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Pakistan allows release of banned items stuck up at ports

ISLAMABAD: Pakistan Tuesday allowed one-time release of consignment carrying imported goods that were banned by the government on May 19, 2022 and stuck up at ports.

The country through SRO 598(I)/2022 imposed a ban on import of luxury and non-essential items in order to discourage outflow of dollars and support balance of payment.

Due to the ban about one thousand containers piled up and resulted in choking the ports. The stakeholders requested the government to allow the release of those consignments as many of the consignments were shipped before May 19, 2022 but lander after the date.

READ MORE: SBP makes permission mandatory for motor car import

In this regard the Economic Coordination Committee (ECC) of the Cabinet in its meeting held on Tuesday July 5, 2022 allowed one-time release of those consignments carrying banned items and reached on or before June 30, 2022.

Ministry of Commerce submitted a summary to seek permission for one time release of those consignments of items banned on May 19, 2022 which have reached Pakistan or would reach or their payments.

In order to resolve the hardship cases, the ECC granted one-time special permission for release of consignments stuck at the ports due to contravention framed under SRO 598(I)/2022 dated May 19, 2022, only for those consignments which have landed at ports or airports in Pakistan on or before June 30, 2022.

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

Ministry of Commerce presented another summary on suspension of import conditions contained in import policy order 2022 with regard to import of timber/wood.

In view of hardship case of timber importers as the consignments were supplied against contracts months ago and the shipments have already arrived, the ECC decided that date of implementation of Import Policy Order 2022 regarding import of timber and wood falling under HS Codes 4401 to 4409 may be suspended till August 31, 2022 i-e for the bills of Lading issued till August 31, 2022.

The ECC also approved another summary of Ministry of Commerce to amend paragraph 3(1) of the Import policy Order 2022 to allow import of goods of Afghan origin against Pak Rupee and without the requirement of Electronic Import Form (EIF) for a period of one year, subject to the condition that Afghan exporters will provide a Certificate of Origin issued by Afghan Customs proving that the goods have originated from Afghanistan.

Federal Minister for Finance and Revenue Miftah Ismail presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet at Finance Division.

READ MORE: CMOs worry over power outages, 100% cash margin on imports

Federal Minister for Planning, Development and Special Initiatives Mr. Ahsan Iqbal, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Minister of State for Petroleum Division Musadik Masood Malik, Federal Secretaries and senior officers attended the meeting.

Ministry of National Food Security and Research submitted a summary on urgent advice relating to award of second international wheat tender 2022 opened on 1st July, 2022 for 500,000 MT.

The ECC considering the lower trend of wheat in the international market approved the lowest bid offer of M/s Cargill Int. PTE /Cargill Agro Foods Pakistan @ US$ 439.40/MT for 110,000 MT +/- 5% MOLSO to the extent of 500,000 MT.

Ministry of National Food Security & Research submitted a summary on WPF operation- purchase/ reservation of 120,000 metric tons of wheat for Afghanistan in the year 2022-23.

In view of the situation in Afghanistan and on humanitarian ground, the ECC approved the request of the WFP for purchase/ reservation of 120,000 MT of wheat from the imported wheat stock of PASSCO on the latest import price.

The amount of supplied wheat along with cost and incidentals would be charged in US dollars. The wheat will be locally grinded into wheat flour and will be supplied to Afghanistan by WFP, subject to relaxation of ban on the export of flour to the extent of the instant proposal of 120,000 MT of wheat.

READ MORE: KCCI demands release of stuck up containers

Ministry of National Food Security & Research presented another summary on the declaration of “National Disease Emergency” on account of Emergence of Lumpy Skin disease in Pakistan. The ECC after detailed discussion directed Ministry of National Food Security & Research to prepare a cost sharing plan after convening a meeting with concerned provincial secretaries and NDMA.

Ministry of Industries and Production submitted a summary on continuation of PM’s relief package, 2020, Sasta Atta initiative for KPK & expansion of Utility Stores network across Pakistan.

