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The FBR said that the Finance Act, 2019 added sub-section 6 to the Section 8B of the Sales Tax Act, 1990 whereby a Tier-1 Retailer who did not integrate its retail outlet in the manner prescribed under sub-section 9A of Section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for the period would be reduced by 15 per cent. The figure 15 per cent has been raised to 60 per cent through Finance Act, 2021.
The FBR further said that in order to operationalize the important provision of the law, a system-based approach has been adopted whereby all Tier-1 retailers, who are liable to integrate but have not yet integrated, with effect from July 2021 (Sales Tax Returns filed in August, 2021) are to be dealt with as per the procedure laid down in STGO No. 1 of 2022 issued on August 3, 2021.
Through the latest STGO No. 04 of 2022, a list of 608 identified Tier-1 retailers has been placed on the FBR’s portal allowing them to integrate with the FBR’s system by November 10, 2021 and the procedure of exclusion from this list of 608 identified Tier-1 retailers shall apply as laid down in Para 2 STGO 1 of 2022 dated August 3, 2021.
Upon filing of sales tax return for the month of October 2021 all notified Tiler-1 retailers having yet integrated, the input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount.
ISLAMABAD: The government on Thursday night announced an increase of Rs8.03 to Rs145.82 per liter in the price of petrol effective from November 05, 2021.
The price has been increased from previous high of Rs137.79.
Similarly, the price of high speed diesel has been increased by Rs8.14 to Rs142.62 from Rs134.48.
The rate of kerosene oil has been increased by 6.27 per liter to Rs116.53 from Rs110.26. Likewise, the price of light diesel oil has been increased by Rs5.72 per liter to Rs114.07 from Rs108.35.
A notification issued by the Finance Division stated that on November 01, 2021, the prime minister had not agreed with the proposals worked out by the Oil and Gas Regulatory Authority (OGRA) and the finance division directed to maintain the prices as notified on October 16, 2021.
It is pertinent to mention that maintaining the October 16, 2021 petroleum prices had some underlying concerns for cash flow issues due to short recovery of the cost, according to the statement.
It is important to note that in the previous petroleum prices, already a significant relief was provided to the consumers. The government is cognizant of its responsibility to provide maximum relief to the consumers.
“This has dented the petroleum levy budget of Rs152.5 billion during July – September, 2021 as compared to Rs20 billion realized only,” it said.
Foregoing in view, prices of petroleum products have been increased partially as compared to the prices being worked out by the OGRA. If the government had accepted OGRA’s recommendations, the new prices would have been much higher.
Infact, the government has absorbed the bulk of the pressure after making adjustment after making adjustment in the sales tax and petroleum levy. The collection of petroleum levy is far short of its fixed target for the first quarter of the fiscal year 2021/2022, it added.
KARACHI: The exchange companies are required to deploy biometric verification system (BVS) for transactions of foreign currencies from November 6, 2021.
“All exchange companies are advised to deploy BVS as provided by NADRA at their outlets for biometric verification after November 05, 2021,” the State Bank of Pakistan (SBP) said in a communication on Thursday.
The SBP said that exchange companies were required to implement the BVS latest by October 22, 2021. Towards this, State Bank had requested National Database Registration Authority (NADRA) to facilitate the exchange companies in the implementation of BVS.
“However, given the technical challenges currently faced by the exchange companies (EC Sector), NADRA proposed to offer an android based BVS for exchange companies.”
The State Bank on request of the Exchange Companies Association of Pakistan (ECAP) allowed the exchange companies to accommodate its customers by using the services of another facility of NADRA named e-Sahulat till the implementation of android based BVS i.e. November 05, 2021.
The SBP said that it forwarded the technical requirements, received from NADRA, to exchange companies with an objective to ensure implementation of BVS with the given timelines. The SBP further stated that any technical and financial matter related to implementation of BVS is the sole discretion of NADRA and respective exchange companies. “Therefore, ECAP or individual exchange company may like to approach NADRA directly for any technical / financial issues, regarding implementation and procurement of systems, devices etc.”
The SBP advised all exchange companies to deploy BVS as provided by NADRA at their outlets for biometric verification after November 05, 2021. However, any relaxation / extension in the timeline shall only be allowed to the companies that will approach the SBP with genuine reasons along with an explicit time bound implementation plan.”
