The Federal Board of Revenue (FBR) has unveiled the revised salary tax card for the tax year 2022-2023, incorporating the latest withholding income tax rates.
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FBR issues withholding tax rates on imports for tax year 2022-2023
The Federal Board of Revenue (FBR) has released the latest rates of withholding income tax applicable to the import of goods for the tax year 2022-2023.
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FPCCI rejects central bank’s claim of ‘no import restriction’
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday strongly rejected the claim of the central bank regarding no restriction on imports.
FPCCI’s acting president, Suleman Chawla in a statement categorically refuted the claims and assertions made by the State Bank of Pakistan (SBP) that there are no restrictions in place on import of raw materials.
READ MORE: No restriction on imports, SBP clarifies
Import payments not being cleared swiftly by SBP are resulting in disruptions in industrial production; unbearable demurrages and container charges; loss-making delays in fulfillment of export orders; inflationary pressures in the domestic markets and compounding of discouraging investor sentiments, he added.
Acting FPCCI Chief explained that due to the unavailability of foreign exchange, continuous rupee depreciation, speculative trading and delays by SBP, manufacturers and commercial importers are in a jeopardy and exports have started to fall. The country will suffer due to the dwindling exports, increasing trade deficit and yawning current account deficit (CAD), he added.
READ MORE: Pakistan’s apex body wants fixed exchange rate regime
Suleman Chawla has maintained that SBP has failed in exercising its constitutional duties of effectively regulating the commercial banks through various policy tools at its disposal; and, commercial banks are making windfall profits through speculative trading of dollars.
FPCCI has time and again reminded SBP, in no uncertain terms, of their responsibilities to control commercial banks; but, it is always unfruitful & goes in vain, he added.
Acting FPCCI President emphasized that dollar is trading in the open market at a premium of PKR. 8 – 10 and it is a glaring testimony of the fact that the importers are not being able to source the dollars that they need to fulfill their import contracts and related commercial transactional procedures from the banking channels. It will only aggravate the situation and promote the informal open market, he added.
READ MORE: KCCI managing committee candidates elected unopposed
Chawla pointed out that there are still difficulties in opening LCs with commercial banks under chapter 84 & 85 of the custom tariff; despite the claimed circular issued by SBP to the commercial banks and that reflects badly on SBP’s ability to implement its regulatory role. However, he emphasized, SBP has all the means and policy tools to implement its decisions & circulars.
Engr. M. A. Jabbar, VP FPCCI, highlighted that despite taking responsibility of its failure, SBP has resorted to blaming the industrialists and their representatives; who are already under unprecedented strains due to the various other factors in addition to the dearth of dollars in the banking channel.
READ MORE: APTMA demands immediate release of textile machinery
Engr. Jabbar added that FPCCI sees SBP’s conduct as detrimental to industrial growth, an utter lack of responsibility, insensitivities to people’s sufferings due to depleting employment opportunities, debilitating inflation and counterintuitive coupled with lack of initiative to fulfill its mandated duties.
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Pakistani Rupee declines for ninth straight session; Dollar ends at PKR 234.32
KARACHI: The Pakistani Rupee (PKR) continued its falling spree for the ninth consecutive session against the dollar as the foreign currency ended at PKR 234.32 at closing of the interbank foreign exchange market on Wednesday.
The exchange rate witnessed a decline of Rs2.41 in rupee value to end at Rs234.32 to the dollar from previous day’s closing of Rs231.92 in the interbank foreign exchange market.
READ MORE: Dollar surges to PKR 233.50 in midday interbank on September 14, 2022
The local currency recorded a decline of Rs15.72 or 7.2 per cent during the past nine 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.
READ MORE: PKR losing streak continues; Dollar ends Rs231.92 at interbank
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.
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: PKR falls for 7th straight day; dollar jumps to Rs229.82
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.
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Sindh exempts tax on services provided for flood relief
KARACHI: Sindh government has allowed whole of sales tax on services provided or rendered for flood relief operations.
In this regard, Sindh Revenue Board (SRB) issued a notification dated September 13, 2022, stated that the government of Sindh exempted the whole of sales tax payable on such taxable services as are certified by the National Disaster Management Authority (NDMA) or Provincial Disaster Management Authority (PDMA), Sindh to be meant for flood relief operations carried out in Sindh Province.
READ MORE: SBP allows flood relief donations through home remittance channel
The province allowed sales tax exemption on the following services:
01. Services provided or rendered by restaurants for free distribution as donation or charity.
02. Services provided or rendered by caterers, suppliers of food and drinks for free distribution as donation or charity.
READ MORE: FBR directs speedy clearance of flood relief goods
03. Advertisements for charity and donations in the Prime Minister’s Flood Relief Fund or in the Chief Minister Sindh’s Flood Relief Fund.
04. Renting of machinery, equipment, appliances and other tangible goods acquired and used for rehabilitation and reconstruction.
