Pkrevenue.com

Category: Top stories

Find top stories in this section. Pakistan Revenue brings you the latest and most important news from Pakistan and around the world, keeping you informed with key updates and insights.

  • Banks increasing dollar rates; FAP tells Prime Minister

    Banks increasing dollar rates; FAP tells Prime Minister

    KARACHI: Malik Mohammad Bostan, President, Forex Association of Pakistan (FAP) on Monday informed Prime Minister Shehbaz Sharif that banks are increasing dollars rate.

    Prime Minister Shehbaz Shari, in a Zoom meeting with FAP President, expressed concerns of significant devaluation of Pakistan Rupee (PKR) and asked reasons behind the recent fall of rupee against the dollar.

    READ MORE: FAP demands dollar exchange without CNIC condition

    Bostan explained the reasons for dollar appreciation including high trade deficit, delay of $1 billion IMF loan tranche and huge external debt which are scheduled to pay this year.

    FAP President said that until the rate of dollar is not reduced in the interbank the free market may not bring down the exchange rate. He said the exchange companies can control the free market. “If banks bring down dollar rate by Re1 we will appreciate the local currency by Rs2,” he added.

    READ MORE: FAP suggests incentive to undeclared $3 billion

    Bostan informed the prime minister that after his oath taking the rupee appreciated to Rs181 to dollar from Rs189. “However, after political uncertainty and announcement of sit-in in Islamabad put pressure on the exchange rate,” he added.

    READ MORE: Dollar makes fresh high at Rs194.18 at interbank closing

    Due to uncertainty, importers are opening more Letter of Credit (LCs) and exporters were surrendering less dollars, which have reduced the supply of dollars in the local market, he added.

    FAP President suggested that the government should ban import of luxury items, which help in saving around $12 billion annually. “This will help the country to repay external debt without taking more loans,” he added.

    READ MORE: Pakistan’s forex reserves fall to $16.37 billion

  • ECC approves Rs55.48bn for price differential claims of OMCs

    ECC approves Rs55.48bn for price differential claims of OMCs

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved an amount of Rs55.48 billion for payment of price differential claims of Oil Marketing Companies (OMCs).

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

    READ MORE: Govt. decides to continue subsidy on petroleum prices

    Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Minister of State for Finance & Revenue Dr. Aisha Ghous Pasha, Minister of State for Petroleum Musadik Masood Malik, Federal Secretaries and senior officers attended the meeting.

    Petroleum Division submitted a summary for reimbursement of Price Differential Claims (PDCs) of Oil Marketing Companies (OMCs) and Refineries.

    READ MORE: Pakistan cuts petroleum prices amid Russia-Ukraine War

    The price differential is to be paid to the Oil Marketing Companies/Refineries by the Government as a subsidy in the wake of Government’s decision to keep the petroleum products’ prices fixed at the level notified on March 01, 2022.

    The ECC after deliberation approved supplementary grant of Rs. 55.48 billion for disbursement of PDC to OMCs/Refineries for the first fortnight of May, 2022.

    READ MORE: New government keeps petroleum prices unchanged

    Due to continuously rising trend of oil prices in the international market, the quantum of subsidy has been on higher side.

    Ministry of Industries and Production submitted a summary on import of Urea and presented that the government intends to create better stock for Urea fertilizer to ensure continuity of Urea supply during next financial year and requested for allowing import of Urea from international market in order to stabilize the local market.

    The ECC after discussion allowed Trading Corporation of Pakistan (TCP) to explore the possibility of import of 200,000 MT of Urea on G2G basis and on deferred payment.

    READ MORE: Pakistan surrenders to IMF, agrees to remove subsidies

  • Dollar makes fresh high at Rs194.18 at interbank closing

    Dollar makes fresh high at Rs194.18 at interbank closing

    KARACHI: The US dollar made a new fresh record high of Rs194.18 against the Pakistan Rupee (PKR) on Monday due to massive decline in foreign exchange reserves.

    The exchange rate witnessed a decline of Rs1.65 in rupee value to end at Rs194.18 to the dollar as compared with last Friday’s closing of Rs192.53 in the interbank foreign exchange market.

