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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:
September 20, 2022
PKR falls for 13th session as dollar ends near record high

KARACHI: The Pakistani Rupee (PKR) witnessed the fall for 13^th 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.

September 20, 2022
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.

September 20, 2022
Tax rates on profit from bank deposits during year 2022/2023

Federal Board of Revenue (FBR) has issued latest tax rates on profit from bank deposits derived during the year 2022/2023.

The FBR issued the withholding tax card for tax year 2023 (July 01, 2022 to June 30, 2023) after amending the Income Tax Ordinance, 2001 through changes brought through Finance Act, 2022.

The FBR collects tax on profit on debt under section 151 of the Income Tax Ordinance, 2001. It issued the rates applicable for both persons on the Active Taxpayers List (ATL) and those who are not on the ATL.

According the latest rates, 15 per cent of the tax is applicable on the persons who are on the ATL and 30 per cent is to be paid by persons not on the ATL while receiving profit on debt falling under clause (a), (b), (c) or (d) of Sub-Section 1 of the Section 151.

The clauses a, b, c and d of the sub-section 1 of section 151 are:

(a) a person pays yield on an account, deposit or a certificate under the National Savings Scheme or Post Office Savings Account;

(b) a banking company or financial institution pays any profit on a debt, being an account or deposit maintained with the company or institution;

(c) the Federal Government, a Provincial Government or a Local Government pays to any person profit on any security other than that referred to in clause (a) issued by such Government or authority; or

(d) a banking company, a financial institution, a company referred to in sub-clauses (i) and (ii) of clause (b) of sub-section (2) of section 80, or a finance society pays any profit on any bond, certificate, debenture, security or instrument of any kind (other than a loan agreement between a borrower and a banking company or a development finance institution) to any person other than financial institution.

The FBR further noted that profit on debt on Sukuk by SPV or a company under sub-section (1A) of Section 151 of Income Tax Ordinance, 2001, the withholding tax rates shall be as follow:

— Company in case of ATL 25 per cent and non-ATL 50 per cent.

— Individual, Association of Person (AOP) return above Rs 1 million the tax rate for ATL shall be 12.5 per cent and in case of non-ATL the tax rate shall be 25 per cent.

— Individual, AOP return below one million rupees the tax rate shall be 10 per cent for ATL and in case of non-ATL the tax rate shall be 20 per cent.

The Sub-Section (1A) of Section 151 of the Income Tax Ordinance, 2001, is:

(1A) Every special purpose vehicle or a company, at the time of making payment of a return on investment in Sukuks to a Sukuk holder shall deduct tax from the gross amount of return on investment at the rate specified in Division IB of Part III of the First Schedule.

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

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

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

September 20, 2022
Last date for return filing will not be extended: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Monday said it will not extend the last date for filing income tax returns beyond September 30, 2022.

The FBR sent SMS to taxpayers advising them to file their return of income for the tax year 2022 at the earliest. “The last date to file return is September 30, 2022, which will not be extended,” it added.

READ MORE: Last date for filing tax return is September 30, FBR reminds

The revenue body recently launched a campaign to motivate people for filing income tax returns. The FBR said: “Like every year before, the FBR launched a comprehensive awareness campaign to maximize its outreach through electronic and print media, urging taxpayers both existing and new, to file Income Tax Returns on time. The last date to file returns is September 30, 2022.”

The FBR issued an alert about the last date stating that last date to file income tax returns will not be extended. “Last date to file income tax returns for individuals and association of persons (AOPs) is September 30, 2022,” the FBR added.

READ MORE: Disclosure of beneficial ownership made mandatory for companies

The revenue body said that income tax returns can be filed through: Tax Asaan APP and FBR website.

It further stated that tax payment is possible through: internet and mobile banking; credit card and ATMs; cash and bank account.

The FBR further urged the taxpayers to file tax returns and avail exemption from 100 per cent increased withholding tax rates.

The tax body highlighted mandatory income tax return filing for persons and corporate entities.

