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  • SBP launches SMS service for issuance fresh currency notes for Eid-ul-Fitr

    SBP launches SMS service for issuance fresh currency notes for Eid-ul-Fitr

    KARACHI: State Bank of Pakistan (SBP) has launched SMS service for issuance of fresh currency notes to the general public for the celebration of Eid-ul-Fitr.

    The SBP on Friday said that the fresh currency notes will be available from designated commercial bank branches called “e-branches” and the sixteen field offices of SBP BSC.

    The booking of the service shall commence from 19th May, 2019, while issuance of fresh currency through mobile SMS service will start from 20th May and continue till May 31, 2019.

    The service will be provided through 1702 e-branches & 16 SBP BSC offices in 142 cities across Pakistan to ensure maximum geographical coverage. The charges for the service are Rs. 1.50/- plus tax, per SMS.

    The branch IDs of designated e-branches are available at SBP website http://www.sbp.org.pk, PBA website http://www.pakistanbanks.org, commercial banks websites and will also be displayed prominently outside designated e-branches. It may be noted that the branch ID for e-branch is different from the existing branch/SWIFT code of banks.

    Under this facility, a person may send an SMS message comprising his/her 13 digits CNIC/Smart card number along with the desired e-branch ID [e.g. 32453-3454432-1(space)KHI001] to short code 8877.

    In return, the person will receive an SMS containing redemption code, e-branch address and the code validity period. Redemption code received by the customer will be valid for two (02) working days as per the mentioned dates in the SMS.

    The customer may then approach the concerned e-branch along with his/her original CNIC/Smart card, a photocopy of the CNIC/Smart card and transaction code received from 8877 to obtain fresh currency notes. An individual can obtain three (03) packets of Rs.10/- and one (01) packet each of Rs. 50/- & Rs. 100/-.

    It is also notified that each CNIC/Smart card number or mobile phone number can only be used once.

    No transaction code will be issued to the sender in case he/she sends the same CNIC/Smart card number from different mobile numbers or sends different CNIC/Smart card numbers from same mobile number during the service.

    Further, the system shall provide the fresh currency notes on first come first serve basis and new bookings shall be closed once the system reaches its capacity. For any queries/complaints, the general public may contact the SBP BSC helpdesk at UAN (021) 111-008-877. The helpdesk facility will only be available during office hours.

  • KSE-100 ends down by 805 points on massive rupee depreciation

    KSE-100 ends down by 805 points on massive rupee depreciation

    The Pakistan Stock Exchange (PSX) witnessed another day of significant decline as the benchmark KSE-100 index lost 805 points, closing at 33,167 points compared to 33,971 points the previous day.

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  • Dollar makes record high at Rs150

    Dollar makes record high at Rs150

    KARACHI: The Pak Rupee deteriorated mercilessly on Friday to reach all time low at Rs 150 to the dollar in Interbank Foreign Exchange Market.

    The rupee fell around Rs3.50 to the dollar in intraday trading.

    The dollar is being traded at Rs 150 from last day closing of Rs146.50.

    Currency experts said that the government had left the local currency on market forces on the wishes of IMF.

  • Black money invested in immovable properties allowed whitening at just 1.5 percent of tax

    Black money invested in immovable properties allowed whitening at just 1.5 percent of tax

    KARACHI: The government has allowed whitening of money investment in immovable properties at nominal income tax rate of 1.5 percent on declaration made by June 30, 2019.

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  • FBR advised reducing income tax to half for exporters other than five zero-rated sectors

    FBR advised reducing income tax to half for exporters other than five zero-rated sectors

    KARACHI: Federal Board of Revenue (FBR) has been suggested to reduce the income tax rate to half for exporters not falling under five zero-rating scheme in order to promote and diversification of exports.

    Pakistan Business Council (PBC) in its tax proposals for forthcoming budget 2019/2020 said that at present the rate of tax deduction on export proceeds under Section 154 of Income Tax Ordinance, 2001 is one percent, which is same as for five export oriented sector as well as for other than five sectors.

    The council said that in order to promote diversification of exports instead of relying on only five specified sectors, rate of tax on export proceeds should be reduced to 0.5 percent from one percent for sectors which are not covered under the five specified export oriented sectors.

    Giving rationale for the change, it said that at present sales tax zero rating is available to five specified export oriented sectors on their input materials whereas such benefit is not available to other potential export sectors.

