KARACHI: The successful operation by law enforcement agencies (LEAs) against the terror attack on the Pakistan Stock Exchange (PSX) on Monday boosted investor confidence, resulting in the KSE-100 index closing with a gain of 242 points.
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Dollar strengthens to Rs168.19
KARACHI: The Pak Rupee ended down by 52 paisas against dollar on Monday owing to higher import and corporate payment demand, dealers said.
The rupee ended at Rs168.19 to the dollar from last Friday’s closing of Rs167.67 in interbank foreign exchange market.
The currency dealers said that the rupee was remained under pressure due to demand from importers and corporate buyers. They said that due to ending of the fiscal year most of multinational and foreign companies send profits to their parent companies.
They further said that the ease in lockdown the business activities had started to get momentum and escalated the demand for imported goods.
The currency dealers further said that the repayment of foreign debts had also weakened the rupee value.
It is pertinent to mention that the SBP received around $1.7 billion last week from international financial institutions. However, the inflows also failed to give support to the local currency.
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Pakistan Stock Exchange terror attack; all terrorists killed
KARACHI: The security forces have failed a terrorist attack on Pakistan Stock Exchange (PSX) on Monday morning and killed all the four terrorists. However, four security guards and police personnel also died in this attack.
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FBR grants Rs45 billion customs duty exemption under free trade agreements
In a significant move to bolster trade and economic relationships, the Federal Board of Revenue (FBR) has granted Rs45 billion in customs duty exemptions and concessions on imports under various Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) for the fiscal year 2019/2020.
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Illegal trading of currency, gold to be liable for imprisonment up to 14 years
KARACHI: Passengers or crew members found involved in illegal trading of currency, gold or precious stones to be convicted with up to 14 years imprisonment along with huge amount of fine and penalty.
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Minimum tax to apply on non-resident PE companies
KARACHI: The minimum tax on turnover has been proposed to impose on non-resident companies having permanent establishment (PE) in Pakistan.
The amendment in Section 113 of the Income Tax Ordinance, 2001 has been proposed through Finance Bill, 2020.
According to EY Ford Rhodes Chartered Accountants the Section 113 of the Ordinance levies minimum tax on a person based on his turnover where such person is not liable to pay tax due to various reasons listed therein.
However, the levy of minimum tax in case of corporate taxpayers, is only applicable on resident companies.
This means that foreign companies having a permanent establishment in Pakistan (including a branch) are not subject to minimum tax.
The Finance Bill 2020 has now proposed to include non-resident companies having a permanent establishment in Pakistan under the domain of minimum tax on turnover.
Consequently, such companies would be required to compute minimum tax under Section 113 of the Ordinance for determination of their ultimate tax liability.
It may be noted that in the matter of levy of tax on non-resident persons, as per Section 107 of the Ordinance, the provisions of the Avoidance of Double Tax Agreement between Pakistan and the respective country would prevail over the provisions of the Ordinance.
It needs to be appreciated that in most of the agreements Pakistan has signed with other countries, a permanent establishment of a non-resident in Pakistan would be taxable only on net income basis.
“Therefore, the applicability of minimum tax in case of a non-resident person having a permanent establishment in Pakistan may be put to a question where a avoidance of double taxation treaty prevails,” they said.
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FBR to get information of all persons entering, leaving Pakistan for broadening of tax base
KARACHI: Federal Board of Revenue (FBR) will get access to information of all persons entering or leaving Pakistan from federal investigation agency and bureau of emigration for the purpose of broadening of tax base.
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KCCI urges K-Electric to stop load shedding
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has expressed serious concerns of electricity shortfall which caused massive losses to trade and industry.
Agha Shahab Ahmed Khan, President KCCI urged the K-Electric to immediately stop the ongoing load shedding spell and focus on improving the infrastructure, particularly power generation capacity and distribution network which is in a terrible state.
In a statement issued, Agha Shahab pointed out that due to K-Electric’s poor performance, almost all the localities of Karachi and also the seven industrial zones have to suffer unannounced load shedding and power failures every day for many hours that results in substantial losses.
“The industries have suffered badly due to the outbreak of coronavirus and the subsequent lockdown for more than two months and now, K-Electric has also resorted to massive load shedding, which poses threat to the already staked survival of industries,” he said and asked ‘What is the motive behind carrying out immense load shedding in an extraordinary situation?’
“The unannounced and prolonged load shedding by K-Electric would prove to be the last nail in the coffin of industries and the economy”, he opined and added that People from different walks of life, who have been inhabiting in various localities, sought KCCI’s assistance to exert pressure on K-Electric’s management so that uninterrupted power supply in every area could be ensured.
He stressed that K-Electric must adopt measures on war footing to minimize the hardships being suffered by the citizens and the business community of the largest city of Pakistan which contributes a lion’s share of more than 70 percent revenue to the national exchequer. Karachiites are already under tremendous mental pressure due to coronavirus pandemic and their sufferings multiply further when they have to go through prolonged load shedding every day and night.
President KCCI said that K-Electric has been earning huge profits of billions of rupees every year but unfortunately, it has not been adequately investing on improving the dilapidated distribution network which was in a very bad shape as every year whenever the electricity demand shoots up in the city during summer season, K-Electric fails to deal with the situation and the public pays the price for this failure in shape of load shedding.
