The Directorate of Customs Intelligence and Investigation in Gwadar has announced a substantial auction of motor vehicles scheduled for March 2, 2024, at Custom House Gaddani.
(more…)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.
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Notification issued for implementing 15% salary increase
ISLAMABAD: The finance ministry has notified an office memorandum for the increase of 15 per cent in the salary of federal government employees from March 01, 2022.
According the memorandum dated February 23, 2022, the employees of the federal government will get disparity reduction allowance at 15 per cent of the basic pay scales 2017 with effect from March 01, 2022.
The federal government on February 10, 2022 announced an increase of 15 per cent in salaries of employees from BS-1 to BS-19.
READ MORE: Federal government announces 15% increase in salaries
The latest memorandum stated that the allowance shall be admissible to civil employees in BPS-1 to BPS-19 of the federal government, (including employees of the federal secretariat, attached departments and subordinate offices) who have never been allowed additional allowance / allowances equal to or more than 100 per cent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:
READ MORE: Withholding tax rates on salary income for 2021-2022
a. This allowance will not be admissible to the employees of the organizations who are drawing additional allowance/allowances equal to or more than 100 per cent of the basic pay (whether frozen or otherwise);
b. This allowance will be frozen at the level drawn on March 01, 2022;
c. This allowance will be subject to Income Tax;
d. This allowance will be admissible during leave and entire period of LPR except during extra ordinary leave;
e. This allowance will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent;
READ MORE: Employers to deduct tax on salary income
f. This allowance will not be admissible to the employees during the tenure of their posting/deputation abroad;
g. This allowance will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them, had they not been posted abroad;
READ MORE: Tax on salary income of earlier year
h. This allowance will be admissible during the period of suspension;
i. The term ‘basic pay’ will also include the amount of personal pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.
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SBP relaxes financing for under construction houses
KARACHI: The State Bank of Pakistan (SBP) has relaxed financing conditions for housing units in under construction projects.
The central bank issued a circular dated February 25, 2022 to ease the conditions for house financing. It said that in order to further facilitate buyers of housing units in under construction projects, requirement of builder/developer to avail construction financing is being relaxed.
READ MORE: Bank Alfalah tops in house financing under MPMG
“Accordingly, purchasers of housing units in under construction projects may avail housing finance against their housing units in projects where builder/developer has not availed construction financing,” the SBP said.
In such cases, the builder/developer will have to create mortgage charge over project’s land in favor of bank/DFI through an agreement. The charge will only be vacated after completion of the project and transfer of housing units to the purchasers. Moreover, the builder/developer will comply with all other provisions of subject guidelines, it added.
Any bank/DFI can provide housing finance to a purchaser of a housing unit in such under construction projects.
READ MORE: SBP launches webpage for promoting house financing
However, if the purchaser wants to avail financing from a bank/DFI other than the mortgagee bank/DFI, then it will have to obtain NOC from the mortgagee bank/DFI in this regard.
Moreover, financing bank/DFI of such purchasers will also be required to enter into bilateral arrangement with the mortgagee bank/DFI to secure its risk.
With regard to the requirement of informed consent under guidelines, it is clarified that the builder/developer will be responsible to arrange written informed consent from the customers who intend to purchase housing units from their own sources without availing mortgage finance.
The letters of written consent of such purchasers will be submitted to the bank/DFI in original by the builder/developer.
The builders/developers are developing and marketing a number of multi-storey projects of housing units across the country. Although these under construction projects are exposed to project completion risk and performance risk of builders/developers, many individuals are attracted to book housing units in these projects owing to their affordability and option of payments through installments.
However, the banks/DFIs have traditionally shied away from financing to the housing units in under construction projects due to issues in availability of legally enforceable title documents and registration of mortgages as per requirements of Prudential Regulations (PR) for Housing Finance.
It may be noted that banks/DFIs extend project financing to builders/developers for construction of multistorey housing projects after adequately securing their project and builder risks through mortgage of project land and other securities. Utilizing these already established security arrangements with the builders/developers, the banks/DFIs may also extend housing finance against housing units in multistorey housing projects. This will expand options of affordable housing to the individual borrowers. This will also facilitate banks/DFIs in ensuring repayment/ settlement of their project financing through conversion of the same in housing finance.
