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  • FBR exempts regulatory duty on Afghan pine nuts

    FBR exempts regulatory duty on Afghan pine nuts

    ISLAMABAD: The Federal Board of Revenue (FBR) has exempted regulatory duty at the rate of 45 per cent on import of pine nuts (chilgoza) from Afghanistan.

    The FBR issued SRO 181(I)/2022 dated February 22, 2022 to allow the exemption.

    Through the latest SRO, the FBR amended the SRO 840(1)/2021 dated June 30, 2021.

    The FBR through the latest SRO noted: “[pine nuts (chilgoza) imported from Afghanistan are exempted from regulatory duty at the rate of 45 per cent.”

    Prior to this the Pakistan government expanded the list of goods for export to Afghanistan and through Afghanistan to Central Asian Republics without requirement of E-form and against Pakistan Rupee (PKR).

    In this regard the ministry of commerce issued SRO176(I)/2022 dated February 04, 2022 to amend Export Policy Order 2020.

    READ MORE: List of goods export to Afghanistan in PKR, no E-form

    As per the export policy order, export goods to Afghanistan and through Afghanistan to Central Asian Republics are allowed against Pakistan currency on filing of regular shipping bills without the requirement of E-form.

    Prior to the amendment, the allowed goods are included: fruits; vegetables; dairy products; and meat. However, after the amendment more number of goods have been added to the list, which included: rice; fish and fish products; poultry, meat and products; sugar confectionary and bakery products; fruits, nuts and other edible parts of plants; oilcake and other solid residues; vegetable materials and vegetable waste; salt; cement; pharmaceuticals; matches; textile and textile articles; building stone; and surgical instruments.

    As per the Export Policy Order, 2021, the goods are not entitled to: zero rating of sales tax on taxable goods; rebate of central excise duty; and payment of drawback of customs duty.

    READ MORE: Pakistan establishes Afghanistan relief fund

  • Sales tax collection from POL products falls by 40%

    Sales tax collection from POL products falls by 40%

    ISLAMABAD: The Federal Board of Revenue (FBR) has recorded a decline of 40 per cent in sales tax (ST) collection on petroleum (POL) products during the first half of the current fiscal year, according to official documents made available to PkRevenue.com

    According to the official statistics, the collection of sales tax fell to Rs69 billion during July – December of fiscal year 2021/2022 as compared with Rs114.60 billion collected in the same period of the last fiscal year.

    READ MORE: Share of sales tax collection increases to 43.7% in 1HFY22

    The decline in revenue collection from petroleum products mainly attributed to lower rates of sales tax kept by the government in order to provide relief to the masses by not passing on the actual increase in petroleum prices as surge in international markets.

    The flat rate of sales tax is 17 per cent. However, the government decided to keep the rate of sales tax on petroleum products to the minimum level. According to SRO 1839i0/2022 issued on February 10, 2022, the sales tax rates have been reduced as: petrol 0.79 per cent; high speed diesel 3.17 per cent, kerosene oil 5.30 per cent and light diesel oil at zero per cent.

    READ MORE: FBR extends sales tax return filing up to February 25

    The fall in sales tax collection from supply of petroleum products resulted decline in collection of sales tax on domestic supply.

    The overall sales tax collection on domestic supplies fell by 6.2 per cent to Rs382.68 billion during the first half of the current fiscal year as compared with Rs408.13 billion in the corresponding period of the last fiscal year.

    However, the fall in sales tax collection domestic was offset by the massive growth in collection of sales tax on imports. The sales tax collection on imports surged by 75.4 per cent to Rs892.30 billion during the first half of the current fiscal year as compared with Rs508.61 billion in the corresponding half of the last fiscal year.

    READ MORE: FBR announces promotion of BS-16 Customs officers

    The growth in sales tax collection on imports can be attributed to sharp jump in imports and massive decline in rupee value.

    The import bill of the country registered a growth of 66.23 per cent to $40.65 billion during first half of the current fiscal year as compared with $24.45 billion in the corresponding half of the last fiscal year.

