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  • 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.

  • Pakistan announces one month date extension for tax return filing

    Pakistan announces one month date extension for tax return filing

    KARACHI: Pakistan on Monday announced extension in filing of income tax return by one month to November 30, 2022 from existing October 31, 2022.

    Finance Minister Ishaq Dar announced to extend the last date for filing return for tax year 2022.

    The minister said that October 31, 2022 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, 2022.

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

    The Federal Board of Revenue (FBR) has already given date extension from September 30, 2022 to October 31, 2022. It was second date extension for return filing tax year 2022.

    Previously, the FBR extended the date on the complaints from the stakeholders that many errors on the IRIS portals hampered the return filing activities.

    Although, currently many glitches have been addressed on return filing portal yet a large number of calculation errors still challenging the taxpayers.

    Tax experts said that that long march started by PTI chairman, Imran Khan caused political uncertainty which has adversely affected the business activities in Pakistan

    Pakistan Tax Bar Association (PTBA) and Karachi Tax Bar Association (KTBA) in different communications with the FBR chairman urged for the extension in last date because of the error in the IRIS portal.

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

    The experts also said that the IRIS portal is surrounded with many calculation errors which is preventing the taxpayers while filing their income tax returns.

    Therefore, the apex tax body urged the FBR to first remove errors on the portal and then provide statutory time to taxpayers in discharging their national duty.

    The unprecedented flash floods in the country have terribly affected the cash flow of many businesses and receivables of previous fiscal year from several parts of the country.

    The PTBA demanded the tax authorities of providing clear 90 days for return filing from the date when the portal is error free.

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

    The increase in the last date will facilitate the taxpayers and business community at large scale to file income tax return on the error free IRIS portal.

    The PTBA also suggested that timely decision be appreciated by the taxpayers/legal fraternity, who are working very hard day & night by playing their part towards the legal responsibility for contributing towards national exchequer.

    READ MORE: FBR may extend return filing date due to political unrest, floods, IRIS errors

    It will also help in the collection of taxes at the appropriate time.

  • Petroleum prices in Pakistan effective from November 01, 2022

    Petroleum prices in Pakistan effective from November 01, 2022

    ISLAMABAD: The government of Pakistan on Monday decided to keep the petroleum prices unchanged for next fortnight starting from November 01, 2022.

    Finance Minister Ishaq Dar announced the decision to keep the prices unchanged for next 15 days.

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

    It was second straight announcement to keep the prices of petroleum products unchanged. Previously, on September 30, 2022 following changes in petroleum prices were announced:

    READ MORE: Pakistan keeps petroleum prices unchanged from October 16, 2022

    The rate of petrol has been reduced by Rs12.63 per liter to Rs224.80 from Rs237.43.

    The price of high speed diesel has been cut by 12.13 per liter to Rs235.30 from Rs247.43.

    The rate of Kerosene oil has been slashed by Rs10.19 to Rs191.83 from Rs202.02.

    The price of light diesel oil has been reduced by Rs10.78 to Rs186.50 from Rs197.28.

    The government has taken the latest decision amid challenges including long march initiated by leading opposition party and rising benchmark Brent crude rates in international markets.

    READ MORE: Pakistan sharply reduces petroleum prices from October 01, 2022

    The present coalition government led by PML-N is under immense pressure since coming into power in April 2022. This government is mainly criticized for sky rocket prices of all essential items bringing inflation to record levels. The present government had opportunity to attract masses by lowering petroleum prices.

    On the other hand, Imran Khan, Chairman, Pakistan Tehreek I Insaaf (PTI) launched long march on October 28, 2022 from Lahore demanded the present government to announce general election as the country on the brink of default and masses were witnessing the brunt of high prices.

    The present government has annoyed people through its last decision to keep the prices of petroleum products unchanged. Experts had opinion that the government had room to give benefit by slashing the prices.

    The experts believed that now the government would have fewer options to cut the prices of petroleum products due to rising global oil prices and depreciation in currency value at home.

    Benchmark US Brent soared to $95.77 per barrel as of October 28, 2022. The commodity witnessed an increase of over $5 during the month of October 2022.

    Pakistan is the net importer of petroleum products to meet the domestic demands. Oil import bill of the country went up to $4.86 billion during first quarter (July – September) of the current fiscal year as compared with $4.59 billion in the corresponding quarter of the last year.

    READ MORE: Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    On the other hand the rupee once against started depreciation due to political instability and falling foreign exchange reserves. Although, the SBP recently received $1.17 billion from the International Monetary Fund (IMF) to buffer its foreign exchange reserves and support the local currency. Yet the scheduled repayment gradually dry to foreign exchange reserves position.

    Most recently, the SBP again received $1.5 billion from the Asian Development Bank (ADB) to strengthen the foreign exchange reserves position. However, the repayment pressure and rising political noise the rupee unable to show resistance against the dollar.

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

  • Rupee rebounds after Dar holds meetings with banks, exchange companies

    Rupee rebounds after Dar holds meetings with banks, exchange companies

    KARACHI: The Pakistani Rupee (PKR) recovered sharply against the US dollar on Monday following meetings of Finance Minister Ishaq Dar with representatives of banks and exchange companies last week.

    The exchange rate recorded a recovery of PKR 1.58 in rupee value to end at PKR 220.89 to the dollar from last Friday’s closing of PKR 222.47 in the interbank foreign exchange market.

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

    The finance minister on Saturday October 29, 2022 held meetings with representatives of exchange companies and bankers and discussed the exchange rate volatility.

    Finance Minister Ishaq Dar has advised foreign exchange companies to ensure appropriate exchange rate for the betterment of the country.

    The finance minister highlighting the economic situation of the country stated that the present government with its pragmatic policy decisions has not only arrested the decline but has also set the economy in the right direction.

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

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

    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).

    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.

    READ MORE: Rupee slips sharply to dollar on PTI long march

    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.

    The rupee had also seen support by contraction in current account deficit during the first quarter of the current fiscal year.

    Pakistan’s current account deficit has recorded a decline of 37 per cent to $2.21 billion during first quarter (July – September) of fiscal year 2022/2023, according to official data released last week.

    READ MORE: Rupee recovers to PKR 219.73 against dollar

    The current account deficit of the country was $3.53 billion in the same quarter of the last fiscal year.

    Contraction in current account deficit can be attributed to significant fall in trade deficit. The trade deficit also contracted by 21.32 per cent to $9.22 billion during first quarter of the current fiscal year as compared with the deficit of $11.72 billion in the same quarter of the last fiscal year.