews.
The rupee was remained under pressure due to high import payments and falling foreign exchange reserves. Recently, Pakistan received about $2.3 billion from China.
The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.
The official foreign exchange reserves of State Bank of Pakistan (SBP) have decreased around 32-month low at $8.238 billion by week ended June 17, 2022. The official reserves of the central bank fell by $747 million to $8.238 billion by week ended June 17, 2022 as compared with $8.985 billion by week ended June 10, 2022.
Previously, the foreign exchange reserves of the SBP were seen on November 01, 2019 when those were at $8.358 billion.
Considering the current official reserves of the State Bank at $8.238 billion, the import cover is only for 1.21 months.
The central bank attributed the decline in foreign exchange reserves for external debt repayments. However, SBP reserves are expected to increase in coming days on realization of proceeds of China Development Bank (CDB) loan.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.91 billion by week ended June 17, 2022 from touching the peak on August 27, 2021.
The total foreign exchange reserves of Pakistan have declined to around three-year low at $14.21 billion by week ended June 17, 2022. Previously, the foreign exchange reserves of the country were seen at $14.259 billion by week ended July 5, 2019. The country’s foreign exchange reserves have fallen by $733 million to $14.21 billion by week ended June 17, 2022 as compared with $14.943 billion a week ago i.e. June 10, 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 $13.018 billion.
The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.
The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.
Recently the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.
KARACHI: The prize bonds of various denominations issued by the government of Pakistan are expiring on June 30, 2022.
So far no decision came from the finance ministry to extend the last date for exchanging bearer prize bonds. The federal government has already extended the last date for converting or exchanging the bearer prize bonds up to June 30, 2022.
The State Bank of Pakistan (SBP) issued a circular on March 30, 2022 to extend the date up to June 30, 2022 for exchanging or converting the bearer prize bonds including denominations of Rs40,000/- Rs25,000/-, Rs15,000/- and Rs7,500.
Earlier, the last date for exchanging the bearer prize bonds was March 31, 2022.
The SBP instructed the banks to accept requests for encashment / conversion / redemption of cited denominations from general public till June 30, 2022.
“Further, the banks shall submit branch / region wise consolidated data of cited denomination national prize bonds held by them on last date i.e. June 30, 2022 latest by July 04, 2022, as per the instructions stipulated in aforementioned CMD Circulars.
The finance ministry launched the withdrawal of the unregistered prize bonds in a phased manner. The federal government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds. Similarly, on December 10, 2020, the government announced to discontinue the circulation of Rs25,000 denomination prize bonds. In April 2021, the finance ministry announced that national prize bonds of denominations Rs7,500 and Rs15,000 shall not be sold.
Since June 2019 the government repeatedly extended the date for exchanging the bearer bonds. Previously, the last date for exchanging the unregistered bonds was December 31, 2021.
The government is aiming to document the bearer bonds so the exchanging the unregistered bond with cash has been prohibited. The ministry of finance issued various procedure to convert the bond without exchanging with the cash.
The bonds can be converted to premium prize bonds (registered) of denomination of Rs25,000 and Rs40,000 (subject to the adjustment of differential amount) through 16 field offices of State Bank of Pakistan (SBP) Banking Services Corporation (BSC), and branches of six commercial banks i.e. National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited, and Bank Alfalah Limited.
The bonds can be replaced with Special Saving Certificates/Defence Saving Certificates through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks, and the National Savings Center.
The bonds will only be encashed by transferring the proceeds to the bonds holder’s bank account through the 16 field offices of SBP BSC as well as the authorized commercial bank branches and to the Saving Accounts at National Savings Centers.
KARACHI: The Pakistan Rupee (PKR) fell 46 paisas against the US dollar on Monday despite inflows received from China.
The exchange rate recorded a decline of 46 paisas to end at Rs207.94 to the dollar from last Friday’s closing of Rs207.48 in the interbank foreign exchange market.
Currency experts said that the rupee was remained under pressure due to higher dollar demand for import payments. They said that despite inflows from China the local currency failed to make recovery.
The country received about $2.3 billion from China about two days ago.
The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.
The official foreign exchange reserves of State Bank of Pakistan (SBP) have decreased around 32-month low at $8.238 billion by week ended June 17, 2022. The official reserves of the central bank fell by $747 million to $8.238 billion by week ended June 17, 2022 as compared with $8.985 billion by week ended June 10, 2022.
Previously, the foreign exchange reserves of the SBP were seen on November 01, 2019 when those were at $8.358 billion.