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Sindh High Court stops tax recovery against SSGC
KARACHI: Sindh High Court has suspended tax recovery notices issued against Sui Southern Gas Company Limited, according to a communication sent to the Pakistan Stock Exchange (PSX) on Friday.
The gas utility clarified reports regarding action of the Large Taxpayers Office (LTO) Karachi for making recovery by attachment of bank accounts.
READ MORE: FBR freezes SSGC’s bank accounts for tax recovery
SSGC said that LTO Karachi had issued notice of recovery of sales tax to banks regarding SSGC without following the legal process and waiting for decision of an independent forum i.e. Appellate Tribunal.
“Demand was raised on irrational and unreasonable grounds of treating swapping of indigenous gas against RLNG to SNGPL as sales income,” the gas utility said.
It said that against the said recovery notice, SSGC filed constitutional petition before Sindh High Court and the SHC suspended the recovery notice of LTO Karachi through an Order dated February 23, 2022 being devoid of legal merits and directed SSGC to pursue matter before the Appellate Tribunal.
The LTO Karachi on February 23, 2021 issued a press release stating that it had frozen bank accounts of SSGC due to its default of sales tax amount to the tune of Rs23 billion. The default amount of sales tax was also confirmed by the Commissioner Inland Revenue (Appeals).
The SSGC in its latest communication said that the LTO Karachi had withdrawn such recovery notices.
The LTO Karachi in an official note dated February 24, 2022 sent to banks stated: “… for the recovery of sales tax outstanding demand of Rs23.65 billion through bank attachment issued/served in respect of M/s. Suit Southern Gas Company Limited is hereby withdrawn with immediate effect.”
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National Bank under grip of regulatory violations
National Bank of Pakistan in a notice sent to Pakistan Stock Exchange (PSX) disclosed that it reached an agreement with US regulators of NBP’s New York branch with fines of $55 million arising due to historical compliance weakness and delays in making compliance related enhancements.
However, there were no findings of improper transactions or willful conduct as per the notice.
Latest press release by U.S Department of Financial Services stated: “The National Bank of Pakistan allowed serious compliance deficiencies in its New York branch to persist for years despite repeated regulatory warnings. Foreign banks that enjoy the privilege of operating in New York have an obligation to maintain effective controls, and the Department will continue to promote financial transparency and take action to protect the global financial system when those obligations are not met”.
READ MORE: US central bank imposes $20.4 million penalty on NBP
Following examinations conducted by the Department and the Federal Reserve Bank of New York in 2014 and 2015, NBP’s New York branch was found to have inadequate Bank Secrecy/Anti-money compliance programs.
As a result, enforcement action against NBP was taken in 2016 where NBP agreed to improve compliance deficiencies which later on it failed to do so. As a result, the bank will now be subject to $35 million penalty in addition to certain deliverables for the improvement in its compliance program.
READ MORE: NBP lends Rs18.8bn in Hascol’s Rs54bn scam
In addition to the fine by U.S Department of Financial Services, Federal Reserve Board also imposed $20.4million penalty against NBP on anti-money laundering violations totaling penalty to $55million which translates into Rs9.7billion (Rs4.6/share). In 9M2021, the bank has so far reported earnings of Rs25billion.
Analysts at Topline Securities said that previously HBL also faced a similar fine in 2017 where the U.S regulators initially imposed a penalty of US$630million on HBL on non-compliance of Anti-money laundering laws, which was later revised down to US$225million.
NBP is also faced with a pending pension liability case with potential liabilities of over Rs70 billion under which the company had filed a review petition in Supreme Court of Pakistan where further judgement is still awaited. The bank due to the aforementioned reason has skipped dividends since 2017, we believe.
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Rupee plunges 72 paisas to dollar on Russia War
KARACHI: The Pak Rupee (PKR) plunged by 72 paisas against the dollar on Friday as war between Russia and Ukraine intensified.