The ECC decided to continue subsidy on five essential commodities with direction to M/o I & P to work out feasible proposal on subsidy programme keeping in mind the financial implications.

The ECC also approved a summary submitted by Ministry of Information Technology and Telecommunication on constitution of Auction Advisory Committee to oversee spectrum auction(s) for next generation mobile services (NGMS) in Pakistan.

The Committee will be headed by Federal Minister for Finance and Revenue. The ECC also approved supplementary grant in favor of Economic Affairs Division amounting to Rs. 193.006 Billion for foreign loan repayments.

July 6, 2022
SBP makes permission mandatory for motor car import

KARACHI: The State Bank of Pakistan (SBP) on Tuesday made it mandatory for banks to take prior permission for making transactions related to import of motor cars in Completely Knocked Down (CKD).

The SBP issued a circular to implement the decision. The central bank invited attention of banks to EPD Circular Letter No. 9 dated May 20, 2022 relating to import of goods.

READ MORE: Pakistan car sales climb up by 50% in 11 months

In this regard, the list of goods for which Authorized Dealers are required to seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC for initiating the import transaction, has been updated.

Henceforth, Authorized Dealers shall be required to seek prior permission from FEOD, SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure.

READ MORE: Pakistan massively increases taxation on motor vehicles

All other instructions on the subject shall remain unchanged. The banks have been advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above and other applicable regulations on the subject.

Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.

READ MORE: Pakistan allows conditional import of CBU vehicles

It is important to note that the government on May 19, 2022 imposed ban on luxury and non-essential items in order to discourage outflow of dollars.

The import ban was imposed on only motor vehicles Completely Built Unit (CBU). However, the circular of the SBP has made the CKD motor cars import subject to prior approval.

READ MORE: Honda Cars declares 40% surge in annual profit

July 6, 2022
Key changes to income tax laws through Finance Act 2022

KARACHI: The Finance Act, 2022 has made significant changes to Income Tax Ordinance, 2001, which are applicable from July 01, 2022.

Following are the significant changes in Income Tax Ordinance, 2001 through Finance Act, 2022 as explained by PwC A.F. Ferguson & Co.:

READ MORE: Non-ATL retailers to pay double amount of fixed tax

1. Slab rates for super tax introduced for taxpayers having income in excess of Rs 150 million. The Bill earlier proposed such threshold at Rs 300 million at a standard rate of 2 per cent.

2. Super tax rate is enhanced to 10 per cent for certain specified sectors for tax year 2022 whereas for banking companies such enhanced rate of super tax will be applicable for tax year 2023.

READ MORE: Tampering PSW data to attract 4-year jail sentence

3. The proposal of final tax regime for commercial importers is withdrawn. Consequently, commercial importers will remain under minimum tax regime.

4. The proposal to restrict income tax holiday of certain IPPs withdrawn.

5. The standard rate of tax for banking companies revised at 39 per cent.

READ MORE: NA approves levy on petroleum products up to Rs50/liter

6. The revised slab rates for salaried individuals introduced by setting below taxable limit at Rs 600,000 as against the original proposal of Rs 1,200,000. Further, the reduction in tax rates proposed in Finance Bill has not only been reversed but the tax incidence has also been enhanced (as compared to position prior to Finance Bill).

7. The right to carry forward minimum tax retained, however, the period is reduced from five to three years.

8. The tax credit on contributions to Voluntary Pension Scheme retained.

9. The resident individual will now also include a citizen of Pakistan who was not in any one foreign country for more than 182 days.

10. The credit for income covered by final tax in respect of assets declared in wealth statement or books of account in excess of imputable income is inter alia subject to submission of audited financial statements.

READ MORE: All tax proposals of IT sector accepted: FBR

11. Advance tax on sale of immovable properties to be collected irrespective of holding period.

12. The rate of advance tax on imports mentioned in Part II of the Twelfth Schedule enhanced from 2 per cent to 3.5 per cent.

