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FBR recommended imposing penalty for late return filing instead extending last date

ISLAMABAD: Federal Tax Ombudsman (FTO) has advised the Federal Board of Revenue (FBR) to impose penalty for late filing of income tax returns instead extending the last date.

The FTO in its annual report recommended that the FBR that instead of extending the last date for filing of Returns, late filing be allowed with certain penalty per month or any part of it, as it would be a more revenue-pro measure.

The FTO further recommended that in order to encourage increase in filing of Returns by employees of government and autonomous bodies, it was recommended that FBR to approach the concerned Authorities/Establishment Division to issue instructions to heads of government Departments, autonomous bodies and large scale public sector organizations for obtaining certificate of filing of Returns by their employees falling in the tax net, at the end of last date of filing of Returns, and link their promotions/increments to filing of Returns.

It was also suggested to devise mechanism in consultation with Securities and Exchange Commission of Pakistan (SECP) to ensure that business entities registered with SECP, who were non-filers, must file Income Tax Returns regularly.

It was also recommended that proper assistance to the Return filers be provided through establishment of facilitation centres at convenient places.

July 18, 2020
Annual foreign direct investment grows by 88 percent

KARACHI: Foreign Direct Investment (FDI) into the country registered 88 percent growth to $2.56 billion during fiscal year 2019/2020, State Bank of Pakistan (SBP) said on Friday.

The FDI posted $1.198 billion increase during the fiscal year under review as compared with $1.36 billion in the preceding fiscal year i.e. 2018/2019.

The inflows under the head of FDI grew by 18 percent to $3.285 billion during fiscal year 2019/2020 as compared with $2.78 billion in the preceding fiscal year. However, outflows recorded 49 percent decline to $724 million as against outflow of $1.42 billion in the preceding fiscal year.

The portfolio investment registered 32 percent contraction in outflows during the period under review. The outflows from the capital market recorded $281.7 million during fiscal year 2019/2020 as compared with the outflow of $415 million in the preceding fiscal year.

The total foreign private investment posted 140.7 percent growth to $2.279 billion during July-June 2019/2020 as compared with $947.2 million in the preceding fiscal year.

The foreign public investment in debt securities witnessed outflow of 241.3 million during fiscal year 2019/2020 as compared with $1 billion in the preceding fiscal year.

The total foreign investment including public and private rose to $2.038 billion during fiscal year 2019/2020 as compared with outflow of $54.8 million in the preceding fiscal year.

July 18, 2020
SECP proposes amendments to insurance laws

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued draft bill to amend Insurance Ordinance 2000 with aim to bridge regulatory gaps in existing laws.

The draft law has been placed on SECP’s website for stakeholders and public consultation.

The draft bill will address the regulatory gaps in existing law and provide a conducive regulatory environment to encourage market development, the SECP said.

It will facilitate use of technology, provide ease of doing business and address entity specific and systemic risks by shifting towards Risk Based Supervision (RBS) and Risk Based Capital (RBC) Regime, it added.

The amendments in law will also strengthen the regulatory framework and ensure its alignment with the Insurance Core Principles (ICP) of the International Association of Insurance Supervisors (IAIS).

The significant reforms proposed in the draft bill include introduction of dedicated micro-insurers, provisions for regulation of takaful and re-takaful, regulation of local and foreign reinsurance business for enhancement of local capacity, regulation of reinsurance brokers, flexibility for introduction of new intermediaries, insurance repository and insurance self-network platform, provisions for regulation of index based insurance and InsurTech.

Provisions for introduction of RBS and RBC regime and establishment and operation of a guarantee fund for insolvency of insurers have been included to strengthen the regulatory framework and align the law with core principles of IAIS and address systemic risk.

The amended law will also assist in enhancing compliance with AML/CFT frameworks.

The changes include requirement of appointed actuary and product filing of personal lines for non-life insurance, appointment of internal actuary for life insurers and enhancement of market conduct provisions.