The rupee ended Rs177.11 to the dollar from previous day’s closing of Rs176.39 in the interbank foreign exchange market.
READ MORE: PKR slides 23 paisas to dollar on Russia-Ukraine war
Currency experts said that the rupee remained under pressure during the day due to rising oil prices in international markets after war intensified between Russia and Ukraine. Further, the last trading day and advance dollar buying also deteriorated the rupee value.
The experts said that Pakistan is dependent upon the import of petroleum products to meet domestic demand.
READ MORE: PKR gains seven paisas to dollar in interbank
The oil bill of the country surged by 107 per cent to $11.7 billion during the first seven months (July – January) of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.
The experts said that scheduled repayments of the government for foreign debt had also pressured the rupee.
READ MORE: Rupee plummets 48 paisas to dollar
The liquid foreign exchange reserves of Pakistan declined by $264 million to $23.226 billion by week ended February 18, 2022, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were $23.49 billion by week ended February 11, 2022.
The official reserves of the State Bank fell by $289 million to $16.807 billion by week ended February 18, 2022 as compared with $17.096 billion a week ago.
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US central bank imposes $20.4 million penalty on NBP
KARACHI: The central bank of the United States on Thursday imposed a monetary penalty of $20.4 million on New York branch of Pakistan’s largest public sector bank for violating anti-money laundering laws.
A statement issued by the Federal Reserve Board, the US central bank, has announced a $20.4 million penalty against the National Bank of Pakistan (NBP) for anti-money laundering violations.
READ MORE: NBP lends Rs18.8bn in Hascol’s Rs54bn scam
“The Board will also require the firm to improve its anti-money laundering program,” it added.
As detailed in the consent cease and desist order against the NBP, the firm’s U.S. banking operations did not maintain an effective risk management program or controls sufficient to comply with anti-money laundering laws.
The Board’s action is in conjunction with an action by the New York State Department of Financial Services, according to the statement.
READ MORE: NBP directed to pay Rs0.5 million to fraud victim
The board of governors of the Federal Reserve System directed the NBP to improve corporate governance and management oversight. The National Bank of Pakistan and its New York Branch have been asked to jointly submit a written plan to enhance oversight. The plan shall provide for a sustainable governance framework.
READ MORE: No disruption in transactions post cyber-attack on NBP
It is further directed that within 60 days of the order, the bank and the bank branch shall jointly submit a written revised Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) compliance program for the branch that is acceptable to the Reserve Bank.
Furthermore, the bank has been advised to submit a written revised customer due diligence program acceptable to the Reserve Bank.
READ MORE: NBP announces Rs17.04 billion as half year profit
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Current account deficit widens to $11.58 bn in 7MFY22
KARACHI: The current account deficit of the country widened to staggering $11.58 billion during the first seven months (July – January) 2021/2022 as compared with a surplus of $1.03 in the corresponding period of the last fiscal year, according to data released by the State Bank of Pakistan (SBP) on Thursday.
READ MORE: Pakistan’s current account deficit balloons to $9.1 bn
The widening in current account deficit mainly attributed to massive rise in import bill. The imports of the country surged by 59.33 per cent to $46.62 billion in the first seven months of the current fiscal year as compared with $29.26 billion in the corresponding months of the last fiscal year, according to Pakistan Bureau of Statistics (PBS).
READ MORE: Pakistan’s CAD balloons to $7.1 billion in five months
The exports of the country fell by 25 per cent to $17.44 billion during the period under review as compared with $14.25 billion in the same period of the last fiscal year.
Resultantly, the trade deficit ballooned by 92.45 per cent to $28.87 billion during the first seven months of the current fiscal year as compared with the deficit of $15 billion in the same period of the last fiscal year.
READ MORE: July-Oct current account deficit widens to $5.08 billion
The inflows of workers’ remittances increased to record $18 billion during the first seven months (July – January) 2021/2022. The remittances registered an increase of 9.35 per cent during the period under review when compared with $16.46 billion received during first seven months of the last fiscal year.
