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SBP issues fake call alert; advises not to share account information

KARACHI: The State Bank of Pakistan (SBP) on Sunday issued alert warning general public that unscrupulous elements are making phone calls to collect account holders information.

“It has come to the knowledge of SBP that unscrupulous elements are making phone calls to individuals, impersonating as officials of SBP or other agencies, seeking personal information regarding their deposit accounts on the pretext that SBP is collecting information from banking customers in light of emergency declared in the country due to COVID-19,” the SBP said.

In some instances, the fraudsters also claim that the information is required to ensure smooth functioning of their accounts in case ATM services become unavailable.

The central bank said that it never seeks details of account holders of any bank and all such calls made on its behalf are a hoax and with fraudulent intentions.

Public is advised not to respond to any such calls and provide any information.

Please report such calls to your bank immediately.

In addition, these call can also be reported to SBP helpline at 021-111-727-273 (during business hours) or at email [email protected].

June 7, 2020
PTBA recommends restoring Rs1.2 million threshold for salaried persons

KARACHI: Pakistan Tax Bar Association (PTBA) has recommended to restore basic threshold of Rs1,200,000 for salaried persons in the budget 2020/2021.

According to a presentation of Zeeshan Merchant, advocate high court, given on behalf of the PTBA, urged the government to restore the basic threshold of Rs1.2 million that was available for tax year 2019 and the rates applicable for tax year 2019 for salaried persons, individuals and Association of Person (AOPs).

Alternatively, the tax bar urged the authorities to allow a tax reduction of at least 25 percent of the tax payable to individuals and AOPs, who are subject to tax under Part I of First Schedule to the Income Tax Ordinance, 2001.

The tax bar highlighted that income under the head ‘salary’ is currently taxed on the gross amount. This policy was introduced by bringing down the corresponding rates of tax for each income slab. However, gradually the income slabs as well as rates of tax were enhanced without restoring the deductible allowances when income from salary was taxed at higher rates.

The PTBA proposed that either rationalize the rates of tax or restore the deductible allowances on account of house rent, utilities, conveyance etc. to minimize the tax burden of salaried individuals.

Giving rationale, the PTBA said that it is not justified to tax the salaried individuals (particularly in high income slabs) at such a high rate when other taxpayers are subject to tax on their net profits at much lower rates.

The limit of Rs1,000,000 for loan to employees below benchmark rate provided under Section 13(7) of the ordinance should be increased to Rs3,000,000.

June 7, 2020
COVID-19 claims four more taxmen as IR offices open on Saturdays

KARACHI: Four more officials of Inland Revenue have died of COVID-19 as field offices of Federal Board of Revenue (FBR) were remained opened on Saturday.

The offices of Federal Board of Revenue (FBR) were remained opened on Saturday as four more officials of Inland Revenue died of coronavirus, sources said.

The officers were posted at Large Taxpayers Unit (LTU) – II Karachi and Corporate Regional Tax Office (CRTO). These officers were included Masood Anwar, Riffat Kamal, Mirza Shahab Baig and Khawaja Muhammad.

Earlier, three officials of RTO Quetta and RTO Faisalabad reportedly had also died of the infection.

The sources said that score of cases had been tested positive in various RTOs and LTUs across the country in recent days.

Latest statistics updated on Saturday reported that the cases of COVID-19 increased to 93,983 out of which 1,935 deaths were reported.

The sources said that during 10 -15 days the cases had been reported at more faster pace in the FBR.

However, despite the fact the FBR had decided to open the IR offices on Saturdays.

A notification issued by the FBR a day earlier stated that the IR offices would observe normal working day on Saturdays from June 06 to June 30, 2020.

The decision to open the offices was taken to achieve Rs415.5 billion during June 2020 in order the meet the revenue collection target of around Rs3,933 billion for the current fiscal year.

June 7, 2020
COVID levy on wealth of individuals, AOPs under consideration

ISLAMABAD: In order to generate revenue in the wake of coronavirus pandemic the government is considering to impose COVID levy, which may be on the wealth of individuals and Association of Persons (AOPs), sources said.

