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  • Prime Minister emphasizes out-of-box solution for economic growth amid COVID

    Prime Minister emphasizes out-of-box solution for economic growth amid COVID

    ISLAMABAD: Prime Minister Imran Khan has emphasized out-of-the-box solutions are required for economic growth in these crucial times.

    “COVID-19 has adversely impacted the world economy and of Pakistan too,” he said while chairing a meeting of the Finance and Economy Think-Tank on Saturday.

    He stated that from day one, the government adopted a strategy to maintain a balance between sustaining economic activity and protecting the masses from infectious disease of Covid-19.

    Imran Khan emphasized that prime focus is on providing relief to the poor segment of society through targeted subsidies.

    He stated that Ehsaas is the flagship program of the government to alleviate poverty and requires expansion along with a strategy to reach the needy people.

    The prime minister highlighted that a substantive package has been announced for the construction and housing sector that aims at increasing much needed employment opportunities and economic stimulus as well as adding to the inventory of affordable housing for the poor.

    The prime minister highly appreciated the proposals presented by the Think-Tank regarding banking and finance, further improving the Ehsaas program and facilitating SMEs.

    He directed that regular feedback of the Think-Tank be provided to him on various ongoing initiatives, policies and programs of the government.

    Advisor on Finance Dr. Abdul Hafeez Sheikh, Advisor on Institutional Reforms Dr. Ishrat Hussain, Governor State Bank of Pakistan Raza Baqir and Former Finance Secretary Dr. Waqar Masood Khan were present.

    Advisor on Commerce Abdul Razaq Dawood, Shaukat Tareen, Sultan Alana, Dr. Ijaz Nabi and Arif Habib participated via Video-Link.

    Advisor on Finance briefed about the objectives and focus areas of this Think-Tank on Finance and Economy.

  • SBP imposes monetary penalty of Rs1.68 billion on 15 banks

    SBP imposes monetary penalty of Rs1.68 billion on 15 banks

    KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty of Rs1.68 billion upon at least 15 commercial banks for violating various regulations including anti-money laundering (AML) and counter financing of terrorism (CFT).

    The SBP on Saturday released the data of significant enforcement actions by the central bank during March – June 2020.

    The top banks are also amongst the list for serious violation of regulations including customers due diligence, known your customer, asset quality, foreign exchange operation, corporate governance and AML/CFT.

     Sr.NoInstitutionNature of OffenceAction TakenMonetary Penalty (Rupees in million)
    1United Bank LtdProcedural violations in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate GovernanceIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.137.001
    2JS Bank LtdProcedural Violations in the areas of CDD/KYC, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.71.417
    3Meezan Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.81.060
    4Faysal Bank LtdProcedural violations in the areas of CDD/KYC, Asset Quality, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.96.128
    5The Bank of PunjabProcedural violations in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate GovernanceIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.286.333
    6Habib Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.204.217
    7MCB Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.158.474
    8National Bank OfProcedural violations in the areas of CDD/KYC, Asset Quality, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.269.810
    9Bank Alhabib LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.46.802
    10Habib Metropolitan Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.22.805
    11Bank Alfalah LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.40.305
    12Askari Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.29.814
    13Bank Islami LtdProcedural violations in the area of FX OperationsIn addition to penal action, the bank has been advised to strengthen its process related to FX operations, in order to avoid recurrence of such violations in future.11.517
    14Punjab Provincial Cooperative Bank LtdViolations in the area of AML/CFTPenal and administrative action taken against the bank. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.81.500
    15Zarai Taraqiati Bank LtdViolations in the area of AML/CFTPenal and administrative action taken against the bank. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.147.250

    The SBP said that these actions are based on deficiencies in regulatory compliance and does not constitute a comment on the financial soundness of the entity.

    The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.

    In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions.

  • Period for filing withholding tax statement reduced

    Period for filing withholding tax statement reduced

    ISLAMABAD: Withholding agents are required to file statement of deduction and collection on quarterly basis instead bi-annual.

    The change has been brought through Finance Act, 2020 by amending section 165 of the Income Tax Ordinance, 2001.

    Sources in Federal Board of Revenue (FBR) said that the change was brought on the proposal of business community as submission of record bi-annual was creating difficulties.