The SBP said NADRA has informed that the android-based BVS could also be integrated with the core business application of the exchange companies. “Therefore, all exchange companies are required to continue their coordination with NADRA to ensure that the integrated system is implemented within the stipulated timeline of June 30, 2022,” the SBP added.
ISLAMABAD – A recent statement by State Bank of Pakistan (SBP) Governor Dr. Reza Baqir has drawn sharp criticism from senators, who termed it “irresponsible” and called for immediate clarification. The contentious statement pertains to the continuous depreciation of the Pakistani Rupee (PKR) against the US Dollar.
ISLAMABAD: Prime Minister Imran Khan on Wednesday announced food subsidy package of Rs120 billion providing 30 percent discount at ghee, flour and pulses.
The prime minister, in his televised address to the nation, said 20 million families would benefit from the subsidy package to be funded jointly by the federal and provincial governments.
Under the package, the beneficiaries would avail a 30 per cent discount on the said three food commodities for next six months.
He said the subsidy package was apart from the ongoing different programs under Ehsaas Initiative worth Rs 260 billion affecting 120 million families.
The prime minister particularly thanked the Ehsaas team for compiling the national database of households to enable the government provide direct subsidy to the entitled families.
“Today, we have a data and now I am in the position to announce… country’s biggest ever welfare program,” he remarked.
The prime minister also announced Rs 1400 billion for Kamyab Pakistan Program aimed at providing interest free business loans to the entitled four million families.
The package consists of interest free loans for house construction, Rs 0.5 million each loan for farmers and businesses besides skill training to a member of the entitled family.
He said under Kamyab Jawan Program had so far given Rs 30 billion loan to 22,000 businesses. The program also featured a program to provide six million scholarship and stipends to the students.
Calling it his dream project, the prime minister the Health Insurance Card has been extended to whole of KP province and would be replicated in Punjab, AJK, GB and federal capital by March next year.
The prime minister also asked the Sindh government to launch the program to provide Rs 1 million health insurance cover to every family.
Imran Khan said the government had inherited a Pakistan with the biggest ever fiscal deficit, foreign debt burden, heaviest mark up, reserves touching the lowest mark, and the kitty with no money to pay back debts.
He thanked Saudi Arabia, UAE and China which supported the country in difficult time to save the country from default.
He said it took almost a year to stabilize the economy which unfortunately followed the outbreak of COVID pandemic – the biggest ever crisis the world faced during last century.
The prime minister felt proud for his team in the NCOC comprising top doctors, cabinet members and Pakistan Army which took bold decisions based on the data and made the country steered through the crisis effectively.
“On one side it was the fear of overcrowding of hospitals like India while the other fear was that the lockdown would destroy the economy. Pakistan opted for the middle course which also involved risks,” he said.
The prime minister recalled that he was pressured to impose India-like blanket lockdown but he said Pakistan was among few countries which successfully sailed through the situation which was also acknowledged by the World Bank, World Health Organization, World Economic Forum as well as the international media including The Economist magazine.
Giving an overview of the COVID impact on world economy, the prime minister the United States spent $4,000 billion to support its economy while Pakistan could only scrape $8 billion to avert the burden of unemployment and support the industry, construction and agriculture.
The prime minister said owing to the government’s prudent policies, the country witnessed a 13.8 per cent growth in rice production, pulses 8 per cent, sugarcane 22 per cent, wheat 8 per cent and cotton 81 per cent growth.
Moreover, an additional Rs1100 billion went to the farmers which was manifested by the record sale of motorbikes, tractors and urea.
He said following the incentives announced by the government, the construction projects worth Rs 600 billion were going on in the country and large scale manufacturing achieved record growth. Moreover, the profit of engineering sector increased by 350 per cent, textile sector 160 per cent, automobiles 138 per cent, cement 113 per cent and oil and gas 75 per cent.
Besides, the country’s tax collection also grew by 37 per cent as the government had already surpassed the set target.
“Our (economic) indicators are on right course. IT achieved 47 per cent growth last year and this year it will touch 75 per cent. This is good news for youth,” he remarked.
The prime minister said no doubt the inflation was an issue but instead of merely criticizing like opposition, the media should also teach the people about the worldwide inflation.
Quoting the Bloomberg Commodity Price Index, the prime minister said commodities’ prices grew by 50 per cent in a year against just 9 per cent in Pakistan.