13. Reduced rate of Capital Gains Tax on listed securities based on holding period to apply on securities purchased on or after July 01, 2022.

July 5, 2022
Pakistan’s import bill records over $80 bn in 2021/2022

KARACHI: The total import bill of Pakistan has crossed a record $80 billion mark, showing 42 per cent increase during fiscal year 2021/2022, according to official data released on Tuesday.

The total import bill of the country increased to $80.02 billion during fiscal year 2021/2022 as compared with $58.38 billion in the preceding fiscal year, according to data released by Pakistan Bureau of Statistics (PBS).

READ MORE: Pakistan’s trade deficit balloons $43.33 bn in 11 months

The exports of the country also posted an increase of 25.51 per cent to $31.76 billion during the fiscal year under review as compared with $25.30 billion in the preceding fiscal year.

Pakistan posted a record trade deficit of $48.26 billion in the fiscal year 2021/2022 as compared with the deficit of $31.07 billion in the preceding year, showing an expansion in deficit of 55.29 per cent.

READ MORE: Pakistan’s imports hit record high at $65.47 bn in 10 months

The import bill in June 2021 increased by 14 per cent to $7.72 billion when compared with $6.77 billion in the month of May 2022. It was increased by 21.57 per cent when compared with $6.35 billion in June 2021.

READ MORE: Pakistan’s March trade deficit widens by only 5.5%

The exports posted an increase of 10 per cent to $2.88 billion in June 2022 when compared with $2.63 billion in May 2022. The exports increased by 5.83 per cent when compared $2.73 billion with June 2021.

READ MORE: Pakistan’s trade deficit widens to $32 billion in 8MFY22

July 5, 2022
Rupee sharply falls Rs206.94 to dollar in interbank

KARACHI: The Pakistan Rupee (PKR) fell sharply by Rs2.38 to Rs206.94 against the US dollar on Tuesday owing to long holidays ahead for Eid ul Adha.

The exchange rate witnessed a decline of Rs2.38 in rupee value to end at Rs206.94 against the dollar as compared with previous day’s closing of Rs204.56 in the interbank foreign exchange market.

READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

Currency experts said that higher demand was seen due to long holidays on the occasion of Eid ul Adha. The government has announced July 8 to July 12 as Eid holidays.

The rupee during the fiscal year 2021/2022 remained under pressure and lost value sharply. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

READ MORE: Dollar gains 25 paisas to PKR on forex reserves decline

The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar, according to data made available to PkRevenue.com on Thursday.

The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

READ MORE: Dollar retreats to Rs207.23 at interbank closing

These inflows would help the State Bank of Pakistan (SBP) to improve its foreign exchange reserves. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

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.

READ MORE: Rupee slips to new low at Rs211.93 against dollar

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.

In addition to that 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.

July 5, 2022

Non-ATL retailers to pay double amount of fixed tax

ISLAMABAD: Small retailers or a shopkeepers have to pay double the amount of fixed tax in case of not appearing on the Active Taxpayers List (ATL).

The federal government through the Finance Bill, 2022 introduced a scheme of fixed tax for small retailers.

However, the National Assembly approved the bill with certain changes in the fixed tax regime. The Finance Act, 2022 now has binding on the small retailer to register themselves with the tax department and appear on the Active Taxpayers list (ATL) in order to avail the fixed tax facility.

Otherwise, in case of not appearing on the ATL, the small retailer is required to pay one hundred per cent more on the amount of fixed tax.

In order to collect the tax under this regime, the government decided to recover the amount through electricity bill.

In this regard certain amendments have been made to Sales Tax Act, 1990 and Income Tax Ordinance, 2001.

In sub section 9, Section 3 of Sales Tax Act, 1990, a new proviso has been inserted through the Finance Act, 2022, which stated:

“Provided that the above rates of tax shall be increased by one hundred percent if the name of the person is not appearing in the Active Taxpayers List issued by the Board under section 181A of the Income Tax Ordinance, 2001 on the date of issuance of monthly electricity bill.”