The regulatory powers of the Commission for regulation and supervision of insurance companies and intermediaries, have also been streamlined in the draft bill.

July 18, 2020
Share market continues gaining momentum, up by 329 points

KARACHI: The share market continued gaining momentum and increased by 329 points on Friday, analysts said.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 37,331 points as against 37,001 points showing an increase of 329 points (+0.9 percent DoD).

Market realized a gain of +353 points during the two session and closed the day at +329 points. HASCOL turned out to be the head turner, despite posting a loss of 25B the stock ended the session in green with a volume of 87.2 million shares.

Refinery sector saw NRL and PRL hitting upper circuit after news of recent disruption in oil supplies and similar performance was observed in other Refinery stocks. Banking sector stocks remained muted throughout the session. Steel sector also performed on the back of expectation of an increase in steel prices.

O&GMCs posted highest volumes of 92.9 million shares courtesy of HASCOL, and was followed by Chemical (52.9 million) and Technology (39.2 million). Among scrips, LOTCHEM (24.8 million) and UNITY (22.1 million) followed HASCOL.

Sectors contributing to the performance include Inv Banks (+60 points), Fertilizer (+52 points), Power (+40 points), Chemical (+35 points) and Autos (+26 points).

Volumes increased further from 402.6 million shares to 466.1 million shares (+16 percent DoD). Average traded value however declined by 2 percent to reach US$ 94.6 million as against US$ 96 million.

Stocks that contributed significantly to the volumes include HASCOL, LOTCHEM, UNITY, MLCF and TRG, which formed 35 percent of total volumes.

Stocks that contributed positively to the index include DAWH (+58 points), ENGRO (+48 points), HUBC (+42 points), THALL (+20 points) and PAKT (+15 points). Stocks that contributed negatively include HBL (-14 points), EFUG (-8 points), PPL (-6 points), EFERT (-6 points), and OGDC (-5 points).

July 17, 2020
Rupee depreciates by 33 paisas on growing demand for imports

KARACHI: The Pak Rupee depreciated by another 33 paisas against dollar on Friday owing to rising demand of the foreign currency for import payments.

The rupee ended Rs167.33 to the dollar from previous day’s closing of Rs167.00 in interbank foreign exchange market.

Currency experts said that due to economic normalcy return after ease in lockdown the domestic demand for imported goods had increased.

They further said that due to weekly holidays ahead also escalated the demand for the foreign currency.

The local unit fell by around 70 paisas during the outgoing week.

The experts believed that the rupee would rebound in coming days owing to sufficient inflows.

State Bank of Pakistan (SBP) has said that the workers’ remittances rose by a significant 50.7 percent during June 2020 to reach monthly record high $2.46 billion compared with $1.63 billion in June 2019.

Similarly, on a cumulative basis, workers’ remittances increased to a historic high level of $23.12 billion during FY20, witnessing a growth of 6.4 percent over $21.74 billion during FY19.

According to Pakistan Bureau of Statistics (PBS) the import bill of the country fell by 18.6 percent to $44.57 billion as compared with $54.76 billion in the preceding fiscal year.

This helped the country to curtail the trade deficit for the year. The trade deficit of the country shrank by 27 percent to $23.18 billion during fiscal year 2019/2020 as compared with the deficit of $31.8 billion in the preceding fiscal year.

July 17, 2020
FBR notifies key transfers of senior IRS officers

ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified major transfers / postings of senior officers of Inland Revenue Service (IRS) with immediate effect.

The FBR notified transfers and postings of following BS-19-22 officers of IRS:

01. Hafiz Muhammad Ali Indhar (Inland Revenue Service/BS-22) has been transferred and posted as Member, (HRM) Federal Board of Revenue (Hq), Islamabad from the post of Member, (Strategic Planning Reforms & Statistics) Federal Board of Revenue (Hq), Islamabad.