Considering the current official reserves of the State Bank at $8.238 billion, the import cover is only for 1.21 months.
The central bank attributed the decline in foreign exchange reserves for external debt repayments. However, SBP reserves are expected to increase in coming days on realization of proceeds of China Development Bank (CDB) loan.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.91 billion by week ended June 17, 2022 from touching the peak on August 27, 2021.
The total foreign exchange reserves of Pakistan have declined to around three-year low at $14.21 billion by week ended June 17, 2022. Previously, the foreign exchange reserves of the country were seen at $14.259 billion by week ended July 5, 2019. The country’s foreign exchange reserves have fallen by $733 million to $14.21 billion by week ended June 17, 2022 as compared with $14.943 billion a week ago i.e. June 10, 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 $13.018 billion.
The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.
The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.
Recently the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.
KARACHI: The State Bank of Pakistan (SBP) on Saturday said it had approached Shariat Appelate Bench of the Supreme Court for guidance on decision of Federal Shariat Court in Riba case.
In a statement the central bank said the SBP welcomes the Federal Shariat Court’s Judgement of April 28, 2022 on Riba case, as has already been done by the Honorable Finance Minister. In particular, we appreciate the substantive part of the decision.
As the prime custodian and regulator of the financial and monetary framework of the Islamic Republic of Pakistan, SBP is deeply committed to ensuring compliance with the injunctions of Islam, in particular those pertaining to riba, while protecting the stability and security of the financial sector of the country that functions as part of the global financial system.
In this context, SBP has always remained at the forefront in promoting Islamic banking in the country. SBP is among the few regulators across the globe where comprehensive legal, regulatory and Shariah Governance frameworks have been successfully developed and implemented.
Currently, 22 Islamic Banking Institutions (5 full- fledged Islamic banks and 17 conventional banks having standalone Islamic banking branches) with a branch network of 3,983 branches along with 1,418 Islamic banking windows (Islamic banking counters at conventional branches) are operational across the country. The industry now accounts for 19.4 percent of the country’s overall banking system in terms of assets while in terms of deposits the share is 20 percent (as of March 31, 2022).
In addition, SBP has also been taking measures to bring the legal and regulatory infrastructure in compliance with Shariah principles.
After detailed review of the judgment and based upon the advice of our Chief Legal Adviser and external counsel, we have sought guidance from the honorable Shariat Appelate Bench of the Supreme Court in terms of its implementation and practicalities involved.
ISLAMABAD: The salaried class in Pakistan is in shock over the recent changes announced by the government and revert its decision to exempt income of salaried persons up to Rs1.2 million.
The government on June 10, 2022 presented the federal budget 2022/2023 announced major tax relief for salaried class by enhancing threshold from Rs600,000 to Rs1.2 million. Besides, the government also proposed to reduce the number of income slabs.
Through the Finance Bill, 2022 the government on June 10, 2022 proposed the following rates of tax on salary income:
Salary income slabs and tax rates proposed through Finance Bill, 2022:
S#
Taxable Income
Rate of Tax
(1)
(2)
(3)
1.
Where taxable income does not exceed Rs. 600,000
0
2.
Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000
Rs. 100
3.
Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000
7% of the amount exceeding Rs. 1,200,000
4.
Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000
Rs. 84,000 + 12.5% of the amount exceeding Rs. 2,400,000
5.
Where taxable income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000
Rs. 234,000 + 17.5% of the amount exceeding Rs. 3,600,000
6.
Where taxable income exceeds Rs. 6,000,000 but does not exceed Rs. 12,000,000
Rs. 654,000 + 22.5% of the amount exceeding Rs. 6,000,000
7.
Where taxable income exceeds Rs. 12,000,000
Rs. 2,004,000 + 32.5% of the amount exceeding Rs. 12,000,000.”
However, the government has taken a big U-turn and now proposed amendment to the Finance Bill, 2022 and decided to withdraw the exempt income threshold.
As per sources the government has proposed revision in salary tax rates for tax year 2023 effective from July 01, 2022. The following is the proposed rates for next tax year:
01. Where taxable income tax does not exceed Rs600,000: the tax rate should be zero.
02. Where taxable income exceeds Rs600,000 but does not exceed Rs1,200,000: the tax rate should be 2.5 per cent of the amount exceeding Rs1,200,000.
03. Where taxable income exceed Rs1,200,000 but does not exceed Rs2,400,000: the tax rate should be Rs15,000 + 12.5 per cent of the amount exceeding Rs1,200,000.