He said Turkey, US, China and Germany had been facing highest inflation. The gas prices surged by 116 per cent in US, 300 per cent in Europe but Pakistan had made no increase except for the one being imported.
He said oil prices in the global market had increased by 100 per cent but Pakistan shifted only 33 per cent of the burden. Even in India oil prices surged to Rs 250, Bangladesh 200 while it was yet at Rs138 in Pakistan.
The government avoided to shift burden from the masses which otherwise could bring in additional Rs 450 billion revenue to the government.
However, the prime minister said the government would have to increase the oil prices which otherwise would lead to swelling the deficit.
Giving a comparison of food commodities in the region, the prime minister said flour rate was Rs83per kg in India while Pakistan had half of the world’s average price. Moreover, Daal Moong was being sold at Rs338 in India against Rs 162 in Pakistan.
Despite that, the government decided to launch the subsidy program in order to avert the burden of inflation from the people, he remarked.
The prime minister particularly appealed the industrialists and businessmen to take special care of labour class and give them a pay raise considering the inflation.
Commenting on the opposition’s criticism against the government, the prime minister committed to bring down prices of food commodities to half if the opposition leaders’ families brought back even half of the money to the country they had looted over last three decades.
According to the details of the subsidy package provided by the PM Office, the federal cabinet had approved the program on Tuesday which would affect 53 per cent of the country’s population.
Under the package, a subsidy of Rs. 1,000 a month would be given to each of the 20 million families with a poverty score of less than 39 and an income of Rs. 31,500 per month.
Ehsaas has developed a digitally enabled mobile point of sale system in collaboration with National Bank of Pakistan (NBP) to serve beneficiaries through a network of Kiryana stores designated by NBP, all over the country.
This system will digitize parts of the retail sector; there will be use of real time data for decision making. This process will help make beneficiaries and storeowners more digitally adept.
The participating Kiryana store owners will be required to open bank accounts which will help further increase financial inclusion and settlement payments made through RAAST will help increase scale of digital transactions in Pakistan.
For online registration of beneficiaries, Ehsaas will open a registration portal next week.
In interest of transparency, the registered Kiryana stores and beneficiaries will undergo a rigorous verification process to minimize the incidence of fraud.
The federal government and all participating federating units will share fiscal resources in the ratio of 35/65.
The governments of Punjab, Khyber Pakhtunkhwa, Gilgit Baltistan and AJK have already agreed to participate in the programme.
In other federating units, federal share of subsidy worth Rs. 350 per month will be given for each eligible household.
KARACHI: State Bank of Pakistan (SBP) has selected eight banks for lending collateral-free loan to Small and Medium Enterprises (SMEs), a statement said on Wednesday.
Governor State Bank of Pakistan, Dr. Reza Baqir announced that banks have shown overwhelming response to an innovative financing scheme for collateral free lending to SMEs introduced by the State Bank and supported by the Government of Pakistan.
This is the first time a comprehensive collateral free SME lending scheme has been introduced by SBP in the country.
Out of 20 banks that competed for participating in this scheme, 8 banks under four categories have been selected on the basis of highest amount of finance and highest number of SME clients to be served.
These categories include large banks, mid-sized banks, small banks, and banks in collaboration with fintechs.
The winning banks are Habib Bank Ltd, United Bank Ltd, Allied Bank Ltd, Meezan Bank Ltd, Bank Alfalah Ltd, The Bank of Punjab, JS Bank Ltd and The Bank of Khyber. These banks have been selected through a transparent bidding process based on prescribed criteria.
While appreciating banks’ enthusiastic response, Dr. Reza Baqir, Governor State Bank emphasized early roll out of the scheme by banks.
He also underscored the importance of extensive awareness and marketing of the scheme for the SMEs to fully utilize its benefits.
Access to finance for SMEs remains low in Pakistan due to a number of factors including lack of collateral and perceived high risk due to non-availability of track-record.
To address these issues, SBP adopted an innovative approach by designing SME Assan Finance, commonly known as SAAF which refers to the collateral free nature of finance. SAAF has been developed after thorough consultation with stakeholders.
To implement this scheme, the SBP decided that rather than advising all banks to offer this product, only willing banks will be encouraged to be part of this initiative and develop their expertise through a transparent process.