    The withholding statement was required to file on monthly basis. However, through Finance Supplementary (Second Amendment) Act, 2019 the relevant law was amendment and it was made on bi-annual basis.

    And now it is again reduced to quarterly basis through Finance Act 2020.

    The FBR sources said that the withholding statement is required to be submitted on:

    (a) in respect of quarter ending on the 31st day of March, on or before the 20th day of April;

    (b) in respect of quarter year ending on the 30th day of June, on or before the 20th day of July;

    (c) in respect of quarter ending on the 30th day of September, on or before the 20th day of October; and

    (d) in respect of quarter ending on or before the 31st day of December, on or before the 20th January.

    The FBR sources said that the withholding agents would provide following details of persons whose tax were deducted along with the statement, which would include:

    (a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or the Tenth Schedule or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.

    (b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.

    (c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or the Tenth Schedule or deducted from payments made to a person under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter; and

    (d) such other particulars as may be prescribed:

    Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.

    Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.

  • Weekly Review: stock market may maintain positive momentum

    Weekly Review: stock market may maintain positive momentum

    KARACHI: The stock market may maintain positive momentum during the next week owing to improvement sentiments and ease in cases related to COVID-19.

    Analysts at Arif Habib Limited expect the market to maintain its positive momentum in the coming week.

    Investor’s sentiment is expected to improve further on account of continuous decline in COVID-19 cases on a daily basis.

    Moreover, with the SBP’s foreign exchange reserves climbing up, they expect the PKR/USD parity to stabilize.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2020) compared to Asia Pacific regional average of 13.1x and while offering DY of ~6.2 percent versus ~2.7 percent offered by the region.

    The market commenced on a positive note this week given flattening of the COVID-19 curve along with higher recovery rate of patients.

    Furthermore, jump in SBP’s foreign exchange reserves (up by USD 811 million), reduction in mark-up on Long Term Financing Facility (from 6 percent to 5 percent) and Temporary Economic Refinance Facility (from 7 percent to 5 percent) as well as extension in deferment of principal amount facility pushed the index beyond 36,000 points level.

    Moreover, surge in cement sales by 30 percent YoY in June 2020, fall in trade deficit by 27 percent YoY in FY20 and 19 percent YoY higher sales of OMCs during June 2020 added fuel to the sentiment.

    The index settled at 36,190 points, gaining 1,139 points (up by 3.3 percent) WoW.

    Sector-wise positive contributions came from i) Commercial Banks (495 points), ii) Cement (141 points), iii) Oil & Gas Exploration Companies (135 points), iv) Automobile Assembler (82 points) and v) Oil & Gas Marketing Companies (69 points).

    Whereas, negative contributions came from Power Generation and Distribution (23 points) and Fertilizer (17 points). Scrip-wise positive contributions were led by HBL (141 points), PPL (70 points), UBL (65 points), NBP (46 points) and INDU (43 points).

    Foreign selling continued this week clocking-in at USD 9.5 million compared to a net sell of USD 20.5 million last week.

    Selling was witnessed in Commercial Banks (USD 2.9 million) and Cement (USD 2.3 million). On the domestic front, major buying was reported by Insurance Companies (USD 4.6 million and Companies (USD 2.8 million).

    Average volumes settled at 349 million shares (up by 39 percent WoW) while average value traded clocked-in at USD 74 million (up by 44 percent WoW).

  • Pakistan makes substantial progress in completing remaining FATF Action Plan: Hafeez Shaikh

    Pakistan makes substantial progress in completing remaining FATF Action Plan: Hafeez Shaikh

    ISLAMABAD: Pakistan has made substantial progress towards completing remaining action plan of Financial Action Task Force (FATF) through increasing the effectiveness of its AML/ CFT Regime, Dr Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue told International Financial Accountability.

    (more…)
  • FBR promotes 29 officials to post of assistant private secretary

    FBR promotes 29 officials to post of assistant private secretary

    ISLAMABAD: Federal Board of Revenue (FBR) has notified promotions of 29 steno-typists (BS-14) to the post of Assistant Private Secretary (BS-16).