Agha Shahab further advised that as Monsoon season is just ahead and heavy rainfalls have been forecasted by the Metrological Department, K-Electric must act sensibly and responsibly, avoid repeating mistakes and adopt stringent measures to ensure uninterrupted and safe power supply during the rainy season. “Dozens of people were electrocuted during last year’s Monsoon season and the same situation may happen this year as well because no safety measures have been adopted so far hence K-Electric’s management must take up this matter on priority and devise effectively strategies to save precious lives in case the city undergoes torrential rains”, he added.
Agha Shahab requested Prime Minister Imran Khan, Governor Sindh Imran Ismail, Chief Minister Sindh Murad Ali Shah and other concerned ministers at the Federal and Provincial levels to review the situation and issue strict directives to K-Electric to improve its infrastructure and ensure uninterrupted power supply to public and also the business and industrial community who are already suffering terribly because of the outbreak of coronavirus pandemic.
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Weekly Review: Stock market likely to stay in green zone
KARACHI: The stock market likely to stay in green zone during next week as coronavirus cases are receding and investors are optimistic on inflows from international financial institutions.
Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week.
Since COVID-19 cases have started to decline day-on-day basis, investment sentiment is expected to improve. With inflow of funds from ADB and World Bank, PKR/USD parity is expected to stabilize in the upcoming week.
With monetary policy announced we expect investors to cherry pick scrips from Cements, OMCs and Fertilizers sector.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.2x (2020) compared to Asia Pac regional average of 12.6x and while offering DY of ~6.5 percent versus ~2.8 percent offered by the region.
The market commenced on a positive note this week. However, sentiments turned negative amid plunge in international oil prices during the mid-week.
Furthermore pressure from downturn in international markets owing to concerns over a possible second wave of COVID-19 was also felt in local bourse.
With monetary aid received during the week from ADB and World Bank worth USD 1bn followed by current account turning surplus with USD 13 million in May 2020, sentiments shifted towards green side.
Along with this, SBP’s announcement of 100 bps cut provided further fuel to sentiment. Furthermore, extension in FATF’s deadline also provided breather to investors.
The market settled at 33,939 points, gaining 501 points (up by 1.5 percent) WoW.
Sector-wise positive contributions came from i) Fertilizer (326 points), ii) Cements (108 points), iii) Power Generation & Distribution (46 points), iv) Oil & Gas Marketing Companies (34 points) and Auto Assemblers (31 points).
However, sector-wise negative contribution came from i) Commercial Banks (90 points), ii) Tobacco (13 points) and iii) Pharmaceuticals (8 points). Scrip-wise positive contributions were led by FFC (101 points), ENGRO (95 points), DAWH (78 points), EFERT (47 points) and HUBC (44 points).
Foreign selling continued this week clocking-in at USD 9.9 million compared to a net sell of USD 4.8 million last week. Selling was witnessed in Fertilizer (USD 2.7 million) and Commercial Banks (USD 2.6 million).
On the domestic front, major buying was reported by Insurance Companies (USD 7.0 million) and Mutual Funds (USD 3.4 million). Average Volumes settled at 177 million shares (down by 23 percent WoW) while average value traded clocked-in at USD 35 million (down by 16 percent WoW).
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FBR urged to allow time extension making audit notice compliance
KARACHI: Pakistan Tax Bar Association (PTBA) has urged the tax authorities to allow time extension to taxpayers for making compliance in audit notices of tax year 2014.
In a letter sent to Ms. Nausheen Javaid Amjad, Chairperson, Federal Board of Revenue (FBR) on Friday, the PTBA urged to grant an extension of time under Section 214A of the Income Tax Ordinance, 2001 to complete the amendment of assessment proceedings for the tax year 2014 in order to provide sufficient time to taxpayers for compliance of such notices issued by the department in the best possible interest of the taxpayers at large.
The apex tax bar said that it had been brought to the notice that the officers of Inland Revenue had initiated amendment of assessment proceedings by issuing various notices under Section 177/174/176/122 of the Ordinance, ibid in the last month of June 2020 to the taxpayers for the year 2014 as the said tax year is going to be time barred as on June 30, 2020 under Section 122(2) of the Income Tax Ordinance, 2001.
Furthermore, the said notice have been issued with a short margin of only 2-3 days for compliance (which is not possible) and the officers are also reluctant to allow sufficient time to the taxpayers and their respected authorized representatives to respond against the notices in order to finalize it till June 30, 2020 to achieve budgetary targets by the end of this month.
The tax bar said: “This, once again, put the credibility of the FBR officials in question as there were six years available to those officers to complete the assessment proceedings after filing of income tax returns for the tax year 2014 but the department has been slept over all this time and now suddenly awake just to show efficiency by issuing such vague notices in order to complete the proceedings before it gets time barred.”
The PTBA informed the FBR chairperson that it had been held in a number of judgments as well as many directions had been given from time to time by the board to the officials to provide sufficient time/opportunity to the taxpayers to defend their case and provide sufficient explanation before an adverse order is passed against them. “But this has not been adhered to in the prevailing situation as the officers of FBR are busy in achieving their budgetary targets as well as to show their efficiency at the end of the financial year.”
Hence, such notices issued by the department not only torment the taxpayers but also lacks confidence of the taxpayers / consultants upon the department, it added.
“Nevertheless, the current pandemic situation of COVID-19 prevailing all over the country where many of the businesses and areas are still in lockdown situation, the taxpayers are unable to reach their as well as FBR offices to respond such notices issued by the department in such a short compliance period.”