    READ MORE: Rupee falls for 8th straight day; dollar hits Rs192.53

    Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.

    Pakistan’s foreign exchange reserves fell by $177 million to $16.376 billion by the week ended May 6, 2022. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.

    READ MORE: Rupee fall continues; dollar hits new high at Rs191.77

    The country’s foreign exchange reserves hit record high at $27.228 billion by the week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $10.852 billion.

    The official reserves of the State Bank witnessed a decline of $190 million to $10.309 billion by the week ended May 6, 2022 as compared with $10.499 billion a week ago.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The SBP reserves reached a record high at $20.145 billion by August 27, 2021. The official reserves also fell by $9.836 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.56 months.

    The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    Pakistan is a net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of the country.

  • Dollar hits record high Rs194 in midday trading

    Dollar hits record high Rs194 in midday trading

    KARACHI: The US dollar hit a record high of 194 against the Pakistan Rupee (PKR) during midday trading at interbank foreign exchange market on Monday.

    The exchange rate witnessed a loss of Rs1.47 in the local currency value against the greenback. The dollar is being traded at Rs194.

    READ MORE: Rupee falls for 8th straight day; dollar hits Rs192.53

    Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.

    Pakistan’s foreign exchange reserves fell by $177 million to $16.376 billion by week ended May 6, 2022. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.

    READ MORE: Rupee fall continues; dollar hits new high at Rs191.77

    The country’s foreign exchange reserves hit record high at $27.228 billion by week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $10.852 billion.

    The official reserves of the State Bank witnessed a decline of $190 million to $10.309 billion by week ended May 6, 2022 as compared with $10.499 billion a week ago.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The SBP reserves reached to record high at $20.145 billion by August 27, 2021. The official reserves also fell by $9.836 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.56 months.

    The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

  • Govt. decides to continue subsidy on petroleum prices

    Govt. decides to continue subsidy on petroleum prices

    ISLAMABAD: The coalition government led by PML-N has decided to continue the subsidy on prices of petroleum products in order to prevent people from high prices.

    Finance Minister Miftah Ismail on Sunday May 15, 2022 announced to maintain the prices of petroleum products at the same level, which were announced by the previous PTI government.

    READ MORE: Pakistan cuts petroleum prices amid Russia-Ukraine War

    On February 28, 2022, former Prime Minister Imran Khan announced reduction in prices of petroleum products and freeze the prices till June 30, 2022. This decision came with announce of multi-billion rupees subsidy to keep the fuel prices lower.

    This decision was strongly criticized by the legislators, who are now sitting on the treasury benches. The present government despite strong opposition to the decision to grant of subsidy on the petroleum prices, has no option but to keep the prices unchanged during its tenure of more than a month.

    READ MORE: New government keeps petroleum prices unchanged

    According to the statement the new prices of the petroleum products effective from March 01, 2022 are:

    The price of petrol slashed by Rs10 to Rs149.86 per liter from Rs159.86.

    The rate of high speed diesel has been reduced by Rs10 to Rs144.15 per liter from Rs154.15.

    The price of kerosene oil has been brought down by Re1 to Rs125.56 per liter from Rs126.56.

    Similarly, the rate of light diesel oil has been slashed by Rs5.66 to Rs118.31 per liter from Rs123.97.

    Miftah Ismail on Sunday said despite increasing prices of petroleum products Prime Minister Shehbaz Sharif had decided not to transfer the burden of price hike on masses.

    The decision has been taken at a time when the government is going to discuss loan program under Extended Fund Facility (EFF) with the International Monetary Fund (IMF). Under this program, the government has already agreed to raise the prices of petroleum products by removing subsidies.

    READ MORE: Pakistan surrenders to IMF, agrees to remove subsidies

    The IMF issued the following statement on April 24, 2022:

    “We had very productive meetings with the Finance Minister of Pakistan Miftah Ismail over Pakistan’s economic developments and policies under the Extended Fund Facility (EFF) program.

    “We agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the 7th review.