02. Dr. Faiz Illahi Memon (Inland Revenue Service/BS-21) has been transferred and posted as Director General, (Special Initiative) (stationed at Karachi) from the post of Member, (Admin) Federal Board of Revenue (Hq), Islamabad.

03. Dr. Hamid Ateeq Sarwar (Inland Revenue Service/BS-21) has been transferred and posted as Member, (SPR&S) Federal Board of Revenue (Hq), Islamabad from the post of Member, (Inland Revenue Policy) Federal Board of Revenue (Hq), Islamabad.

04. Ch. Muhammad Tarique (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Inland Revenue Policy) Federal Board of Revenue (Hq), Islamabad from the post of Chief Commissioner-IR, Regional Tax Office, Sialkot.

05. Dr.Lubna Ayub (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Regional Tax Office, Quetta from the post of Member, Federal Board of Revenue (Hq), Islamabad.

06. Ms. Ambreen Iftikhar (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Reforms & Modernization) Federal Board of Revenue (Hq), Islamabad from the post of Member, (HRM) Federal Board of Revenue (Hq), Islamabad.

07. Bakhtiar Muhammad (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Admin) Federal Board of Revenue (Hq), Islamabad from the post of Member, (FATE) Federal Board of Revenue (Hq), Islamabad.

He is also assigned the additional charge of the post of Member (FATE), FBR till the posting of a regular incumbent.

08. Sajidullah Siddiqui (Inland Revenue Service/BS-21) has been transferred and posted as Director General, (Retail) Federal Board of Revenue (Hq), Islamabad from the post of Chief Commissioner-IR, Corporate Regional Tax Office, Karachi.

09. Dr. Aftab Imam (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Corporate Regional Tax Office, Karachi from the post of Chief Commissioner-IR, Regional Tax Office, Quetta.

10. Tariq Mustafa Khan (Inland Revenue Service/BS-20) is presently working as Chief Commissioner-IR, (OPS) Regional Tax Office, Gujranwala. He is assigned the additional charge of the post of Chief Commissioner-IR, RTO, Sialkot till the posting of a regular incumbent.

11. Malik Amjad Zubair Tiwana (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (IP/TFD/HRM) Large Taxpayers Unit, Islamabad from the post of SA to Secretary Revenue Division / Chairman, Federal Board of Revenue (Hq), Islamabad.

12. Naveed Khalid Khan (Inland Revenue Service/BS-19) has been transferred and posted as SA (OPS) to Secretary Revenue Division / Chairman, FBR from the post of Chief, (OPS) (Admin) Federal Board of Revenue (Hq), Islamabad

The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

July 17, 2020

Advance tax on cable operators abolished

ISLAMABAD: The government has abolished advance tax on cable operators and other electronic media that was collected under Income Tax Ordinance, 2001.

Through Finance Act, 2020 the Section 236F of the Income Tax Ordinance, 2001 has been deleted.

The Section 236F was related to advance tax on cable operators and other electronic media, officials at Federal Board of Revenue (FBR) said on Thursday.

After the deletion of the section the advance tax under this has no more required to be collected from July 01, 2020.

The omitted section was as:

236F. Advance tax on cable operators and other electronic media.— (1) Pakistan Electronic Media Regulatory Authority, at the time of issuance of licence for distribution services or renewal of the licence to a licencee, shall collect advance tax at the rates specified in Division XIII of Part IV of the First Schedule.

(2) The tax collected under sub-section (1) shall be adjustable.

(3) For the purpose of this section, “cable television operator” “DTH”, “Distribution Service”, “electronic media”, “IPTV”, “loop holder”, “MMDS”, “mobile TV”, shall have the same meanings as defined in Pakistan Electronic Media Regulatory Authority Ordinance, 2002 (XIII of 2002) and rules made thereunder.