The FBR said that all resident persons registered with professional bodies, i.e. chamber of commerce, Pakistan Bar Council or Market Committee etc. are required to file income tax returns.

READ MORE: KTBA highlights pharmaceutical industry’s reporting issues

Association of persons and Individuals having more than Rs400,000 annual business income are also required to file their return of income on annual basis.

“The income tax return filing is must for salaried persons if annual income exceeds Rs600,000,” the FBR added.

The revenue body said that the income tax return filing for tax year 2022 is also mandatory for persons who were charged to income tax in tax years 2020 and Tax Tear 2021.

Furthermore following persons are required to file income tax return:

— Persons having National Tax Number (NTN)

— Persons who own a motor vehicle having engine capacity more than 1,000CC

— Persons who own 500 sq. yards or more property / flat in urban areas.

READ MORE: FBR directs speedy clearance of flood relief goods

— Owners of flat with 2,000 sq. feed covered area of 500 sq. yards or more land in FBR rating area.

— All Non for Profit Organizations (NPOs) or welfare organizations that fall under Income Tax Ordinance, 2001.

— Commercial and Industrial consumers paying more than Rs500,000 electricity bill annually.

— Resident persons required to file foreign income and assets statement.

September 19, 2022
PKR plunges for 12th session; Dollar ends at PKR 237.91

KARACHI: Pakistani Rupee (PKR) plunged for 12th consecutive session against the dollar on Monday to end at PKR 237.91 in the interbank foreign exchange market.

The exchange rate witnessed a decline of PKR 1.07 in rupee value to end at PKR 237.91 as compared with last Friday’s closing of PKR 236.84 in the interbank foreign exchange market.

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

The local currency recorded a decline of Rs19.31 or 8.83 per cent during the past 12 sessions from Rs218.60 against the dollar on September 01, 2022.

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

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

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

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

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

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

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: Dollar surges to PKR 233.50 in midday interbank on September 14, 2022

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.

September 19, 2022
OGDCL discovers gas deposits at Kohat District

KARACHI: Oil and Gas Development Company Limited (OGDCL) on Monday announced discovery of gas deposits at district Kohat in the province of Khyber Pakhtunkhwa.

The company sent a communication to the Pakistan Stock Exchange (PSX) stated that the TAL Joint Venture comprising MOL Pakistan Oil & Gas Co. B. V. (Operator), OGDCL (30 per cent working interst exploratory phase), Pakistan Petroleum Limited (PP), Pakistan Oilfields Limited (POL) and Government Holdings Private limited (GHPL) had discovered gas condensate from Lockhart formation in Tolanj West-2 development well located in district Kohat, Khyber Pakhtunkhwa Province.

READ MORE: Latest petroleum prices in Pakistan

It said that the well was spudded-in on April 10, 2022 to produce Hydrocarbon from already discovered horizon of Tolanj West D&PL i.e. Lumshiwal Formation and to test Hydrocarbon potential of Lockhart & Shinwari & Samanasuk Formations (as exploratory targets). The well has been successfully drilled down to depth of 4119.34m TVD.

READ MORE: Techaccess Pakistan hosts session on in power sector cybersecurity

Based on interpretation results of wireline logs data, Lockhart Formation (Exploratory Target) was tested successfully at rate of around 8.3 Million Standard Cubic Feet Per Day (MMSCFD) gas and 34 barrels per day (BPD) of condensate at choke size 32/64” at Wellhead Flowing Pressure (WHFP) of 1285 Pounds per Square Inch (Psi).

READ MORE: Lucky Cement installs 25.3 MW solar energy plant at Karachi

“The new discovery has de-risked further exploration play in TAL Block, leading to new upside opportunities,” OGDCL said, adding that the said discovery will also help and contributed towards improving energy security of the country from indigenous resources and add to the hydrocarbon reserve base of the company, its joint venture partners and the country.