04. Where taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000: The tax rate should be Rs165,000 + 20% of the amount exceeding Rs2,400,000.
05. Where taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000: the tax rate should be Rs405,000 + 25 per cent of the amount exceeding Rs3,600,000.
06. Where taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000: the tax rate should be Rs1,005,000 + 32.5 per cent of the amount exceeding Rs6,000,000.
07. Where taxable income exceeds Rs12,000,000: the tax rate should eb Rs2,955,000 + 35 per cent of the amount exceeding Rs12,000,000.
The existing rate of income tax on the salary persons for tax year 2022 (July 01, 2021 – June 30, 2022) is as follow:
(2) Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—
1. Where taxable income does not exceed Rs. 600,000: 0%
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: 5% of the amount exceeding Rs. 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000
4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
5. Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000: Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
7. Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000: Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
8. Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000: Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
9. Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000: Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10. Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000: Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11. Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000: Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs. 75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000.
ISLAMABAD: Pakistan on Friday introduced a fixed tax regime for jewelers and decided to impose the fixed tax on gold shops measures a certain area.
Finance Minister Miftah Ismail while addressing on the floor of the house, stated that only twenty two gold shops out of thirty thousand are registered.
“A fixed tax will be levied on the gold shops measuring up to three hundred square feet whilst sales tax on big jewellery shops has been reduced from seventeen to three percent,” the finance minister said.
He further said withholding tax on sale of jewellery has been reduced to one percent from the current four percent.
Ismail said a fixed tax will also be imposed on car dealers, restaurants and those constructing houses. He said the tax has been imposed on income and not consumption. Therefore, these measures will not cause inflation.
The minister said that the government has decided to levy super tax on the affluent class to reduce budget deficit in order to end reliance on foreign assistance and take the country towards economic sovereignty.
Winding up discussion on the budget for the next fiscal year, he said individuals and companies earning 150 million rupees will have to pay one percent additional tax, two percent additional tax on 200 million rupees income, three percent on 250 million rupees income and four percent additional tax on 300 million rupees income. He said this tax will be for a period of one year.
The Minister for Finance said that thirteen high earning sectors including oil and gas, cigarettes, cement, LNG terminals have also been identified for imposition of ten percent super tax on income of three hundred million rupees. He clarified that this will be one time tax.
Miftah Ismail said that there are nine million retail shops and it has been decided to bring 2.5 million of them to the tax net.
The Minister said after incorporating various suggestions and measures the tax revenue target has increased to 7470 billion rupees for the next fiscal year. He said 4373 billion rupees will be distributed to provinces as their share.
The Finance Minister said that the government has tried to reduce burden on the weak segments of the society. He said that sugar, flour and ghee will be provided to the people at subsidized rates throughout the year at the Utility Stores. He informed the House that one million people have so far registered to avail Sasta Petrol and Sasta Diesel scheme.
The Minister also announced incentives for different sectors. He said the condition of withholding tax and statement for IT companies with the revenue of less than eighty million rupees will be exempted. He said a tax being charged from Oil Marketing Companies at the rate of 0.75 percent has been brought back to 0.5 percent. He said Overseas Pakistanis having NICOP card will be included in the active tax payers’ list. He said income on the plots of the families of martyrs and war injured has been exempted from tax. He said relief has also been given to leather and surgical goods.
The Finance Minister said the government has safe the country from default and know the country will be taken towards development. He said the previous government took an unprecedented loan of twenty-thousand billion rupees in four years. He questioned how a country can remain economically sovereign by taking huge loan that is why we have to revive the stalled IMF program. He said difficult decisions were taken in the national interest after consultations with all the allied parties. He said given the current account deficit which will remain 17.50 billion dollars, we have to agree to the IMF recommendations to safe the country from default.
Miftah Ismail said that this is the most pro-farmer budget ever presented in the last two decades. He said this farmer friendly budget will accrue long term benefits for the country and help bolster agri-products, besides achieving self-sufficiency in edible oil, wheat and other crops.
Talking about recommendations made by the Senate, he said most of the suggestion of the Upper House has been incorporated. He said Senate’s recommendations on pharmaceutical goods will be entertained in the next budget.
ISLAMABAD: Pakistan on Friday imposed a 10 per cent super tax on earnings of certain industrial sectors and on income of high net worth individuals.
Prime Minister Shehbaz Sharif announced to impose the 10 percent super tax on over 12 large industries and also on affluent persons with more than Rs 150 million annual income with a rate up to four percent.
