Pakistan’s economic landscape faces a significant challenge as the country’s current account deficit (CAD) has sharply widened to $7.1 billion during the initial five months of the current fiscal year.
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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.
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Prize bond (bearer) holders given 3 months to document
ISLAMABAD: The holders of unregistered or bearer prize bonds have been given three months to exchange or covert with the documented ways otherwise the bills will have no worth after the deadline.
Through different notifications, the Finance Division has notified extension to exchange or conversion of high denomination unregistered/bearer prize bonds up to March 31, 2022, from the existing date of December 31, 2021.
READ MORE: History of Prize Bonds in Pakistan
The government allowed to exchange the bearer prize bonds with denominations including Rs7,500, Rs15,000, Rs25,000, and Rs40,000.
In June 2019, the government decided to discontinue high denomination bearer bonds in a phased manner. The government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds. Similarly, on December 10, 2020, the government announced to discontinue the circulation of Rs25,000 denomination prize bonds. In April 2021, the finance ministry announced that national prize bonds of denominations Rs7,500 and Rs15,000 shall not be sold.
The bonds can be converted to premium prize bonds (registered) of denomination of Rs25,000 and Rs40,000 (subject to the adjustment of differential amount) through 16 field offices of SBP Banking Services Corporation, and branches of six commercial banks i.e. National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited, and Bank Alfalah Limited.
READ MORE: Income tax on prize bonds, lottery winning
The bonds can be replaced with Special Saving Certificates/Defence Saving Certificates through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks, and the National Savings Center.
The bonds will only be encashed by transferring the proceeds to the bonds holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches and to the Saving Accounts at National Savings Centers.
READ MORE: Sale of Prize Bonds Rs7,500, Rs15,000 stopped forthwith
The State Bank of Pakistan (SBP) data showed that bearer bonds worth Rs28 billion were still in the possession of the investors by the end of October 2021.
However, the bondholders surrendered these bills worth Rs437.59 billion during the last one year. The stock of these bearer bonds is Rs465.59 billion by October 2020.
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SBP sets limits for sale of foreign exchange to individuals
KARACHI: State Bank of Pakistan (SBP) has issued instructions to exchange companies and set limits for the sale of foreign currency to individuals.
The SBP issued a circular dated December 19, 2021 and revised instructions in Exchange Companies Manual.
The central bank said that exchange companies may sell foreign currency to individuals while ensuring the following limits:
Maximum limit per person per day for buying foreign currency (in the form of cash or outward remittance) from all ECs/ECs-B, is $10,000 or equivalent in other foreign currencies.
Maximum limit per person per calendar year for buying foreign currency (in the form of cash or outward remittance) from all ECs/ECs-B, is $100,000 or equivalent in other foreign currencies.
READ MORE: SBP revises manual on remittances for petroleum sector
For this purpose, the Exchange Companies shall obtain an undertaking from individual customer at the time of each sale transaction exceeding $1,000/- (or equivalent in other currencies) that they have not already reached the limit of $100,000/- per calendar year or $10,000/- per day from all ECs/ ECs-B and these limits will not be breached after the current transaction.
In order to enhance documentation and transparency and to further strengthen the regulatory regime for ECs/ECs-B, the SBP decided to amend the applicable regulations relating to the business of ECs/ECs-B. Accordingly, the relevant instructions in the following Paras of Exchange Companies Manual stand amended as under:
READ MORE: State Bank reduces retention period for foreign exchange
For all foreign currency sale transactions equivalent to $500/- or above Exchange Companies will retain copies of identification documents i.e., Computerized National Identity Card (CNIC) /National Identity Card for Overseas Pakistanis (NICOP)/ Pakistan Origin Card (POC) / Passport (having valid visa on it or any other proof of legal stay of a foreigner in Pakistan) after having seen the document in original.
In addition, Exchange Companies shall also carry out biometric verification of Pakistani Nationals for all such transactions and maintain the record thereof. Exchange Companies will also obtain supporting documents related to the purpose (as stated by the customer) of FCY sale transactions, exceeding USD 1,000 or equivalent in other currencies.
READ MORE: SBP revises manual to facilitate cross border payments
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Exchange rate declaration must for services exports
KARACHI: The Sindh government has made mandatory the requirement of exchange rate declaration to avail sales tax concessions on export of services.
In this regard, the Sindh Revenue Board (SRB) issued a notification to amend Sales Tax on Services Rules, 2011.
The provincial revenue board amended the changes in Annex-D of the Sindh Sales Tax on Services Return in Form SST-03.
The decision to amend the rules has been taken considering the high volatility in exchange rate as the Pak Rupee hit record low at Rs178.04 on December 17, 2021 and lost around 13 per cent against the dollar since start of the current fiscal year.
READ MORE: Dollar hits record high of Rs178.04 at interbank closing
As per the amended sales tax on service return form, an exporter is required to provide name of the foreign buyer or the non-resident service recipient. The other details shall be provided by the exporters, included: country to which service exported; description of the service exported; tariff heading of the service exported; 4-digit code as per State Bank of Pakistan (SBP) Code List; Invoice No.; Invoice Date etc.
The exporters are also required to value of the service exported, included: in foreign exchange (with currency name); exchange rate; in Pak Rupee.
The exporters further required to provide details, included: amount of sales tax involved being claimed to be exempt (in Pak Rupee); Reference No. of the notification / authority for exemption; and actual/estimated date for receipt of sale value in foreign exchange.