    READ MORE: FBR makes rules for sealing retail outlets

    Similarly, the Pak Rupee (PKR) fell sharply by Rs18.97 to the dollar during the first half of the current fiscal year. The rupee ended down by 12.04 per cent from Rs157.54 to the dollar on June 30, 2021 to Rs176.51 on December 31, 2021.

    The overall sales tax collection however, recorded 39.1 per cent to Rs1.27 trillion during the first half of the current fiscal year as compared with Rs916 billion in the corresponding half of the last fiscal year.

  • Share of sales tax collection increases to 43.7% in 1HFY22

    Share of sales tax collection increases to 43.7% in 1HFY22

    ISLAMABAD: The share of sales tax has increased to 43.7 per cent in total federal tax collection during first half (July – December) of current fiscal year (1HFY22) as compared with 41.6 per cent in the same half of the last fiscal year.

    According to biannual report issued by the Federal Board of Revenue (FBR) for the period July – December 2021/2022, showed that the share of direct taxes, which includes income tax, fell to 35 per cent during the half year under review as compared with 37.5 per cent in the same half of the last fiscal year.

    READ MORE: FBR extends sales tax return filing up to February 25

    The share of customs duty collection improved to 16.3 per cent during the first half of the current fiscal year as compared with 15.2 per cent in same half of the last fiscal year.

    Meanwhile, the contribution of federal excised duty collection declined to 5 per cent during July – December 2021/2022 as compared with 5.8 per cent in the same period of the last fiscal year.

    The total tax collection of the FBR during first half of the current fiscal year recorded 32.5 per cent growth to Rs2.92 trillion as compared with Rs2.2 trillion in the same half of the last fiscal year.

    READ MORE: FBR announces promotion of BS-16 Customs officers

    The collection of sales tax recorded an increase of 39.1 per cent to Rs1.275 trillion during the half year under review as compared with Rs917 billion in the corresponding half of the last year.

    The direct tax collection posted 23.6 per cent growth to Rs1.02 trillion during the first half of the current fiscal year as compared with Rs826 billion in the same half of the last fiscal year.

    The collection of customs duty posted 43 per cent growth to Rs477 billion during the half year under review as compared with Rs334 billion in the same half of the last fiscal year.

    READ MORE: FBR makes rules for sealing retail outlets

    Likewise, the federal excise duty collection posted 15.3 per cent growth to Rs146.3 billion during July – December 2021/2022 as compared with Rs127 billion in the corresponding period of the last fiscal year.

    The FBR issued refunds and rebates to the tune of Rs148.53 billion during the first half of the current fiscal year as compared with Rs111.3 billion in the same half of the last fiscal year.

    The issuance of sales tax refunds grew by 26 per cent to Rs123.5 billion during the period under review as compared with Rs98 billion in the same period of the last fiscal year.

    READ MORE: LTO Karachi facilitates Tier-1 retailers in POS integration

    However, the issuance of income tax refunds fell drastically by 29 per cent to Rs5.14 billion during the first half of the current fiscal year as compared with Rs7.28 billion in the same half of the last fiscal year.

  • Tax reduced on POL products to ease inflation: PM Imran

    Tax reduced on POL products to ease inflation: PM Imran

    Prime Minister Imran Khan on Friday said the government has reduced taxes and duties on petroleum products to ease inflationary pressure.

    The Prime Minister Imran Khan said Pakistan has been put on right course with record exports, tax collection and remittances by the expatriates.

    READ MORE: Pakistan’s sensitive price inflation jumps up 18%

    Addressing a public gathering in Mandi Bahauddin, he said the inflation impacting the common man and the government is trying to ebb away its pressure by reducing taxes and duties on petrol import.

    Imran Khan said for the first time, the government also granted overseas Pakistanis voting right, enhanced farmers’ income, ensured the timely payments to sugarcane farmers.

    READ MORE: Pakistan’s inflation climbs up 24-month high in January

    The prime minister said the government is bringing about an IT revolution in the country as 70% rise in IT exports has been recorded. He also said the government was providing interest free loans to the youth and Rs 1 million health insurance to every family in Punjab.