Similarly, a new Section 99A has been inserted to the Income Tax Ordinance, 2001 and approved through the Finance Act, 2022, which is as follow:

“99A. Special provisions relating to payment of tax through electricity connections.

(1) Notwithstanding anything contained in the Ordinance, a tax shall be charged and collected from retailers other than Tier-I retailers as defined in Sales Tax Act, 1990 (VII of 1990) and specified service providers on commercial electricity connections at the rates provided in clause (2A) of Division IV, Part IV of the First Schedule.

(2) A retailer who has paid sales tax under sub-section (9) of section 3 of Sales Tax Act, 1990 (VII of 1990), shall not be required to pay tax under this section and the sales tax so paid shall constitute discharge of tax liability under this section.

(3) The tax collected or paid under this section shall be final tax on the income of persons covered under this section in respect of business being carried out from the premises where the electricity connection is installed.

(4) For the purposes of this section, Board with the approval of the Minister in-charge may issue an income tax general order to-

(a) provide the scope, time, payment, recovery, penalty, default surcharge, adjustment or refund of tax payable under this section in such manner and with such conditions as may be specified.

(b) provide record keeping, filing of return, statement and assessment in such manner and with such conditions as may be specified;

(d) include or exempt any person or classes of persons, any income or classes of income from the application of this section, in such manner and with such conditions as may be specified.”

The rate of tax leviable under section (99A), and collectable under sub section (1A) of Section 235 shall be as under:-

Gross amount of monthly bill	Tax
Where the amount does not exceed Rs. 30,000	Rs. 3000
Where the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000	Rs. 5000
Where the amount exceeds Rs. 50,000 but doesnot exceed Rs. 100,000	Rs. 10,000
Specified retailers and service providers through Income Tax General Order	Rs.50,000

July 5, 2022

Rupee starts FY23 with 29 paisas recovery to dollar

KARACHI: The Pakistan Rupee (PKR) started FY23 (fiscal year 2022/2023) with a recovery of 29 paisas against the dollar on Monday.

The exchange rate witnessed a recovery of 29 paisas in rupee value to end at Rs204.56 to the dollar from last closing of Rs204.85 on June 30, 2022 in the interbank foreign exchange market.

READ MORE: Rupee plunges 30% to dollar in fiscal year 2021-2022

The foreign exchange market was opened after bank holiday and weekly holidays.

The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar, according to data made available to PkRevenue.com on Thursday.

The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

READ MORE: Dollar slips to end at Rs205.12 in interbank

The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

These inflows would help the State Bank of Pakistan (SBP) to improve its foreign exchange reserves. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

READ MORE: Rupee recovers sharply on expected IMF inflows

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.

In addition to that 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.

READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

July 4, 2022
Pakistan petroleum sales climb up by 16 per cent in FY22

KARACHI: The domestic sales of petroleum products in Pakistan have jumped up by 16 per cent to 22,595 metric tons in fiscal year 2021/2022 when compared with the preceding year, a report said on Monday.

However, Pakistan oil sales declined by 11 per cent MoM to 1.9 million in June 2022 which is mainly driven by 14 per cent MoM dipped in MOGAS and High Speed Diesel (HSD) sales.

READ MORE: Dealers threaten shutting down petrol pumps from July 18

“This was due to sharp increase in MOGAS and HSD prices by 31 per cent and 51 per cent in June 2022, respectively,” said analysts at Topline Securities Research.

This led to reduced demand of petroleum products and rise in usage of public transport/car pooling, they added.

On YoY basis, oil sales remained flat during the month of June 2022.

READ MORE: NA approves levy on petroleum products up to Rs50/liter

MOGAS and HSD sales were down 12 per cent and 16 per cent on MoM basis to 702k tons and 713k tons, respectively. Excluding Furnace Oil (FO), overall petroleum sales volume stood at 1.48 million tons in June 2022, down 13 per cent MoM and 7 per cent YoY.