    “Based on the constructive discussions with the authorities in Washington, the IMF expects to field a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review.

    “The authorities have also requested the IMF to extend the EFF arrangement through June 2023 as a signal of their commitment to address existing challenges and achieve the program objectives.”

    READ MORE: Pakistan raises petrol price to record high at Rs160/liter

    Miftah Ismail in its latest statement said: “PTI government has destroyed economy of the country.”

    The Minister said agriculture sector was badly ignored and resultantly Pakistan imported wheat worth of six hundred million dollars last year. He said this year wheat worth of $1.5 billion will have to be imported.

    Miftah Ismail said prices of flour soared up from 35 rupees per kg to 80 rupees per kg in last four years.

    Talking about sugar price, Miftah Ismail said that government is providing cheap sugar and it has directed to further decrease the price of commodity. He also said the government will not import sugar this year.

  • FBR tightens monitoring to prevent currency smuggling

    FBR tightens monitoring to prevent currency smuggling

    ISLAMABAD: The Federal Board of Revenue (FBR) has tightened monitoring to prevent currency smuggling in the wake of free-fall in rupee value against the foreign currencies.

    A statement issued on Sunday stated that FBR Chairman Asim Ahmad had instructed customs field formations for stepping up vigilance to ensure monitoring of passengers to stop currency smuggling.

    “Building further on its policy of zero tolerance against currency smuggling, Chairman FBR has instructed Customs field formations for stepping up vigilance at airports and land border stations. Concerned Collectorates to ensure monitoring of all inbound and outbound passengers,” according to a Tweet.

    The US dollar has continued momentum of appreciation against the Pakistan Rupee (PKR) in the interbank foreign exchange market.

    READ MORE: Rupee falls for 8th straight day; dollar hits Rs192.53

    The rupee fell for the eight straight days to the record low of Rs192.53 to the dollar on May 13, 2022. The fall in rupee value may be attributed to fall in foreign exchange reserves and high payments for imports. However, some believed the unrecorded outflow of foreign currency also depressed the foreign exchange market.

    Previously, the FBR on September 24, 2021 issued a clarification rebutting the reports of currency smuggling from Pakistan to Afghanistan.

    READ MORE: FBR rebuts currency smuggling to Afghanistan

    In the statement, the FBR categorically rebutted the unfounded, malicious intent and misleading in content propaganda being advanced by some irresponsible elements that there was a huge flight of dollars from Pakistan.

    It is further clarified that previously the bilateral trade between Pakistan and Afghanistan was carried out in US Dollars but now the same is being conducted in Pak Rupees (PKR).

    Furthermore, FBR has taken very stringent enforcement measures at the Airports to eliminate the possibility of any such an unethical practice.

    Pakistan Customs has made it mandatory for all passengers flying out of the country to undergo thorough personal scrutiny and 100 per cent declaration of currency through an automated process in order to ward off this nefarious illegal activity. This leaves the little possibility of the subject undesirable practice.

    READ MORE: Multan customs auctions smuggled diesel oil on May 18, 2022

    It is most likely that Chairman FBR and Member (Customs Operations) will visit the Pak-Afghan border to oversee the functioning of the above mechanism on the ground.

    It is further reiterated that this transparent and efficient mechanism being adopted at all the airports across Pakistan is facilitating the smooth and easy movement of outbound passengers, thus significantly reducing their time and cost.

  • FAP suggests incentive to undeclared $3 billion

    FAP suggests incentive to undeclared $3 billion

    People have an undeclared amount of $2 billion to $3 billion foreign currency in their homes and personal bank lockers. They want to exchange with Pakistani Rupee (PKR) but due to certain restrictions they are unable to bring it out. The government should provide legal shelter for declaration of concealed dollars, which will help to boost the foreign exchange reserves.

    READ MORE: Pakistan’s forex reserves fall to $16.37 billion

    Malik Muhammad Bostan, President, Forex Association of Pakistan (FAP) commented these at a conference on present economic woes, especially falling rupee and depletion of foreign exchange reserves.