    READ MORE: January headline inflation may clock near 13%

    Imran Khan said this is just the beginning and we have to make Pakistan a welfare state with Sehat Card being the biggest step towards it.

    He said by March, Sehat Card will be available across Punjab for which provincial government has allocated 400 billion rupees.

    READ MORE: Mini-budget likely to push up inflation: SBP

  • Pakistan’s sensitive price inflation jumps up 18%

    Pakistan’s sensitive price inflation jumps up 18%

    ISLAMABAD: The inflation based on Sensitive Price Indicator (SPI) jumped up by 18 per cent by week ended February 17, 2022 as compared with the same week a year ago.

    According to data released by Pakistan Bureau of Statistics (PBS) on Friday, the year on year trend depicts an increase of 18.09 per cent, in Tomatoes (322.87 per cent), Electricity for Q1 (65.79 per cent), Garlic (60.98 per cent), LPG (55.11 per cent), Mustard Oil (48.44 per cent), Petrol (42.28 per cent), Cooking Oil 5 litre (41.81 per cent), Vegetable Ghee 1 Kg (39.13 per cent), Vegetable Ghee 2.5 Kg (38.97 per cent), Washing Soap (38.40 per cent), Pulse Masoor (37.19 per cent) and Diesel (32.26 per cent).

    READ MORE: Pakistan’s inflation climbs up 24-month high in January

    While major decrease observed in the prices of Chillies Powdered (36.30 per cent), Pulse Moong (28.43 per cent), Chicken (9.77 per cent), Sugar (5.72 per cent), Onions (3.84 per cent) and Potatoes (0.38 per cent).

    The SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country. SPI comprises of 51 essential items collected from 50 markets in 17 cities of the country.

    READ MORE: January headline inflation may clock near 13%

    The SPI for the current week ended on February 17, 2022 recorded an increase of 0.22 per cent. Increase in the prices of food items Garlic (10.53 per cent), Tomatoes (4.35 per cent), Bananas (4.28 per cent), Chicken (2.89 per cent), Cooked Daal (1.94 per cent) and Vegetable Ghee 2.5kg (1.08 per cent) and non-food items Petrol (8.12 per cent), Diesel (6.52 per cent), Match Box (2.17 per cent) and Long Cloth (1.50 per cent) was observed with joint impact of (1.21 per cent) into the overall SPI for combined group of (0.22 per cent).

    READ MORE: Mini-budget likely to push up inflation: SBP

    On the other hand, decrease is observed in the prices of Chillies Powdered (5.41 per cent), Eggs (5.31 per cent), Electricity for Q1 (5.20 per cent), Onions (1.39 per cent), Potatoes (0.89 per cent), Gur (0.82 per cent), Sugar (0.59 per cent), Wheat Flour (0.27 per cent), LPG (0.17 per cent), Pulse Moong (0.11 per cent), and Pulse Mash (0.08 per cent).

    During the week, out of 51 items, prices of 28 (54.90 per cent) items increased, 11 (21.57 per cent) items decreased and 12 (23.53 per cent) items remained stable.

    READ MORE: Headline inflation rises by 12.3% in December 2021

  • Pakistan spends Rs217 billion to import mobile phones

    Pakistan spends Rs217 billion to import mobile phones

    ISLAMABAD: Pakistan has spent Rs217 billion to import mobile phones during first seven months (July – December) 2021/2022, according to data release by Pakistan Bureau of Statistics (PBS).

    The import of mobile phones grew by 17.25 per cent when compared with Rs185 billion in the first seven months of the fiscal year 2020/2021.

    READ MORE: FBR issues updated rates of duty, taxes on mobile phones

    The growth in the import of mobile phones may be attributed to depreciation in rupee value against the dollar.

    The rupee weakened by Rs17.85 or 11.33 per cent to the dollar when compared Rs157.54 on June 30, 2021 with Rs175.39 as on February 17, 2022.