Division XIII of Part IV of the First Schedule

1) The rate of tax to be collected under section 236F in the case of Cable Television Operator shall be as follows:—

(License Category as provided in PEMRA Rules	Tax on License Fee	Tax on Renewal
H	Rs. 7,500	Rs. 10,000
H-I	Rs. 10,000	Rs. 15,000
H-II	Rs. 25,000	Rs. 30,000
R	Rs. 5,000	Rs. 12,000
B	Rs. 5,000	Rs. 40,000
B-1	Rs. 30,000	Rs. 35,000
B-2	Rs. 40,000	Rs. 45,000
B-3	Rs. 50,000	Rs. 75,000
B-4	Rs. 75,000	Rs. 100,000
B-5	Rs. 87,500	Rs. 150,000
B-6	Rs. 175,000	Rs. 200,000
B-7	Rs. 262,500	Rs. 300,000
B-8	Rs. 437,500	Rs. 500,000
B-9	Rs. 700,000	Rs. 800,000
B-10	Rs. 875,500	Rs. 900,000

(2) The rate of tax to be collected by Pakistan Electronic Media Regulatory Authority under section 236F in the case of IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights, shall be 20 per cent of the permission fee or renewal fee, as the case may be.]

“(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed.”

July 17, 2020

Hafeez Shaikh directs FBR to pay income tax refunds of up to Rs50 million

KARACHI: Dr Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue on Thursday directed Federal Board of Revenue (FBR) to make payment of all income tax refunds of up to Rs 50 million in the next couple of weeks.
(more…)

July 16, 2020
Foreign exchange reserves up by $163 million to $18.953 billion

KARACHI: The liquid foreign exchange reserves of the country increased by $163 million to $18.953 billion by week ended July 10, 2020, the State Bank of Pakistan (SBP) said on Thursday.

The foreign exchange reserves of the country were at $18.79 billion by week ended July 03, 2020.

The official reserves of the SBP increased by $13 million to $12.055 billion by week ended July 10, 2020 as against $12.042 billion a week ago.

The reserves held by commercial banks witnessed growth of $150 million to $6.898 billion by week ended July 10, 2020 as against $6.748 billion a week ago.

July 16, 2020
Stock market gains 322 points as activities seen in cement sector

KARACHI: The stock market gained 322 points on Thursday due to enhanced activity in cement sector following inauguration of Bhasha Dam, analysts said.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 37,001 points as against 36,679 points showing an increase of 322 points.

The analysts at Arif Habib Limited said that the benchmark KSE100 index topped 37,000 today by posting gains of 350 points during the session and ended at +322 points.

Overall volumes also crossed 400 million shares mark. Cement sector rallied on the back of recent inauguration of Bhasha Dam and optimism with respect to Housing Scheme.

PPL posted further gains for the third session in a row with high volumes. Foreign investor has largely been a major seller, whereas among local investors Insurance Companies and HNIs have taken the majority of float.

Among Banking sector, HBL showed improvement by the end of session, however, small cap banks remained in the limelight in terms of volumes.

Cement sector led the volumes with 66.5 million shares, followed by Technology (52.4 million) and Banks (51.1 million). Among scrips, JSBL topped the volumes with 31.6 million shares, followed by MLCF (24.8 million) and PAEL (24.1 million).

Sectors contributing to the performance include E&P (+66 points), Cement (+65 points), Banks (+46 points), Auto Assembler (+41 points) and Auto Parts (+24 points).

Volumes increased from 328.4 million shares to 402.4 million shares (+23 percent DoD). Average traded value also increased by 13 percent to reach US$ 96.2 million as against US$ 84.8 million.

Stocks that contributed significantly to the volumes include JSBL, MLCF, PAEL, HASCOL and PPL, which formed 30 percent of total volumes.

Stocks that contributed positively to the index include LUCK (+38 points), PPL (+37 points), HBL (+32 points), THALL (+18 points) and MTL (+16 points). Stocks that contributed negatively include COLG (-13 points), BAFL (-8 points), HASCOL (-6 points), EFUG (-5 points), and CHCC (-4 points).

July 16, 2020