    “Many people taking advantage of Economic Reform Act purchased huge amount of dollars from the local market during the period of 1993 to 2008 and deposited in the banks of foreign countries or retained the dollars at their homes or lockers,” he said.

    READ MORE: Pakistan’s forex reserves dip to $16.55 billion

    Prior to year 2008, there were many unlicensed money exchange companies were operating under Economic Reform Act. Those exchange companies were allowed to sale and purchase foreign currency without ‘Know Your Customer (KYC)’. SBP licensed exchange companies were required to conduct KYC on sale/purchase of above $10,000.

    “Now those people want to sale their dollars through KYC but without identification,” he said, adding that the under Financial Action Task Force (FATF) conditions, the banks are required to obtain identification on sale/purchase of above $15,000.

    READ MORE: SBP forex reserves shrink to 1.69 months import cover

    “If this condition is relaxed then exchange companies will able to purchase huge amount of dollars and other foreign currency from public,” Bostan said.

    FAP President said the government should allow purchase of gold from local market. “They may sale gold in international market and surrender foreign currency in the local market.”

    Pakistan forex reserves inch up to $17.045 billion

    There is need to channelize foreign currency invested in cryptocurrency, he said and demanded that the government should provide legal cover to bring foreign currency back home.

    He suggested that banks should stop forward dollar selling and should be allowed to sale dollar equivalent to purchase.

    Bostan said the State Bank of Pakistan (SBP) should imposed 100 per cent cash margin on all imports except for necessary items.

    Pakistan’s forex reserves deplete to $17.03 billion

  • FBR issues procedure for restoration of input tax adjustment

    FBR issues procedure for restoration of input tax adjustment

    ISLAMABAD: The Federal Board of Revenue (FBR) has issued procedure to restore input tax adjustment claimed by Tier-1 retailers.

    The FBR on Friday issued Sales Tax General Order (STGO) No. 17 of 2022 dated May 13, 2022 regarding Tier-1 retailers – integration with FBR POS System.

    The procedure for reversal of bar on input tax adjustment by 60 per cent (i.e. the exclusion), as provided for in STGO No. 1 of 2022 dated August 3, 2022 has been automated. The STGO No. 1 has now been amended to the extent of reversal of bar on input tax adjustment by 60 per cent / issuance of exclusion certificates.

    READ MORE: POS service fee issue hampers sales tax return filing

    The FBR said a registered person whose adjustable input tax has been reduced by 60 per cent under Section 8B(6) of the Sales Tax Act, 1990, by inclusion in STGO shall file application for removal of this bar / for restoration of input tax adjustment. Application shall be filed through the system (IRIS) by selecting the relevant reason for the exclusion from the purview of the said section, along with any proof / evidence in support of the application.

    Once an application is submitted, the FBR said, adding that it shall be examined and an order (exclusion certificate) shall be passed by the concerned commissioner IR in the system, after such inquiries and examination of such record, as deemed necessary by him/her, as under:

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    A. Acceptance of application (i.e. Exclusion Certificate allowed):

    In the event of acceptance of the application (i.e. exclusion certificate allowed) by the concerned commissioner IR, the system shall automatically restore the input tax adjustment as per law as under:

    i. Application accepted by the concerned commissioner IR for the reason of ‘integration with FBR’s POS system’: Restoration of input tax adjustment shall apply with effect from the tax period next following the tax period(s) during which the Tier-1 Retailer remained non-integrated. As already clarified by the Board, the 60 per cent reduction in input tax adjustment (disallowance) shall apply to the tax period in which the Registered Person integrated with FBR’s system, as well as, to the prior tax period(s) during which the registered person remained non-integrated or remained partially integrated (i.e. not all the terminals and / or branches were integrated).

    READ MORE: Adjustment restrictions hamper return filing by retailers

    Concerned Commissioner – IR, at the time of passing the order in the system shall provide the date of integration and the system shall restore the input tax adjustment accordingly, as above.

    ii. Application accepted by the concerned Commissioner-IR for the reason ‘Not a Tier-1 Retailer as defined under Section 2(43A) of the Sales Tax Act, 1990: In this scenario the reduction in input tax adjustment (disallowance) by 60 per cent, shall be reversed with effect from the date this bar was placed on and no tax period shall remain subjected to reduction in input tax adjustment (which was originally placed under section 8B(6) of the Sales Tax Act, 1990).