    READ MORE: Regulations needed for used mobile phones’ accessories

    The local currency recorded all-time low of Rs178.24 to the dollar on December 29, 2021.

    In dollar term, the import of cellphones recorded a growth of 12 per cent to $1.27 billion during first seven months of the current fiscal year as compared with $1.13 billion in the corresponding months of the last fiscal year.

    READ MORE: FBR collects mobile phone tax, PTA clarifies

    However, the import of mobile phones recorded a decline of 8.68 per cent to $179.77 million in the month of January 2022 when compared with $197 million in the same month of the last year.

    The decline may be attributed to production of mobile phones locally.

    READ MORE: FBR increases income tax to 15% on cellular services

  • Foreign investment surges by 176% during July – January

    Foreign investment surges by 176% during July – January

    KARACHI: The overall inflow of foreign investment in the country recorded 176 per cent during first seven months (July – January) 2021/2022 due to the inflows of debt securities to the tune of $1.057 billion received in January 2022, according to data released by the State Bank of Pakistan (SBP) on Thursday.

    The total foreign investment increased to $1.817 billion during the first seven months of the current fiscal year as compared with $659 million in the corresponding months of the last fiscal year.

    READ MORE: Pakistan’s foreign investment surges by 73% in 5 months

    The net foreign private investment is showing increase of 5.7 per cent to $859 million during July – January 2021/2022 as compared with $812.4 million.

    The net inflow of foreign direct investment (FDI), a major component of foreign private investment, into Pakistan has recorded 11.3 per cent during first seven months (July – January) of 2021/2022.

    READ MORE: Carrefour enhances Pakistan investment to Rs10.5 billion

    The net inflow of the foreign direct investment increased to $1.17 billion during first seven months of the current fiscal year as compared with $1.05 billion in the corresponding period of the last fiscal year.

    The increase in net inflow of FDI can be attributed to significant contraction in outflow during the period. The outflow fell by 40 per cent to $468.7 million during the period under review as compared with the outflow of $786 million in the same period of the last fiscal year.

    READ MORE: Jazz’s investment in Pakistan crosses $10 billion

    However, the portfolio investment, the other component of foreign private investment, recorded a 31 per cent decline during first seven months of the current fiscal year. The outflow under foreign portfolio investment recorded at $308 million during July – January 2021/2022 as compared with outflow of $236 million in the corresponding period of the last fiscal year.

    READ MORE: Focus on increasing investment in export industry: PM

  • FBR makes rules for sealing retail outlets

    FBR makes rules for sealing retail outlets

    ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday notified rules for sealing and de-sealing business premises of Tier-1 retailers.

    In this regard the FBR issued SRO 252/2022 to make amendments in Sales Tax Rules, 2006. Through the amendments, a new chapter has been introduced namely, ‘Procedure for Sealing and De-sealing of Business Premises of Tier-1 Retailers.’

    READ MORE: FBR announces prize winners in second POS invoice balloting

    The FBR said that the new chapter shall apply to the following persons, namely:

    1. Any person who is integrated for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the board or its computerized system, conducts such transactions in a manner so as to avoid monitoring, tracking, reporting or recording such transactions, or issue an invoice which does not carry the prescribed invoice number or barcode or QR code or bears duplicate invoice number or counterfeit barcode or QR code; and

    2. Any person who is required to integrate his business as stipulated under sub-section (9A) of Section 3 read with sub-section 43A of Section 2 but fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under the law and rules made thereunder.

    READ MORE: FBR announces winners of first POS prize draw

    According to procedure for sealing of business premises of integrated Tier-1 retailers, the business premises of such person shall be liable to be sealed in the manner prescribed under:

    1. The commissioner Inland Revenue, in whose territorial jurisdiction the business premises of Tier-1 retailer is located, may initiate proceedings for sealing of the business premises on the basis of information that such person was found involved in the issuance of tax invoice that does not carry the invoice number or QR Code as prescribed, bears duplicate invoice number or counterfeit QR Code, the invoice is defaced, or there is any other evidence of tempering;

    2. The information referred may be required in the following manner:

    (i) Reported as unverified on ‘Tax Asaan’ application or POS Dashboard;

    (ii) Physically available or acquired through mystery shopping as referred in sub-section 2 of section 56 of the Sales Tax Act, 1990; or

    (iii) Through any other reliable source.