    Moreover, gas supply is also available to five specified sectors at 600/MMBTU whereas rate of gas per MMBTU for non-conventional sectors is Rs780 in addition to GIDC, which makes potential export uncompetitive and consequently, Pakistan is unable to diversify export markets.

    “In order to compensate such exporters and to promote export of other than five sectors, rate should be decreased to five percent for such sectors,” the PBC recommended.

    The PBC further pointed out that manufacturing bond/DTRE rules are cumbersome and in certain cases lack clarity whereby many potential exporters cannot avail them. Consequently, it results in lost exports.

    Therefore, it is recommended that manufacturing bond/DTRE rules should be modified to make it easily accessible and lend full clarity to allow exporters to fulfill potential export orders.

    The proposed amendment would increase exports by facilitating existing and potential exporters.

  • PTBA recommends eliminating 12 provisions of withholding tax in next budget

    PTBA recommends eliminating 12 provisions of withholding tax in next budget

    KARACHI: Pakistan Tax Bar Association (PTBA) has recommended abolishing 12 different provisions of withholding income tax in order reduce the cost of business.

    The apex tax bar of the country in its tax proposals for upcoming budget 2019/2020 recommended rationalization of withholding tax regime and in the first step it suggested eliminating 12 withholding tax rates.

    The PTBA said that withholding tax regime significantly impacts the taxpayers and Inland Revenue Officers (IRO) alike.

    On one hand, the regime increases the cost of doing business for a taxpayer and, on the other hand, it forces IROs to devote numerous resources in monitoring of withholding taxes.

    The monitoring of taxes’ goal can be achieved by out sourcing the professional auditor firm and ability of the officer may be used for other work.

    Even with the best efforts of the IROs, it is practically impossible to plug all the leakages of taxes withheld and deposit into the national exchequer.

    “Globally the withholding tax regime is only applicable to persons whose income is difficult to determine, easier to evade or more likely to cross national boundaries. Currently, in Pakistan, withholding tax regime has been made applicable to almost all the categories of taxpayers and nature of payment under 49 provisions of law been weaved into the indirect taxes,” the PTBA said.

    PTBA recommended revamping and rationalize of Withholding Tax Regime in order to reduce cost of doing business, complexity in the taxation laws and leakages in tax collection.

    As a first step, it recommended following provisions of law may be withdrawn in which no substantial revenue is being collected in the last three years and eight months of current fiscal year:-


     

    Sr. No.SectionDescription2018-19
    [Estimated on the basis of actual up to March, 2019]    		2017-182016-172015-16
    01156BWithdrawal of balance under Pension Fund.1001368676
    02235ADomestic electricity consumption.9177923121,730
    03236BAdvance tax on purchase of air ticket.559484303495
    04236DAdvance tax on functions and gathering.965839783622
    05236FAdvance tax on cable operators and other electronic media.49241921
    06236JAdvance tax on dealers, commission agents and arhatis etc.136123123109
    07236LAdvance tax on purchase of international air ticket.1,1311,2571,331999
    08236QPayment to resident for use of machinery and equipment.
         		644619328174
    09236RCollection of advance tax on education related expenses remitted abroad543397339367
    10236SDividend in specie.320452623
    11236UAdvance tax on insurance premium.424485397–
    12.236VAdvance tax on extraction of minerals.–0.1––
    Total––––

     
     

  • Sales tax rate in Pakistan highest in region: ACCA

    Sales tax rate in Pakistan highest in region: ACCA

    KARACHI: Association of Chartered Certified Accountants (ACCA) has said that the existing sales tax rate of 17 percent in Pakistan is the highest in the region.

    The existing rate of Sales Tax at 17 percent is one of the highest in the region with an average of around 12 percent in Asia (15 percent in India and Bangladesh, 10 percent in Indonesia and just 6 percent in Malaysia), ACCA said in its tax proposals for budget 2019/2020.

    Sales Tax should be used to broaden the tax base and not as a replacement of direct taxation.

    In order to avoid the net negative costs for the economy, the rate should be brought down to single digit in a phased manner with a proposed reduction to 14 percent.

    The association also recommended harmonization of inter-provincial and federal-provincial taxation for avoiding double taxation.

    It said that the conflicts between various provincial revenue authorities and the federation are resulting in double taxation of services owing to the classification and jurisdiction disputes.

    Also, standardizing the applicable rates while also reducing them could facilitate the businesses while also increasing the tax revenues simultaneously.