Addressing the members of his economic team, he said the imposed taxes would be the “first step towards the country’s financial self-reliance”.
The prime minister said the 10 percent tax aimed at poverty alleviation would be imposed on industries and sectors including cement, fertilizers, steel, sugar, textile, oil and gas, LNG terminals, banking sector, cigarette, chemicals and beverages.
He said the individuals earning over Rs 150 million a year would pay one percent tax; those earning Rs 200 million will pay two percent, those over Rs 250 million income to pay three percent and the ones earning above Rs 300 million will pay four percent tax.
The prime minister said he had formed teams to boost tax collection with the help of organs of State institutions and through digital means.
The prime minister hoped that with hard work and faith in Allah Almighty, the things would ease up.
The measures taken in the budget will enable the poor overcome their financial challenges, he added.
PM Sharif said the history was evident that the poor always sacrificed while facing challenges, but now it was the moral obligation upon the affluent to come forward and contribute.
He expressed confidence that the measures would take Pakistan forward on the path of prosperity, progress and economic stability.
KARACHI: The official foreign exchange reserves of State Bank of Pakistan (SBP) have decreased around 32-month low at $8.238 billion by week ended June 17, 2022, official data revealed on Thursday.
The official reserves of the central bank fell by $747 million to $8.238 billion by week ended June 17, 2022 as compared with $8.985 billion by week ended June 10, 2022.
Previously, the foreign exchange reserves of the SBP were seen on November 01, 2019 when those were at $8.358 billion.
Considering the current official reserves of the State Bank at $8.238 billion, the import cover is only for 1.21 months.
The central bank attributed the decline in foreign exchange reserves for external debt repayments. However, SBP reserves are expected to increase in coming days on realization of proceeds of China Development Bank (CDB) loan, 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 touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.91 billion by week ended June 17, 2022 from touching the peak on August 27, 2021.
The country is facing serious balance of payment crisis during the past many months. The foreign exchange reserves of the central bank have seen a constant decline.
The falling foreign exchange reserves also put pressure on the local currency. The Pakistani Rupee (PKR) is also depreciating to record low against the US dollar on daily basis.
The total foreign exchange reserves of Pakistan have declined to around three-year low at $14.21 billion by week ended June 17, 2022. Previously, the foreign exchange reserves of the country were seen at $14.259 billion by week ended July 5, 2019.
The country’s foreign exchange reserves have fallen by $733 million to $14.21 billion by week ended June 17, 2022 as compared with $14.943 billion a week ago i.e. June 10, 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 $13.018 billion.
The foreign exchange held by commercial banks however slightly up by $14 million to $5.972 billion by week ended June 17, 2022 as compared with $5.958 billion a week ago.
KARACHI: The US dollar retreated against the Pakistan Rupee (PKR) on Thursday after the country entered in a deal of $2.3 billion, which is likely to be transferred in a day.
The rupee gained Rs4.70 to end at Rs207.23 to the dollar from previous day’s closing at Rs211.93 in interbank foreign exchange market.
The rupee made the latest record low of Rs211.93 on June 22, 2022.
Currency experts said that Pakistan would get an amount of $2.3 billion as the country and Chinese consortium banks finalized an agreement in this regard.
Besides, the market also responded positively to expected deal between Pakistan and the IMF as the government authorities had agreed to many tough conditions, including revision of the federal budget targets.
They said that the foreign exchange reserves had declined to critically low, which created panic in the market. Besides, high oil prices and rise in commodity prices globally also pushed dollar demand for import payments.
According to data released by the State Bank of Pakistan (SBP) a day earlier, the official reserves of the central bank had declined to provide about one month import cover.
The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $241 million to $8.985 billion by week ended June 10, 2022 as compared with $9.226 billion a week ago i.e. June 03, 2022.
The present level of the SBP’s reserves showed that the central bank has import cover for around only one months.
Pakistan’s import bill for the month of May 2022 recorded at $6.777 billion, according to Pakistan Bureau of Statistics (PBS).
The latest foreign exchange reserves of the SBP showed it fell around 2½ years low. Previously, the foreign exchange reserves held by the central bank were seen at $9.233 billion on December 6, 2019.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021.
Since touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.16 billion by week ended June 10, 2022 from touching the peak on August 27, 2021.
The country is facing serious balance of payment crisis during the past many months. The foreign exchange reserves of the central bank have seen a constant decline.
The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.
The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.
Recently the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.