READ MORE: USC to disburse ration bags worth Rs540 million to flood victims
05. Labor and manpower supply services provided in the course of flood relief operations.
06. Services provided or rendered by persons engaged in inter-city transportation or carriage of flood relief goods by road.
The SRB said that the notification, if not rescinded earlier, shall stand rescinded on and from January 01, 2023.
READ MORE: Pakistani fintech enables individuals to donate flood victims
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No restriction on imports, SBP clarifies
KARACHI: State Bank of Pakistan (SBP) on Tuesday clarified that there is no restriction on import of raw material for any industry.
In a statement the central bank said that lately, some media reports and representatives of trade organizations have claimed that banks are not opening Letters of Credit (LCs) for essential raw materials including pharmaceuticals.
READ MORE: State Bank suspends two exchange companies
“This is contrary to the facts. It is clarified that there is no restriction on the import of raw material for any industry including export-oriented industry,” the SBP added.
It is further clarified that SBP has advised banks, through EPD Circular Letters No. 9 and No. 11 of May 20, 2022 and July 5, 2022, to seek prior permission before initiating transactions for import of Motor Cars (CKD), Mobile Phones (CKD) and machinery (falling under HS codes Chapter 84, 85 and certain codes with prefix 87).
READ MORE: Dollar hits PKR 232 in midday interbank trading
Keeping in view the concerns of the industry, SBP and the Federal Government, in consultation with the relevant stakeholders have devised a mechanism to accommodate import by different sectors/industries i.e. automobiles, mobile phones, home appliances, tractors, 2 and 3 wheelers, transformers and switchgear, auto parts manufacturers, telecom operators and exporters.
READ MORE: Pakistan remittances from Saudi Arabia fall by 7.5% in two months
The SBP has already approved more than 7,000 cases till date. “The delays in approval are caused sometimes because of submission of inaccurate or insufficient information to SBP,” it added.
SBP is, however, striving hard to expedite the approval process as much as it can, according to the statement.
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Dollar hits PKR 232 in midday interbank trading
KARACHI: The US dollar maintained its upward journey against the Pakistan Rupee (PKR) and hit Rs 232 in midday interbank trading on Tuesday.
The exchange rate witnessed a fall of Rs2.18 in rupee value as the dollar is being traded Rs232 from previous day’s closing of at Rs229.82 in the interbank foreign exchange market.
READ MORE: PKR falls for 7th straight day; dollar jumps to Rs229.82
It is worth mentioning that the rupee recorded all-time low of Rs239.94 on July 28, 2022.
The rupee witnessed free fall against the dollar and plunged for 7th straight day against dollar a day earlier as the US dollar jumped to Rs229.82 in interbank foreign exchange market.
READ MORE: Rupee weakens sixth straight day; dollar ends PKR 228.18
The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF). The local currency has recorded Rs11.22 against the foreign currency during the past seven sessions. The local unit was at Rs218.60 to the dollar on September 01, 2022.
It is worth mentioning that Pakistan received $1.1 billion from the IMF under Extended Fund Facility (EFF) on August 31, 2022 following the executive board of the IMF approved the loan program on August 29, 2022.
READ MORE: Pakistani Rupee weakens; Dollar jumps to PKR 225.42 at interbank
Currency experts said that the rupee was under immense pressure due to high import payment demand and losses to the economy due to floods.
They said that high import payments by end of this quarter and corporate payments put pressure on the rupee value.
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 strengthens to PKR 223.42 at interbank closing
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 $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.
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Pakistan remittances from Saudi Arabia fall by 7.5% in two months
KARACHI: Remittances sent by overseas Pakistani workers living in Saudi Arabia fell by 7.5 per cent during first two months of the fiscal year 2022/2023.
Pakistani workers living in Saudi Arabia are remain the major sender of remittances during the period under review. The country received $1.27 billion from Saudi Arabia during July – August 2022 as compared with $1.37 billion in the corresponding period of the last year, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
READ MORE: State Bank signs deal to analyze property prices
The overall remittances sent by Pakistani workers declined by 3 per cent during first two months (July – August) 2022/2023. The overseas Pakistani workers sent $5.25 billion during first two months of the current fiscal year as compared with $5.42 billion in the same months of the last fiscal year.
READ MORE: SBP bars banks from taking service charges on flood donations
The inflows from the UAE recorded a decline of 8.2 per cent during the period under review. The remittances from the UAE fell to $987 million during first two months of the current fiscal year as compared with $1.07 billion in the same period of the last fiscal year.
READ MORE: Complaints against banks for refusing flood donations
Remittances sent by Pakistani workers living in the USA and the UK were $549 million and $781 million, respectively during the first two months of the current fiscal year.
The foreign inflows received by the country were $2.72 billion in the month of August 2022, which were $2.68 billion in the same month of the last year and $2.52 billion in the previous month (July 2022).
READ MORE: SBP allows flood relief donations through home remittance channel
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Pakistan implemented currency declaration decade ago: FBR
ISLAMABAD: Pakistan has implemented currency declaration for all international passengers a decade ago, the Federal Board of Revenue (FBR) clarified on Monday.