    In a notification issued on Friday (July 10) the FBR notified promotions of following officials:

    01. Aurangzeb, RTO, Peshawar

    02. Waseem Iqbal, RTO, Islamabad

    03. Sulaiman Ahmed, RTO, Islamabad

    04. Allah Ditta, RTO, Rawalpindi

    05. Syed Shafqat Abbas, RTO, Gujranwala

    06. Iftikhar Ahmad Naseer, RTO, Gujranwala

    07. Syed Riaz Ahmad, RTO, Gujranwala

    08. Muhammad Abbas, RTO, Gujranwala

    09. Shabbir Ahmed, CRTO, Lahore

    10. Muhammad Yousaf, CRTO, Lahore

    11. Bashir Ahmed, RTO, Sargodha

    12. Muhammad Feroz, RTO, Sargodha

    13. Zia Rasool, RTO, Multan

    14. Saeed Ahmad, RTO, Bahawalpur

    15. Muhammad Ahmed, RTO, Bahawalpur

    16. Nasir Ali Khan, RTO, Hyderabad

    17. Muhammad Shafique, RTO, Hyderabad

    18. Muhammad Abid, CRTO, Karachi

    19. Syed Ghufran Ahmed, CRTO, Karachi

    20. Zuhair Ahmed, CRTO, Karachi

    21. Abdul Shakoor Awan, CRTO, Karachi

    22. Shafiq ur Rehman, CRTO, Karachi

    23. Ms. Shahla Riaz, CRTO, Karachi

    24. Syed Riffat Farid Nizami, CRTO, Karachi

    25. Munawar Ali, CRTO, Karachi

    26. Anisur Rehman, CRTO, Karachi

    27. Ms. Kausar Jehan, CRTO, Karachi

    28. Hussain Ahmed, CRTO, Karachi

    29. Syed Qamar ul Hassan, CRTO, Karachi

    The FBR said that the promotion would take effect from the date of their joining, subject to the condition that no disciplinary proceedings are pending against them.

    The FBR further said that the officials would be on probation for a period of one year, extendable for further period not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall be deemed to be held until further orders.

  • Customs auction of confiscated vehicles to be held on July 20 at Gwadar

    Customs auction of confiscated vehicles to be held on July 20 at Gwadar

    KARACHI: Pakistan Customs announced auction of confiscated vehicles to be held on July 20, 2020 at Gwadar Custom House.

    Following vehicles to be presented for the auction:

    01. Toyota Hilux Surf SSR-X, Model 2000, Engine Capacity 2700CC, Chassis No. VZN185-9041829

    02. Toyota Land Cruiser, Model 1998, Engine Capacity 4700CC, Chassis No UZJ100-0003462

    03. Toyota Corola X, Model 2006, Engine Capacity 1500CC, Chassis No NZE120-0123636

    04. Toyota Hilux Surf, Model 1992, Engine Capacity 3000CC, Chassis No LN130-0105065

    05. Toyota Premio, Model 2005, Engine Capacity 1800CC, Chassis No ZZT240-0061952

    06. Toyota Raum, Model 2004, Engine Capacity 1600CC, Chassis No NCZ20-0042911

    07. Toyota Premio X, Model 2003, Engine Capacity 1800CC, Chassis No ZZT240-5006935

    08. Toyota Raum, Model 2004, Engine Capacity 1600CC, Chassis No NCZ20-0064404

    09. Launch without Engine

    10. Toyota Vitz, Model 2003, Chassis No NCP10-0189243

    11. Toyota Mark-X, Model 2005, Engine Capacity 2499CC, Chassis No GRX120-0016505

    12. Toyota Hilux Pickup, Model 2002, Chassis No MROIUNE90500132

    13. Toyota Surf, Model 2000, Chassis No RZN185-9036240

    14. Toyota Hilux Surf (SSRG), Model 2003, Engine Capacity 3400CC, Chassis No VZN215-0004806

  • FBR empowered to recover income tax on sectoral benchmark basis

    FBR empowered to recover income tax on sectoral benchmark basis

    ISLAMABAD: The officials of Federal Board of Revenue (FBR) have been authorized to recover income tax on sectoral benchmark ratio basis where a taxpayer fails to provide record or required details.

    The concept of sectoral benchmark ratios has been introduced through Finance Act 2020 for making recovery of unexplained income by taxpayers. In this regard an amendment has been made to Section 177 of Income Tax Ordinance, 2001.