    READ MORE: FBR announces winners of third POS invoice draw

    B. Rejection of Application (i.e. Exclusion Certificate disallowed): In the event of rejection of the application, this reduction (disallowance) in input tax adjustment shall continue in all subsequent tax period(s) as before,

    The FBR said the procedure of automation in the hands of concerned commissioner-IR will be effective from May 10, 2022 and cases for restoration of 60 per cent reduction (disallowance) of input tax adjustment (excluded cases) as already communicated to PRAL by the Board, shall be managed/implemented in the system by PRAL.

  • Rupee falls for 8th straight day; dollar hits Rs192.53

    Rupee falls for 8th straight day; dollar hits Rs192.53

    KARACHI: The Pakistan Rupee (PKR) continued to slide against the US dollar for eighth straight day and reached to historic low at Rs192.53 on Friday.

    The exchange rate witnessed a decline of 76 paisas in rupee value to reach Rs192.53, making fresh low against the US dollar in interbank foreign exchange market. The exchange rate was at Rs191.77 a day earlier at closing in interbank foreign exchange market.

    READ MORE: Rupee fall continues; dollar hits new high at Rs191.77

    Currency experts said that the falling foreign exchange reserves were main reason behind the free-fall in rupee value.

    Pakistan’s foreign exchange reserves fell by $177 million to $16.376 billion by week ended May 6, 2022. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.

    The country’s foreign exchange reserves hit record high at $27.228 billion by week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $10.852 billion.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The official reserves of the State Bank witnessed a decline of $190 million to $10.309 billion by week ended May 6, 2022 as compared with $10.499 billion a week ago.

    The SBP reserves reached to record high at $20.145 billion by August 27, 2021. The official reserves also fell by $9.836 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.56 months.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

    READ MORE: Dollar ends Rs187.53 at interbank market close

  • Pakistan receives record monthly high $3 billion as remittances

    Pakistan receives record monthly high $3 billion as remittances

    KARACHI: Pakistan has received a monthly record workers’ remittance of $3.13 billion in the month of April 2022, the central bank said on Friday.

    The State Bank of Pakistan (SBP) said the remittances grew by 12 per cent in April 2022 to $3.125 billion as compared with $2.79 billion received in April 2021. Meanwhile, the country received $2.81 billion in the month of March 2022.

    READ MORE: SBP receives $2.2 bn as workers remittances in February

    The inflow of remittances recorded 7.6 per cent growth to $26.08 billion during the first 10 months (July – April) 2021/2022 when compared with $24.23 billion in the corresponding months of the last fiscal year.

    Pakistanis living in the USA have sent $2.556 billion during July – April 2021/2022, which is 20 per cent higher when compared with $1.4 billion in the same period of the last fiscal year.

    READ MORE: Remittances increase to record $18 billion in 7 months

    The SBP received an amount of $3.67 billion during the first ten months of the current fiscal year from Pakistani workers living in the UK as compared with $1.98 billion in the corresponding period of the last fiscal year, showing an increase of 9.9 per cent.

    Pakistanis living in Saudi Arabia sent an amount of $6.41 billion during the period under review as compared with $5.32 billion in July – April 2020/2021, showing a growth of 1.6 per cent.

    READ MORE: Pakistani overseas workers send $15.8 billion in 1HFY22

    The inflows of remittances from the UAE, however, posted a decline of 3.6 per cent to $4.90 billion during the first 10 months of the current fiscal year as compared with $5.08 billion in the same period of the last fiscal year.

    Pakistanis living in the EU countries have sent an amount of $2.80 billion during the first ten months of the current fiscal year as compared with $2.21 billion in the same period of the last fiscal year, showing a growth of 27.1 per cent.

    READ MORE: PM Imran launches incentive program for remittances