SAAF was launched in August 2021 and bids were solicited from the interested banks. Under SAAF, SBP will provide refinance to the banks at 1 per cent per annum (p.a.) for onward lending to SMEs at a maximum end-user rate of up to 9 per cent p.a.
The end user rate under SAAF would be attractive for SMEs when compared with usual cost of financing for them from informal sources which can run 25 per cent – 50 per cent p.a.
The margin available to banks will help them to make an upfront investment in human resources, technology and processes to cater to promote SME finance.
This incentive has been provided to banks for the first three years of this scheme after which it is expected to become self-sustaining.
Additionally, under SAAF, risk coverage of up to 60 percent is being provided by Government of Pakistan. Under the SAAF scheme, SMEs can avail collateral free financing of up to Rs 10 million to meet their long-term capital expenditure and short-term working capital needs.
Governor Baqir also emphasized that a Shariah compliant version of SAAF is also available.
SBP has allocated refinance limits to eight winning banks for three years. Currently, these banks are finalizing their roll out plans for successful implementation of the scheme.
It is expected that selected banks will shortly roll out their SAAF programs through public announcements and marketing campaigns so that SME borrowers can approach any of these eight banks to request collateral free financing.
“Building further on its vision to facilitate taxpayers through automation, digitization, and minimization of human interaction with taxpayers, the FBR is all set to launch Single Sales Tax Portal. Prime Minister is likely to unveil the mega national initiative, later this month,” it said.
This landmark initiative has been made possible after thorough discussions with the provincial revenue authorities of Punjab, Sindh, KPK, Baluchistan, and AJK.
This facility will enable taxpayers to file single monthly Sales Tax returns instead of multiple returns (6 in the past) on different portals; thereby, significantly reducing the time and cost of compliance, and thus achieving maximum efficiency.
The system would be intelligent enough to sift and collect revenues from a single taxpayer and distribute the same among multiple revenue agencies.
This unique project would also help in resolving the long outstanding issues of input tax adjustment among relevant stakeholders. With the proposed launch of Single Sales Tax Portal later this month, the existing cumbersome and tedious processes would be replaced with an efficient & automated system of tax adjustments, with minimum human involvement.
The Portal would also be beneficial for tax collectors in having a 360-degrees view of taxpayers’ business activities across the country in order to maximize revenue potential and tax compliance.
By all standards, this is a giant leap forward in taxpayers’ facilitation and at the same time, a significant step in harmonization of taxes between federal and provincial governments.
ISLAMABAD: The import bill of Pakistan surged by 65.15 per cent during the first four months (July – October) of 2021/2022, according to official statistics released on Tuesday.
The import bill increased to $25.06 billion during the first four months of the current fiscal year as compared with $15.17 billion in the same period of the last fiscal year, according to data of Pakistan Bureau of Statistics (PBS).
On the other hand, exports of the country registered a growth of 24.71 per cent to $9.44 billion during the first four months of the current fiscal year as compared with $7.57 billion in the corresponding months of the last year.
The trade deficit of the country swelled by 105.43 per cent to $15.62 billion during July – October of the current fiscal year as compared with the deficit of $7.60 billion in the same period of the last fiscal year.
The trade deficit widened by 117 per cent to $3.88 billion in October 2021 when compared with the deficit of 1.789 billion in the same month of the last year.
The import bill during the month of October 2021 increased by 63 per cent to $6.334 billion as against $3.89 billion in the same month of the last year.
Similarly, the exports exhibited a growth of 16.52 per cent to $2.45 billion in October 2021 as compared with $2.1 billion in the same month of the last year.
KARACHI: State Bank of Pakistan (SBP) has strongly rejected the media reports of financial losses or data stolen in the recent cyber attack.
In a tweet on Monday, the SBP said some fake news regarding cyber security attack on banks is in circulation including remarks attributed to Chief Spokesman Abid Qamar.
According to these fake news, nine banks have been affected by the attack and that money has been withdrawn and data stolen.
“Further, no financial loss or data breach has been observed so far,” the SBP added.
The SBP is monitoring the situation closely and it will share any update or information about the incident through its official channels, according to the tweet.
Earlier, on October 30, 2021, the SBP in another tweet stated that the NBP had reported a cybersecurity-related incident that is being investigated. “NBP has not observed any data breach or financial loss. No other bank has reported any such incidence,” the SBP said adding it was monitoring the situation closely to ensure the safety and soundness of the banking system.
