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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.

  • Rupee makes sharp recovery; ends at Rs177.51 to dollar

    Rupee makes sharp recovery; ends at Rs177.51 to dollar

    KARACHI: The Pak Rupee (PKR) made a sharp recovery of 73 paisas against the dollar on Thursday owing to sufficient supply of the foreign currency in the market.

    The rupee ended Rs177.51 to the dollar from previous day’s closing of Rs178.24 in the interbank foreign exchange market.

    READ MORE: Rupee falls to new historic low of Rs178.24 to dollar

    The last day’s closing was the lowest level of the rupee.

    Currency experts said that the market witnessed high dollar demand earlier in the day and the rupee fell to intraday low of Rs178.35.

    However, they said that the State Bank of Pakistan (SBP) intervened to support the local currency. They claimed sufficient liquidity provided by the central bank to meet the foreign payments.

    READ MORE: Bank holiday on January 03, 2022 announced

    The experts said that the action was taken to support the local unit and keep the value below the lowest level by end the year. Today was second last trading of the year.

    They said that due to year end the demand for dollar remained high as corporate buyers and importers were seen active during the day.

    READ MORE: Pakistan’s forex reserves decline by $395 million in week

    Since the start of the current fiscal year the rupee has witnessed sharp decline owing to large import bill and widening of current account deficit.

  • SBP introduces Shariah compliant OMO injections

    SBP introduces Shariah compliant OMO injections

    KARACHI: The State Bank of Pakistan (SBP) on Wednesday introduced Shariah Compliant Standing Ceiling facility and Open Market Operations (OMO) injections for Islamic banking Institutions (IBIs).

    As the size of the Islamic banking industry is increasing, SBP recognizes the need to introduce Shariah compliant liquidity facilities for IBIs. With a view to bring IBIs at par vis-à-vis their conventional counterparts in terms of liquidity management avenues, and to enhance SBP’s tools for managing market’s liquidity as part of its monetary policy objective, SBP has introduced the aforementioned facilities.

    READ MORE: Bank Alfalah tops in house financing under MPMG

    The structure and broad features of these facilities are as under:

    Shariah Compliant Standing Ceiling Facility is a Mudarabah based Financing Facility (MFF) whereby SBP will provide financing to IBIs on an overnight basis against Shariah compliant collateral. IBIs shall place the funds received from SBP in a special pool consisting of high quality assets. The MFF will be offered at an ‘Expected Rate’ – equivalent to conventional overnight reverse repo rate – based on a Profit Sharing Ratio agreed between the SBP and IBI at the onset of the transaction.

    For Shariah Compliant Open Market Operations (Injections), Mudarabah mode of financing will be used. It would be pertinent to mention here that this open market operations (OMO) facility will currently be available for ‘injection’ i.e. provision of liquidity purposes only.

    READ MORE: RDA: SECP exempts banks from obtaining license

    Similar to conventional OMOs, SBP will be conducting Shariah Compliant OMOs (Injections) based on market liquidity conditions through a multiple price competitive bidding process for tenors as announced by SBP from time to time, against collateral. Once the expected rate of return is finalized through a competitive bidding process, the funds provided by SBP shall be invested in a pool of high quality assets by the respective IBI. SBP and IBI shall agree a Profit Sharing ratio at the onset of the transaction.

    Islamic banking industry in Pakistan has become systemically an important component of the banking industry registering remarkable growth over the last two decades. Currently there are five (5) full-fledged Islamic banks and seventeen (17) conventional banks operating with standalone Islamic banking branches offering a wide array of Shariah compliant financial solutions.

    READ MORE: Meezan Bank starts Islamic financing scheme for SMEs

    At the end of June 2021, the market share of the Islamic banking industry assets and deposits in the overall banking sector stood at 17 per cent and 18.7 per cent respectively and the branch network of Islamic banking institutions comprised over 3,583 branches and 1,562 windows.

    Introduction of aforesaid liquidity facilities will bring Islamic Banking industry at par with their conventional counterparts and enable them to effectively manage their short-term liquidity.

    This would strengthen financial intermediation by IBIs and enable them to offer better returns and rates to their customers on deposits and loans. Further, introduction of proposed facilities will also strengthen monetary policy transmission mechanism & enhance the effectiveness of monetary policy implementation by SBP to achieve the ultimate objective of price stability.

  • Rupee falls to new historic low of Rs178.24 to dollar

    Rupee falls to new historic low of Rs178.24 to dollar

    KARACHI: The Pak Rupee (PKR) fell to new historic low of Rs178.24 to the dollar on Wednesday owing to higher demand for import and corporate payments.