    A new subsection 2AA has been introduced to Section 177, under which, where a taxpayer

    (a) has not furnished record or documents including books of accounts;

    (b) has furnished incomplete record or books of accounts; or

    (c) is unable to provide sufficient explanation regarding the defects in records, documents or books of accounts,

    Is shall be construed that taxable income has not been correctly declared and the commissioner shall determine taxable income on the basis of sectoral benchmark ratios prescribed by the FBR.

    An explanation has been added to sub-section, stating that the expression ‘sectoral benchmark ratios’ means standard business sector ratios notified by the board on the basis of comparative cases and includes financial ratios, production ratios, gross profit ratio, net  profit ratio, recovery ratio, wastage ratio and such other ratios in respect of such sectors as may be prescribed.

  • Input tax credit against services provided by non-resident available with conditions: SRB

    Input tax credit against services provided by non-resident available with conditions: SRB

    KARACHI: Sindh Revenue Board (SRB) on Friday said that input tax credit for resident taxpayers receiving services from resident outside is available with certain condition.

    The provincial revenue body said that the SRB-registered service recipients who receive taxable services from a foreign service provider (not registered with SRB) shall be entitled to claim input tax credit if:

    (i) such SRB-registered person receives the taxable services against an invoice issued by that foreign service provider;

    (ii) pays, to the foreign service provider, the consideration for the services so received by the resident service recipient; and

    (iii) e-deposits the amount of Sindh sales tax, on such services in Sindh Government’s head of account “B-02384” in the prescribed manner.

    The entitlement of input tax credit shall be in terms of the provisions of section 15 of the Act-2011, subject to the conditions, limitations and restrictions prescribed under the Act-2011 and the rules or notifications made thereunder (including the provisions of sections 15A and 15B of the Act-2011, rules 21, 22 and 22A of the Sindh Sales Tax on Services Rules, 2011(Rules-2011) and other provisions of various rules and notification issued thereunder).

    The SBP said that a question had arisen whether input tax credits were admissible [where not otherwise inadmissible under the provisions of the Sindh Sales Tax on Services Act, 2011(Act-2011) or the rules/notifications issued thereunder] against an invoice issued by such a non-resident service provider who is resident outside Pakistan and does not hold Sindh Sales Tax Registration Number (SNTN). Also, in case it is admissible, the question is that what shall be the procedure in this regard.

    The SBP further said that as regards the procedure for input tax credit claims, the resident SRB-registered person (service recipient, in this case) shall e-deposit (in Sindh Government head of account “B-02384” in the prescribed manner) the amounts of Sindh sales tax on such services as are received by him from a foreign service provider (not registered with SRB) against the SNTN of the service recipient himself.

    Thereafter, the resident SRB-registered service recipient shall declare:

    (i) his own (resident SRB-registered service recipient) name and SNTN in the column “Particulars of Buyer”; and

    (ii) the date and number of the invoice issued by the foreign service provider in the column “Document/invoice” of Annex-C of his return SST-

    For claiming input tax credit, he shall enter corresponding entries in Annex-A of his Form SST-03 and shall also declare the “Non-creditable input”, if any, in the relevant column of such Annex-`A’.

    The invoice of the foreign service provider and the associated documents, including the document of evidence of payment of consideration through banking channel, shall form a part of the prescribed records for the purposes of section 26(1) of the Act-2011 and the rules made thereunder including rule 29 of the Rules-2011.

  • Stock market witnesses range bound session

    Stock market witnesses range bound session

    KARACHI: The stock market gained 48 points on Thursday as range bound session was observed during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,190 points as against previous day’s closing of 36,142 points, showing an increase of 48 points.

    Analysts at Topline Securities said that range bound session was observed at the local bourse as the index juggled between positive and negative zone to close at that 36,190 level.

    Major positive contribution came from LUCK, NBP and ENGRO as they cumulatively contributed 54 points to the index, whereas PPL, TRG and OGDC lost value to weigh down on the index by -34 points.

    Traded volume and value for the day stood at 292 million shares and Rs.9.57 billion respectively.

    UNITY was today`s volume leader with around 28 million shares.