FBR, the apex tax collecting agency of Pakistan, stated that the currency declaration regime for all international passengers has been in field for more than a decade, rather than being recently introduced on account of any recent FATF review requirements.
READ MORE: Last date for filing tax return is September 30, FBR reminds
It said a misleading impression has been created in some section of the press that Pakistan has recently imposed currency declaration requirements for passengers coming into Pakistan, which is contrary to facts.
Unlike portrayed by some section of the press, the mandatory requirement for passengers coming into Pakistan and bringing currency and/or negotiable instruments was notified by the State Bank of Pakistan more than 10 years ago vide notification no. F.E.1/2012-SB dated 16th June 2012. This requirement came into force on July 01,2012.
READ MORE: Disclosure of beneficial ownership made mandatory for companies
Subsequently, in order to widen the scope of declaration to include gold jewelry, precious stones and other prohibited/ restricted goods, Pakistan Customs also introduced a comprehensive “Customs Declaration Form for Passengers” which was notified vide SRO 689(I)/2019 dated 29th June, 2019. These rules cover both the incoming and outgoing passengers.
READ MORE: KTBA highlights pharmaceutical industry’s reporting issues
These requirements for declaration are in line with international standards and the best practices adopted by most of the countries in the world. The passengers can make the declaration either manually at the Customs counter or electronically in the Customs System.
In order to increase awareness amongst the international passengers, Pakistan Customs has been collaborating with the Civil Aviation Authority, Airlines, and Immigration Authorities to improve its outreach for both departing and arriving passengers. As a result, the compliance has been steadily increasing.
READ MORE: FBR directs 81 retailers to integrate with POS system
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Pakistan to review petroleum prices on September 15, 2022
ISLAMABAD: Pakistan is likely to review petroleum prices on Thursday September 15, 2022 for the next fortnight starting from September 16, 2022.
The country reviews domestic oil prices after every 15 days to adjust rise and fall of prices in the international market and changes occurred in the exchange rates.
READ MORE: New petroleum prices in Pakistan from September 01, 2022
Experts believe that Pakistan may increase the petroleum prices for the fortnight starting from September 16, 2022 because of massive decline in rupee value during past 15 days besides the expected imposition of sales tax and further increase in petroleum levy.
The government on August 31, 2022 decided to increase the prices of petroleum products effective from September 01, 2022. The decision was strongly criticized by the stakeholders because the international markets had seen fall in oil prices.
The finance division notified the new prices of petroleum products with effect from September 01, 2022.
READ MORE: Pakistan to increase petroleum prices from September 01, 2022
The price of petrol has been increased by Rs2.07 per liter to Rs235.98 from Rs233.91.
The price of high speed diesel has been increased by Rs2.99 per liter to Rs247.43 from Rs244.44.
The rate of kerosene oil has been raised by Rs10.92 per liter to Rs210.32 from Rs199.40.
The price of light diesel oil has been increased by Rs9.79 per liter to Rs201.54 from Rs191.75.
Pakistan is a net importer of petroleum products so huge foreign exchange is required for paying against foreign purchases and meeting local demand.
The country has spent a staggering amount of $23.32 billion for the import of petroleum group during fiscal year 2021/2022 as compared with $11.36 billion in preceding year, showing a growth of 105 per cent. The import of finished products recorded an increase of 134 per cent to $12.07 billion during the fiscal year 2021/2022 as compared with $5.16 billion in the preceding fiscal year.
READ MORE: New petroleum prices in Pakistan from August 16, 2022
The benchmark Brent crude is below $100 dollars. Brent crude futures were at $92.84 per barrel in New York trade on September 09, 2022.
The present government had started increasing the petroleum prices on May 26, 2022 when the benchmark Brent Oil was at $112 per barrel.
Considering the price slump of international oil, the government had reduced the prices of petroleum products from July 15 to July 31. However experts believed it was a political decision as the government had to increase petroleum levy and apply sales tax.
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.
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.
READ MORE: New petroleum prices in Pakistan from August 1, 2022
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.
The exchange rate has seen massive decline in rupee value during past week despite inflows received from the International Monetary Fund (IMF).
Pakistani Rupee (PKR) has plunged by Rs9.43 against the US dollar since the country received tranche from the International Monetary Fund (IMF). The country received a tranche of $1.16 billion from the IMF under Extended Fund (EFF) loan program on August 31, 2022.
The government was hopeful of improvement in economic indicators once the money is received from the IMF. However, in contrast the PKR fell sharply since the IMF funds transferred to the State Bank of Pakistan (SBP).
The exchange rate was Rs218.75 to the dollar on August 31, 2022, the day when the money was received by Pakistan. However, since then the rupee fell by Rs9.43 or 4.31 per cent to Rs228.18 to the dollar on September 09, 2022 in interbank foreign exchange market.