    3. The Commissioner Inland Revenue concerned shall verify any invoice through invoice number or QR code before declaring it unverified;

    4. Where the commissioner Inland Revenue has evidence as provided, that a Tier-1 retailer has either issued three unverified invoices in a day or five unverified invoices in seven days against a single STRN, the Commissioner Inland Revenue shall seek the approval of the Chief Commissioner Inland Revenue in writing for sealing of the retailer’s business premises besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises:

    Provided in case the unverified invoices belong to a business premises of Tier-1 retailer having jurisdiction in some other filed formation, the commissioner Inland Revenue concerned shall seek approval from the Chief Commissioner Inland Revenue in whose jurisdiction the integrated Tier-1 retailer falls besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises;

    (5) The Chief Commissioner Inland Revenue, in whose jurisdiction the integrated Tier-1 retailer falls, shall on receipt of request for approval, issue an order in writing for allowing or disallowing the sealing of such business premises after recording the reasons therein, and, in case of allowing sealing of business premises, shall also notify the team for carrying out the process of sealing immediately:

    Provided where the jurisdiction of Tier-1 retailer falls in some other field formation, the concerned Chief Commissioner shall request the FBR for notification of the team;

    (6) The Chief Commissioner Inland Revenue in whose jurisdiction the integrated Tier-1 retailer falls shall decide whether one or more branches are to be sealed depending on the unverified invoices issued by the respective branches; and

    (7) The sealing order shall be communicated by the concerned Chief Commissioner Inland Revenue to the Member (IR-Operations) for information and a copy thereof shall be sent to Chief (POS) for record.

    Through the instant SRO 252/2022 the FBR also issued procedures for sealing of business premises of non-integrated Tier-1 retailers and de-sealing of business premises of integrated Tier-1 retailers.

  • Pakistan raises petrol price to record high at Rs160/liter

    Pakistan raises petrol price to record high at Rs160/liter

    ISLAMABAD: Pakistan on Tuesday sharply increased the price of petrol to a new record high level at around Rs160 per liter in the wake of surge in international oil prices.

    According to a statement issued by the Finance Division, the government has announced a massive increase in all the petroleum products effective from February 16, 2022.

    READ MORE; Petroleum prices kept unchanged for next fortnight

    The government increased the rate of petrol by Rs12.03 to Rs159.86 from Rs147.83. The rate of high speed diesel has been enhanced by Rs9.53 to Rs154.15 from Rs144.62. The government increased the price of kerosene oil by Rs10.08 to Rs126.56 from Rs116.48. Similarly, the rate of light diesel oil has been increased b Rs9.43 to Rs123.97 from Rs114.54.

    READ MORE: Pakistan’s petrol price rises to record high at Rs147.83

    The finance division in the press release said that the price of petroleum products were showing drastic increase in the international markets and presently are at the highest level since 2014.

    “Despite the unabated increase since the beginning of the year, Prime Minister Imran Khan deferred the last review of petroleum products prices on January 31, 2022 and advised against the summary of Oil and Gas Regulatory Authority (OGRA).”

    READ MORE: Prices of all POL products increased to wish New Year

    In order to provide utmost relief to the consumers, the government levied zero per cent sales tax and reduced petroleum levy rate against the budgeted targets.

    Resultantly, the government is bearing the revenue loss of Rs35 billion (fortnightly) on account of budgeted to existing petroleum levy and sales tax rates.

    READ MORE: Petrol price reduces to Rs140.82 per liter

    The finance division said that in the fortnightly review of petroleum products prices, the Prime Minister has considered the recommendations to increase the prices of petroleum products in line with change in the international oil prices. “Despite the increase in the prices of petroleum products, petroleum levy and sales tax have been kept to the minimum,” it added.