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IMF intervention to add economic miseries of Pakistan
Business leaders have raised serious concerns over the continuous intervention of the International Monetary Fund (IMF), warning that its influence is exacerbating Pakistan’s economic struggles.
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Dr. Alvi rejects banker’s plea in woman harassment case
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi, has rejected a petition filed by a banker for reinstatement into service, who was sacked for harassing a woman.
The petitioner filed the appeal before the president against the decision of the Federal Ombudsman for Protection against Harassment of Women at Workplace which had modified the punishment of “dismissal from service” into “removal from service”.
READ MORE: President Alvi rejects MCB Bank’s appeal in fraud case
The President upheld the orders of the ombudsman noting that the petitioner was awarded the penalty of dismissal from service after inquiry wherein allegations of harassment stood established against him and the petitioner had failed to point out any illegality with the order of the learned ombudsman.
According to the background of the case, Naeem Iqbal was appointed as Bank Cashier Grade-1 at Bank Alfalah Ltd, on February 01, 2006, and he was later promoted to Operation Officer, Counter Services Manager and Branch Operation Manager in 2010, 2014 and 2016 respectively.
READ MORE: President Alvi orders two banks to pay victims of fraud
Ms Habiba Rauf had filed a complaint before the management of the bank alleging acts of harassment against the accused.
After inquiry, Iqbal was found guilty and, consequently, dismissed from the service by Bank Alfalah Ltd.
After making a representation before the competent authority, he filed an appeal before the Woman Ombudsman who ordered that the appeal of the accused deserves outright dismissal, yet, on considering his long service and the fact that he has a large family, consisting of small kids and aged parents, leniency in punishment looks more appropriate and nearer to justice and fair play.
READ MORE: President Alvi orders State Life to pay death insurance
The ombudsman, therefore, modified the punishment of “dismissal from service” into “removal from service” and disposed of his appeal.
Subsequently, Naeem Iqbal filed a representation with the President for reinstatement into service. While disposing of his appeal, the President noted that the petitioner was seeking setting aside of the order of the bank, dated March 18, 2019, and reinstatement into service purely on humanitarian grounds.
The learned Ombudsman had already converted the penalty of dismissal to removal from service on such grounds.
The President observed that since the petitioner had failed to point out any illegality with the order and no justification existed to interfere with the order of the Ombudsman, therefore, the instant representation is dismissed.
READ MORE: Dr. Alvi opens property exhibition for UAE based NRPs
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Dollar hits record high of Rs178.04 at interbank closing
KARACHI: The US dollar breached the level of Rs178 on Friday due to mounting demand for the foreign currency for import payments.
The Pak Rupee (PKR) ended at Rs178.04 to the dollar from the previous day’s closing of Rs177.98 in the interbank foreign exchange market.
Currency experts said that dollar demand for import and corporate payments remained high during the day. They said that dollar demand for import and corporate payments remained high due to the closing of the year.
READ MORE: Dollar maintains record high level at Rs177.98
They said that the measures taken by the State Bank through tightening of monetary policy has failed to support the rupee.
The State Bank of Pakistan (SBP) on December 14, 2021 announced a monetary statement and increased the key policy rate by 100 basis points to 9.75 per cent. The SBP increased the policy rate by 250 basis points in less than a month to support the local currency by reducing the demand.
READ MORE: Rupee falls to new record low despite policy rate hike
The dealers said that there was no letup in import payment. The import bill of the country surged by 69.17 per cent to $33 billion during the first five months (July – November) 2021/2022 as compared with $19.47 billion in the corresponding months of the last fiscal year.
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FBR notifies increase in sales tax on petrol, HSD
The Federal Board of Revenue (FBR) has announced an increase in sales tax on the supply of petrol and high-speed diesel (HSD), as outlined in the recently issued SRO 1640(I)/2021.
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Dollar maintains record high level at Rs177.98
KARACHI: The US dollar on Thursday maintained the record high level of Rs177.98 at closing of interbank foreign exchange market.
The Pak Rupee ended unchanged against the dollar at previous day’s closing of Rs177.98, which was the lowest level of the rupee.
READ MORE: Rupee falls to new record low despite policy rate hike
Currency experts said that the market witnessed high dollar demand for import and corporate payments. However, sufficient inflows of the dollar helped the rupee to keep value at previous day’s level.
The State Bank of Pakistan (SBP) on December 14, 2021 announced another 100 basis points increase in the key policy rate to 9.75 per cent. It was the third straight increase in the policy rate by the central bank since September 2021. However, the free-fall in rupee continued due to higher dollar demand for import payments.
READ MORE: Dollar eases against PKR on expected policy rate rise
According to the official data of Pakistan Bureau of Statistics (PBS), the import bill of the country surged by 69.17 per cent to $33 billion during the first five months (July – November) 2021/2022 as compared with $19.47 billion in the corresponding months of the last fiscal year.
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Petrol price reduces to Rs140.82 per liter
ISLAMABAD: The government on Wednesday decided to reduce the prices of petroleum products for next fortnight considering the fall in international oil prices.
The government has not passed on the all the benefit of fall in international oil prices as it enhanced sales tax rates. However, the government kept the petroleum levy unchanged. The prices are applicable from December 16, 2021.
Price on petrol cut by Rs 5 to Rs 140.82/ltr
Price on diesel cut by Rs 5 to Rs 137.62/ltr
Petroleum levy on petrol and diesel remained unchanged at Rs 13.62 and Rs 13.14.
Sales tax on petrol raised from 1.63 per cent to 4.77 per cent. Ssles tax on diesel raises from 7.37 per cent to 9.08 per cent