READ MORE: Mari Petroleum stops production from Zarghun, Bolan fields

September 19, 2022
Dollar surges to PKR 238 at midday interbank

KARACHI: The US dollar surged to Pakistani Rupee (PKR) at 238 at midday interbank foreign exchange market on Monday.

The foreign currency started the week to continue the gaining momentum of past 11 sessions against the local currency.

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

US dollar made so far another PKR 1.16 to trade at PKR 238 from last Friday’s closing of PKR 236.84 in the interbank foreign exchange market.

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

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

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

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.

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

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

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.

READ MORE: Dollar surges to PKR 233.50 in midday interbank on September 14, 2022

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.

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.

September 19, 2022
President Alvi bars retrospective effect to profit rates on saving certificates

ISLAMABAD: The President of Pakistan Dr. Arif Alvi, while rejecting the retrospective effect of government decision, has directed the authorities to pay profit rate on saving certificates on prevailing rates.

While accepting a representation of an aggrieved citizen against a decision of the Wafaqi Mohtasib, President Dr Arif Alvi has directed the Central Directorate of National Savings (CDNS) to pay profit on the Special Saving Certificates (SSCs) as per the profit rate prevailing at the time of purchasing the certificates.

READ MORE: President Alvi directs State Life Insurance to pay compensation

He said that CDNS had committed maladministration by revising the profit rates retrospectively and in contrary to the existing law, thus causing the citizen a loss of Rs 5.3 million.

The President issued these directions while deciding on a representation preferred by Ms Yasmeen Merchant, who had purchased six SSCs from CDNS on 01.11.2019 at a profit rate of 12.7 per cent for five certificates and 13.9 per cent profit rate for the sixth certificate.

READ MORE: President Alvi rejects Habib Bank plea, orders to pay victims

Four days later on 05.11.2019, however, Finance Division issued a notification reducing the profit rates from 12.7 per cent to 11 per cent and 13.9 per cent to 11.8 per cent with retrospective effect from 01.11.2019, causing her a loss of Rs 5.3 million.

The President accepted her representation and held that the complainant was entitled to the profit rate prevailing on the date of issuance of certificates and that the change made through the notification did not apply to her investment in retrospective and, therefore, it could not affect her duly earned right of profit nor it can nullify it to her disadvantage.

READ MORE: HBL ordered to compensate bank fraud victim

He said that the notification issued was in the nature of subordinate or delegated legislation and took effect from the date of its publication in the official Gazette and not from any prior date.

The President added that the rationale behind it was that only the Parliament/legislative bodies could enact a law from a date prior to its enactment i.e., retrospectively and the Government by itself, unless authorized by the statute, had no such authority or power to issue a notification operative from a date different from the date of its publication in the official Gazette.

READ MORE: FBR directed to bring entire sugar supply chain into tax net

The President further highlighted that a person may feel allured by the incentives floated by the Government and act upon it, and it did not behove the Government to recant on its commitment as it may erode the confidence of the general public in the government bodies and may also negatively affect the credibility of the Government.

He further stated that such law was based on settled legal principles and Quranic injunctions as per the 1st verse of Surah Al-Maida “O ye who believe! Fulfil your undertakings”.

The President held that it was not only logical, fair and just to fulfil promises, undertakings and agreements but was also a universally accepted norm. He further declared that both sides were bound by the commitments made at the time of issuance of certificates and directed CDNS to pay the profit as per the promised profit rates of 12.7 per cent and 13.9 per cent on the purchased certificates.

As per details, the citizen’s grievance was that she had purchased the SSCs because of the prevailing profit rate whereas the notification gave retrospective effect to the profit rates and was issued after investment to her disadvantage.

She approached CDNS and later the Wafaqi Mohtasib for redressal of her grievance but to no avail. She then filed a representation with the President, which he accepted.

September 18, 2022
PTA warns internet users of death punishment for blasphemy

The Pakistan Telecommunication Authority (PTA) issued a stern warning on Sunday, cautioning internet users of severe penalties, including death, for blasphemy.
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September 18, 2022