  • PM Imran launches 2nd phase of Raast payment system

    PM Imran launches 2nd phase of Raast payment system

    KARACHI: Prime Minister Imran Khan on Tuesday launched the second phase of Raast, a Person-to-Person (P2P) instant payment system, in a ceremony held in Islamabad, the State Bank of Pakistan (SBP) said in a statement.

    The central bank said that Raast is a flagship initiative of the State Bank of Pakistan (SBP) is a payment system platform that enables various types of transactions among different stakeholders such as organizations, businesses and persons.

    READ MORE: SBP launches free P2P money transfer under Raast

    The objective of this initiative is to promote digitization and financial inclusion in the country. In the first phase of Raast, launched in January 2021, transactions from organizations to persons, generally referred to as Bulk Payments, was enabled. The second phase is designed to facilitate Person-to-Person (P2P) transactions under Raast.

    The Prime Minister congratulated Governor SBP Dr. Reza Baqir and his team for the successful completion of the second phase. He was addressing a gathering of Ministers, Presidents and CEOs of Banks, SBP officials and other distinguished guests at the Prime Minister House in Islamabad.

    READ MORE: CDC successfully processes dividends through RAAST payment gateway

    He appreciated that the newly launched system will enable ordinary people to execute digital payments instantly, securely, and conveniently without paying any fee and added that Raast will open doors of further innovation for the economy and particularly the financial sector.

    He expressed his confidence that through digitization of the economy, the over 220 million population could be converted into an asset by ensuring their financial inclusion.

    Speaking on the occasion, Minister for Finance and Revenue, Shaukat Tarin appreciated the SBP for the progress made in digitization and expressed his confidence that the forthcoming phases of Raast including payment to merchant will play an important role in facilitating the masses in their financial transaction thus increasing their valuable contribution in the economy.

    Governor SBP Dr. Reza Baqir welcomed the Prime Minister on the launch event and expressed gratitude for his commitment and support to the SBP initiatives for promoting digitization and financial inclusion in the economy. Governor Baqir, while highlighting the key features of Raast, explained that individuals can use this platform in their transactions just like cash and they will not have to pay any fees or charges for using this payment system. More importantly, Raast is secure and convenient and free of risks compared to cash.  Raast is easy and simple to use as it allows connecting bank account to user’s mobile number, called Raast ID. The facility can be used on mobile apps and internet banking portals of banks. For those people who do not have a mobile phone or facility of internet banking, Raast P2P service is also available in bank branches.

    To avail Raast, customers should check SBP’s Raast landing page to see if their bank is already offering Raast—currently more than 18 banks, processing majority of retail payment transactions, are offering Raast services —and register one time for Raast in their bank’s mobile app, through internet banking or by visiting a bank branch. Remaining banks are expected to be on boarded with Raast in the coming weeks. Customers may also see the following YouTube video tutorial on registering and using Raast: https://www.youtube.com/watch?v=wRZC0M1d-K0

    Dr. Baqir explained that Raast is Pakistan’s first instant payment system established in accordance with the National Payment Systems Strategy, which was prepared by State Bank of Pakistan and launched by the President of the World Bank in 2019 when he visited Pakistan. This project is a major initiative of State Bank of Pakistan, and with the launch of Raast, Pakistan is now in an exclusive list of countries who have these state of the art instant payment system. He assured that SBP is committed to launching more innovative features in Raast to further promote digitization and financial inclusion.

    On SBP’s efforts to promote digitalization of payments and economy, Governor SBP highlighted that in January SBP issued digital bank licensing framework that provides flexible requirements to setup digital banks in Pakistan. For now, only five licenses for Digital Banks will be issued and interested parties can apply for a license until March 31, 2022.

    READ MORE: PM Imran Khan announces food subsidy package

    It may be noted that during fiscal year 2021, 1.2 billion transactions of USD500 billion value were processed through retail e-Banking channels. These transactions showed year-on-year growth of 30.6 per cent in volume and 31.1 per cent in value.