    Similarly, the lack of inter-provincial harmonization also results in double taxation of services owing to the classification and jurisdiction disputes.

    These issues should be resolved to create a business-friendly environment and facilitate the tax-payers.

    Point of origination or deliverance of services can be agreed upon by all revenue authorities as the basis of classification and the resulting jurisdiction to resolve the major inconvenience to the taxpayers.

    The ACCA highlighted the issue of adjustable input tax and said with the introduction of the STRIVE system resulting online matching of invoices, the chances of sales tax fraud and/or error have been minimized.

    Therefore the current restriction of limiting the input tax adjustment to 90 percent (ninety percent) of the output tax is outdated and needs to be abolished.

    This will be in line with the principles of fairness, equity and justice for all and help restore the confidence of businesses.

    The association also pointed out revision of sales tax return and said this should be made easy and automated as with the STRIVE system in place, chance of tax fraud are minimized to the maximum possible extent as claimed by FBR.

    It further pointed out that in line with the principles of fairness, equity and justice for all, the appeals should be heard by a person not under the administrative jurisdiction/influence of FBR.

  • forex reserves decline by $78 million to $15.89 billion

    forex reserves decline by $78 million to $15.89 billion

    The State Bank of Pakistan (SBP) announced on Thursday that the country’s foreign exchange reserves decreased by $78 million, bringing the total to $15.894 billion for the week ending May 10, 2019. This decline is attributed primarily to foreign debt payments.

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  • Pakistan approaches IMF on bad economic conditions: Dr. Hafeez Shaikh

    Pakistan approaches IMF on bad economic conditions: Dr. Hafeez Shaikh

    KARACHI: Pakistan has approached the IMF for a new loan program due to bad economic conditions of the country, Advisor to Prime Minister on Finance Dr. Hafeez Shaikh said on Thursday.

    Advisor to PM Dr. Hafeez Shaikh was addressing a press conference at Governor House, Sindh. Governor Sindh Imran Ismail and Chairman Federal Board of Revenue (FBR) Shabbar Zaidi was also at the press conference. A large number of businessmen were also at the event.

    He said that in order to strengthen the economic condition the government had planned sort-, medium- and long term programs.

    The advisor and the FBR chairman briefed about the IMF loan program and amnesty scheme.

    Imran Ismail said that the government wanted to resolve industries problem at their doorstep.

    In this regard Sindh Industrial Liaison Committees were formed to speed up the resolution process.

    On the occasion, FBR chairman said that the latest amnesty scheme was supported by the entire business community.

    He said that amnesty scheme would generate sizeable revenue which would bode well for the country’s economy.

  • KSE-100 ends down 321 points on panic selling

    KSE-100 ends down 321 points on panic selling

    KARACHI: Pakistan Stock Market (PSX) on Thursday fell by 321 points in panic selling over significant decline of rupee against dollar.

    The benchmark KSE-100 index of PSX closed at 33,971 points as against 34,292 points showing a decline of 321 points.

    Analysts at all the gains made yesterday got eroded in early trading. During the session, the index slid by 717 points however, recovered by the end resulting in closing of – 321 points.

    Panic selling ensued increase of Dollar in inter-bank market.

    The spread widened in early trades that caused investors to get jittery, which was followed by across the board selling.

    Cement, Steel and Auto Sector scrips received most of bantering whereas selling was generally observed in scrips that positively relate to increase in rupee dollar parity. Buying activity was seen mid day that resulted in recovery of ~500 points.

    By the end of session, SBP’s notification for release of Monetary policy on May 20.

    Sectors contributing to the performance include E&P (+78 points), Power (+16 points), Banks (-112 points), Cement (-69 points), O&GMCs (-62 points), Fertilizer (-49 points), Pharma (-21 points).

    Volumes declined from 111 million shares to 109 million shares (-2 percent DoD). Average traded value however, declined by 16 percent DoD to reach US$ 26.5 million as against US$ 31.5 million.

    Stocks that contributed significantly to the volumes include KEL, PIBTL, UNITY, TRG and PSX, which formed 35 percent of total volumes.

    Stocks that contributed positively include POL (+55 points), PPL (+41 points), HUBC (+27 points), PAKT (+9 points) and NESTLE (+6 points). Stocks that contributed negatively include HBL (-38 points), LUCK (-25 points), PSO (-23 points), MCB (-21 points) and OGDC (-19 points).