“In FY22, Pakistan’s oil sales clocked in at 22.6 million tons, up 16 per cent YoY, which was much better than the last 10-year growth rate,” the analysts said.

This was mainly led by higher than expected growth in Furnace Oil (FO) sales which reached 4 million tons (highest since FY18) due to high demand in power plants amidst non-availability of RLNG along with low hydel generation.

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

Excluding FO, oil sales were up 13 per cent YoY in FY22 due to uptick in MOGAS and HSD sales.

Motor Gasoline (MOGAS) and High Speed Diesel (HSD) volumes witnessed jump of 9 per cent YoY and 15 per cent YoY to 8.9 million tons each in FY22. This was driven by (i) strong economic growth including growth in Agriculture sector, and (ii) increase in auto sales.

Pakistan State Oil (PSO) sales outperformed the sector growing by 29 per cent whereas Attock Petroleum (APL) sales improved by 22 per cent in FY22. Shell Pakistan (SHEL) and Hascol Petroleum (HASCOL) underperformed the market during FY22.

READ MORE: Petroleum levy to generate Rs750 billion

Moving forward, we expect oil sales to decline by around 15 per cent YoY in the current fiscal year to due to (i) expected decline in auto sales in FY23, (ii) low growth estimated in agriculture sector (2.5 per cent for FY23F vs. 4.4 per cent in FY22), and (iii) sharp increase in petrol/diesel prices.

July 4, 2022
NA approves levy on petroleum products up to Rs50/liter

ISLAMABAD: National Assembly (NA) has approved a levy of Rs50 per liter on each petroleum product.

The assembly allowed the government to include the levy in the prices of petroleum products up to Rs50 per liter of each product.

READ MORE: All tax proposals of IT sector accepted: FBR

The National Assembly passed the Finance Act, 2022 that empowers the government to enforce the laws that were amended through federal budget 2022/2023.

In this regard amendment has been made to Petroleum Products (Petroleum Levy) Ordinance, 1961.

READ MORE: Pakistan’s salaried class unhappy over new tax changes

In this ordinance the fifth schedule has been amended as following:

High Speed Diesel: Rs50/liter

Motor Gasoline (Petrol): Rs50/liter

Superior Kerosene Oil (SKO): Rs50/liter

Light Diesel Oil (LDO): Rs50/liter

READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23

High Octane Blending Component (HOBC): Rs50/liter

E-10 Gasoline: Rs50/liter

Liquefied Petroleum Gas (Produced/extracted in Pakistan): Rs30,000 per metric ton.

The government has estimated a collection of Rs750 billion as petroleum levy during the fiscal year 2022/2023.

READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23

It is worth mentioning that the previous PTI government had not imposed a petroleum levy in order to provide petroleum products at cheaper rates.

However, the current coalition government led by PML-N in its budget 2022/2023 announced on June 10, 2023 estimated collection of Rs750 billion during the current fiscal year.

July 2, 2022
Pakistan opens return filing portal for tax year 2022

ISLAMABAD: Pakistan on Friday opened the income tax return filing portal for tax year 2022. The return filing portal will remained available till September 30, 2022, as three months are statutory time period for filing income tax return.

Salaried persons, business individuals, Association of Persons (AOPs) and Companies having special account year will file the income tax return during this period.

The Federal Board of Revenue (FBR) issued SRO 978(I)/2022 to notify finalized income tax return form for the tax year 2022.

Following are the categories of taxpayers who required to file income tax return for tax year 2022 under Income Tax Ordinance, 2001:

Section 14 of Income Tax Ordinance, 2001 has explained in detail about persons whom the annual return filing is mandatory. According to the Section:

READ MORE: Who needs to file Tax Year 2022 return in Pakistan?

114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–

(a) every company;

(ab) 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; or

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

(ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;

READ MORE: FBR issues draft return forms for tax year 2022

(b) any person not covered by clause (a), (ab), (ac) or (ad) 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;

(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;

READ MORE: Tax return filing starts from July 01, 2022

(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.

(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.

(1A) 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.

July 1, 2022