    The rupee fell by five paisas against the dollar from last day’s closing of Rs178.19, the previous record low of the rupee, in the interbank foreign exchange market.

    Currency experts said that due to last days of month of December and year closing the dollar demand was high for import and corporate payments.

    The experts said that the rising prices of oil in international markets and corporate payment pushed the demand for dollars.

    They said that surge in import bill and widening current account deficit are major challenges for the rupee in coming days.

    The import bill of the country surged to $33 billion during the first five months (July – November) 2021/2022.

    This resulted in widening of trade deficit resulted in $7 billion current account deficit during the first five months (July – November) 2021/2022.

    READ MORE: SBP sets limits for sale of foreign exchange to individuals

  • Annual collection of capital gain tax falls by 26%

    Annual collection of capital gain tax falls by 26%

    Official data reveals a significant decline of 26% in the annual collection of Capital Gain Tax (CGT) from the disposal of securities during the fiscal year 2020/2021.

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  • FBR deputes officials at jewelry shop for tax monitoring

    FBR deputes officials at jewelry shop for tax monitoring

    ISLAMABAD: The Federal Board of Revenue (FBR) has deputed officials of Inland Revenue (IR) at a jewelry shop on suspects of underreporting and non-compliance of integration.

    The FBR invoked Section 40B of the Sales Tax Act, 1990, and deputed tax officials at a retail outlet of a leading jeweler in Lahore.

    The FBR issued orders for action under section 40B of the Sales Tax Act, 1990 on DAMAS Jewelers, Lahore which is a large retail outlet of gems and jewelry, located on MM Alam Road, Lahore.

    READ MORE: Point of sale machines allowed tax credit

    The retail outlet was required to integrate with the POS system but despite repeated reminders, it didn’t integrate its business with the Point of Sale System (POS) of FBR. It was prima facie involved in underreporting of the sales, causing substantial loss to the national exchequer.

    It is important to mention that FBR has decided to impose Section 40B at retail outlets of Tier-1 retailers which either haven’t integrated with POS system or continue to flout the law by engaging in fraudulent sales despite opting for integration. The law must be implemented by all means possible.

    READ MORE: Metro Pakistan integrates point of sale with FBR

    Therefore, a team of the Zone-II, Regional Tax Office, Lahore reached the business premises of the Registered Person on 25-12-2021 for action U/S 40B, and started the real-time monitoring of its Sales.FBR will continue with such actions to ensure that the POS integration of all Tier-1 retailers is ensured in letter and spirit.

    This innovative digital initiative aims at monitoring real-time sales and thereby making sure that the tax collected from buyers on the point of sales is deposited in the state exchequer.

    READ MORE: Persons may be appointed for filing e-return

    It is pertinent to mention that FBR has launched a comprehensive campaign on both electronic and print media to educate customers about the scope and significance of the POS system and a lucrative prize scheme worth Rs.53 Million. The lucky 1007 winners will be given away prizes every month through a computer ballot to be held on 15th of every month at FBR Headquarters, Islamabad.

    The first lucky draw will be conducted on January 15, 2022.

    READ MORE: FBR announces first POS prize scheme draw on Jan 15

  • Pak Rupee hits fresh low at Rs178.19 to dollar

    Pak Rupee hits fresh low at Rs178.19 to dollar

    KARACHI: The Pak Rupee hit a fresh low at Rs178.19 to the dollar on Tuesday after falling two paisas in the interbank foreign exchange market.

    The local currency further declined from the last day’s closing of Rs178.17, which was the previous historic low.

    The foreign exchange market witnessed dollar demand for import and corporate payment during the day. However, banks assured dollar supply against the demand, currency experts said.

    They said that following restriction imposed by the central bank on buying of the foreign exchange by individuals from open market, the fall in rupee value was slowed down but continued.

    The State Bank of Pakistan (SBP) last week imposed curbs on foreign exchange buying by individuals from the open market in order to discourage speculative gains. As per restrictions an individual can buy a maximum of $10,000 per day and $100,000 in a year.

    The currency experts said that rising import bills and widening of the current account deficit remained a major threat to rupee value.

    READ MORE: SBP sets limits for sale of foreign exchange to individuals

  • FBR collects Rs11 bn income tax on prize bond winning

    FBR collects Rs11 bn income tax on prize bond winning

    ISLAMABAD: The Federal Board of Revenue (FBR) has collected around Rs11 billion as income tax on the amount paid from winning of prize bonds during fiscal year 2020/2021, according to official data released on Monday.