READ MORE: Current account deficit swells to $3.4 billion in 1QFY22
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PM Imran, President Putin discuss regional development
MOSCOW: Prime Minister Imran Khan and Russian President Vladimir Putin on Thursday held a one on one meeting in Moscow with a wide-ranging agenda in focus relating to bilateral matters and regional developments.
The two leaders reviewed the entire array of bilateral relations including economic and energy cooperation, particularly the Pakistan Stream gas pipeline.
The regional situation including the developing scenario of Ukraine also came under discussion.
PM Imran Khan, earlier on his arrival at Kremlin – the executive headquarters of the Russian Federation, was warmly received by President Putin.
This is the first bilateral visit by a Pakistani prime minister to Russia after a gap of 23 years and is being termed as a historic step to renew relations between the two countries.
On the invitation of President Putin, Prime Minister Imran Khan arrived in the Russian capital Wednesday on a two-day visit where he was given a guard of honour at the airport.
The prime minister was accompanied by a high-level delegation, including federal ministers Shah Mahmood Qureshi, Chaudhry Fawad Hussain, Asad Umar and Hammad Azhar, Commerce Advisor Abdur Razzak Dawood, National Security Advisor Moeed Yusuf and Member of the National Assembly Amir Mahmood Kiyani.
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Pakistan’s consumer confidence index improves in Q4
KARACHI: Dun & Bradstreet Pakistan and Gallup Pakistan have issued their report on ‘Pakistan Consumer Confidence Index (CCI)’ for Q4 2021. The Consumer Confidence Index increased to 77.0 points in Q4 2021, compared to 70.8 points in Q3 2021, translating into 8.8 per cent q-o-q increase.
This improvement in sentiment is driven primarily by improvement in future expectations as respondents reported a greater increase in Future Expectations (up 13.6 per cent) compared to Current Situation (up 2.3 per cent) in this quarter.
During the current quarter, all CCI parameters witnessed a slight improvement while still indicating pessimism, driven primarily by increase in future expectations (up 13.6 per cent) Q-o-Q. Overall increase primarily stemmed from improved perceptions regarding Household Savings (up 16.3 per cent).
Unemployment continues to drag consumers’ enthusiasm and remained the most pessimistic parameter (NI = 55.3). Across all parameters, consumers were only optimistic regarding Future Financial Situation (NI = 109.3). During Q4 2021 survey, 91 per cent consumers believed that daily essentials have continued to become expensive/very expensive in the last 6 months compared to 94 per cent in Q3 2021.
Nauman Lakhani, Country Lead of Dun & Bradstreet in Pakistan stated, “The eighth issue of Pakistan Consumer Confidence marks the end of the calendar year 2021 and completion of two cycles of CCI. Current Consumer Confidence growth of almost 9 per cent as compared to the sharp decline last quarter is healthy, but consumers remain in the ‘pessimistic’ zone. The slight improvement is a likely indication of normalizing demand, amidst people adapting to the ‘new normal’.”
Bilal Ijaz Gilani, Executive Director Gallup Pakistan, added, “The current quarter results show improvement in overall consumer sentiment, driven largely by improved expectation for future. Having said this, the overall sentiment remains in the negative with majority rating current and future situation of their finances to be in dire straits. Given the continued pressure of inflation, slow economic growth and disparity between small vs large and those selling to domestic vs international markets growing, the chances of sentiments improving drastically in the short term are low as well. Businesses therefore need to keep this current and short-term forecast in mind while planning for expansion.”
The CCI report has been developed by assessing Consumers’ Confidence about the economy as well as their personal financial situation. The Index covers four key parameters i.e., Household Financial Situation, Country’s Economic Condition, Unemployment, and Household Savings. The Index reflects ‘Current Situation’ (economic changes witnessed in the last six months), as well as ‘Future Expectations’ (changes expected for next six months) of consumers across the country.
The CCI ranges from 0 to 200, with 100 as the neutral value. A score of less than 100 indicates pessimism while a score of more than 100 indicates optimism.