    The collection of income tax grew by only one per cent during the fiscal year 2020/2021 as compared with Rs10.89 billion in the preceding fiscal year.

    READ MORE: SBP directs banks to accept bearer prize bonds

    On the other hand, the income tax collection on winning from prizes, raffles, or lottery has increased by 97 per cent to Rs518 million during the fiscal year 2020/2021 as compared with Rs263.7 million in the preceding fiscal year.

    The FBR collects income tax under Section 156 of the Income Tax Ordinance, 2001.

    According to the FBR, every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, the prize offered by companies for promotion of the sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in Division VI of Part III of the First Schedule.

    READ MORE: History of Prize Bonds in Pakistan

    Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.

    The tax-deductible under sub-section (1) or collected under sub-section (2) shall be a final tax on the income from prizes or winnings referred to in the said sub-sections.

    READ MORE: Income tax on prize bonds, lottery winning

    The tax rate for Tax Year 2022 is:

    (1) The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 per cent of the gross amount paid.

    (2) The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, a prize offered by a company for promotion of the sale, shall be 20 per cent of the gross amount paid.

    The total income tax collection under Section 156 of the Income Tax Ordinance, 2001 during the fiscal year 2020-2021 was Rs11.42 billion as compared with Rs11.16 billion in the preceding fiscal year.

    READ MORE: 4th draw of Rs25,000 premium prize bonds announced

  • Customs duty collection from imported vehicles surges by 95%

    Customs duty collection from imported vehicles surges by 95%

    Official data released on Monday indicates a remarkable upswing in the collection of customs duty from imported vehicles during the fiscal year 2020/2021, reflecting a staggering 95 percent growth, reaching Rs111 billion. This surge is in stark contrast to the Rs56.85 billion recorded in the preceding year.

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  • FBR launches sales tax return filing through single portal

    FBR launches sales tax return filing through single portal

    ISLAMABAD: The Federal Board of Revenue (FBR) on Monday said the sales tax return for the month of December 2021 will be filed through single portal.

    The FBR in a memorandum said that sales tax return for the tax period of December 2021, which is scheduled to be filed in January 2022, will be filed through the Single Sales Tax Portal.

    READ MORE: Power of the Board and Commissioner to call for records

    In order to allow the registered persons to familiarize themselves with the new system, the uploading of sales tax invoice of December 2021 has been enabled, the FBR said. The old sales tax return will not be available for filing the return for December 2021, it added.

    Therefore, all sales tax registered persons and their representatives have been advised to familiarize themselves with the single sales tax portal.

    READ MORE: Inland Revenue officers promoted to BS-20

    The single portal for sales tax returns has been launched to facilitate taxpayers, promote ease of doing business and reduce compliance cost.

    The FBR said that through this portal, sales tax registered persons shall be able to file a single sales tax return instead of having to file separate returns to the FBR and each of the different provincial sales tax authorities.

    READ MORE: PM to launch single sales tax portal this month

    By filing sales tax on the portal, it will save time and effort besides simplifying the return filing process, the FBR added.

    The portal will minimize data entry and address the issue of data and calculation errors. It will also automatically apportion input tax adjustment as well as payments across the sales tax authorities, eliminating the need for reconciliation and payment transfers.

    The single portal will encourage harmonization of tax procedures, definitions and principals between the federal and provincial governments, which will promote national unity, the FBR said.

    READ MORE: Single sales tax portal to start functioning by month-end

  • Dollar hits new record high at PKR 178.17

    Dollar hits new record high at PKR 178.17

    KARACHI: The US dollar recorded a new record high against Pak Rupee (PKR) at Rs178.17 on Monday. The rupee ended by four paisas against the dollar from last Friday’s closing of Rs178.13 in the interbank foreign exchange market.

    The dollar previously recorded the highest level at Rs178.15 on December 22, 2021.

    Currency experts said that the dollar demand was high due to opening of market after two weekly holidays. They said that year-end demand for corporate payment also put pressure on rupee value.

    They said that the widening of trade deficit and current account deficit are major threats to rupee stability.

    Pakistan’s current account deficit has ballooned to $7 billion during the first five months (July – November) 2021/2022. The current account posted a surplus of $1.87 billion in the same period of the last fiscal year.

    The trade deficit widened by 112 per cent to $20.65 billion during the period under review as compared with $the deficit of 9.72 billion in the same period of the last fiscal year.

    Rupee eases by one paisa against dollar