The sources said that the levy may be collected up to one percent of Rs100 million wealth declared by individuals / AOPs.

The government may introduce this levy through Finance Bill, 2020.

However, in case the income tax liability is more than the proposed levy then the chargeability of tax may under normal tax regime.

Further, this levy may not be imposed on corporate entities.

The COVID tax may be imposed as was introduced through Income Support Levy in 2013.

The sources said that the revenue collection of the Federal Board of Revenue (FBR) was adversely affected due to coronaviurs. They said that in the present scenario the government was not intending to burden the taxpayers, especially business concerns, through introduction of new taxes.

However, through this levy may be utilities for the support the efforts to combat against the pandemic.

The sources said that the estimated amount to be generated through this levy was may be around Rs30 billion.

June 6, 2020
Weekly Review: stock market to move with budget expectations

KARACHI: The stock market likely to move with the news flows related to budget 2020/2021 which is scheduled to announce on June 12, 2020.

Analysts at Arif Habib Limited said that with Federal Budget announcement scheduled for June 12, 2020, the market is expected to track budget related news flow.

Whereas market performance for June 2020 remains critical as during first eleven months of current fiscal year, the index has delivered a return of +0.09 percent in Pak Rupee terms.

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 ~8.2 percent versus ~2.8 percent offered by the region.

The market opened on a positive note this week, welcoming further ease in lockdown and opening up of several businesses with Standard Operating Procedures (SOPs) in place.

Moreover, rising oil prices, with revival of economic activity internationally, kept the E&P scrips under limelight. Besides this, inflation for the month of May 2020 also declined to 8.2 percent, in line with expectations while improvement in exports on a MoM basis also relieved investors.

While anticipation of relief reforms in Budget 2020-21 also kept the sentiment alive.

However, rapid spread of COVID-19 cases and decline in foreign reserves by USD 1.67 billion being reflected in the Pak Rupee-USD parity (depreciation to 163/USD this past week) prevented the market from outperforming.

The market settled at 34,350 points, gaining 419 points (up by 1.2 percent) WoW.

Sector-wise positive contributions came from i) Commercial Banks (401 points), ii) Oil & Gas Exploration Companies (78 points), iii) Automobile Parts & Accessories (32 points), iv) Textile Composite (25 points) and Pharmaceuticals (19 points).

However, sector-wise negative contribution came from i) Fertilizer (53 points), ii) Power Generation & Distribution (30 points) and Insurance (25 points). Scrip-wise positive contributions were led by MCB (110 points), UBL (100 points), POL (66 points), HBL (66 points) and BAHL (54 points).

Foreign selling continued this week clocking-in at USD 15.3 million compared to a net sell of USD 2.4 million last week. Selling was witnessed in Commercial Banks (USD 5.0mn) and Textile Composite (USD 4.4 million). On the domestic front, major buying was reported by Companies (USD 7.4 million) and Mutual Funds (USD 6.6 million).

Average Volumes settled at 157 million shares (down by 27 percent WoW) while average value traded clocked-in at USD 39 million (down by 27 percent WoW).

June 6, 2020
FBR starts payment of income tax refunds

ISLAMABAD: Federal Board of Revenue (FBR) on Friday started payment of income tax refunds directly to the bank accounts of those taxpayers who have provided their IBAN.

FBR sources said that the FBR had received Rs10 billion from the finance division for the payment of income tax refunds. The FBR issued cumulative up to Rs5 million to a taxpayer.

The FBR explained term cumulative as the total amount of refund in respect of a taxpayer (for the tax year 2014 to 2019) duly processed and sanctioned under the law.

The release of income tax refunds is under Prime Minister’s relief package in order to reduce impact of the coronavirus on businesses.

Under the prime minister package an amount of Rs100 billion has been allocated for the payment of claims under sales tax, income tax and duty drawback.

FBR sources said that so far around Rs58 billion, including income tax refunds, had been disbursed to the claimants.

The business community was not happy with the decision to put restriction on disbursement of income tax refunds.

It is most unfortunate and disappointing to know that FBR has put ceiling of Rs. 5 million (cumulative of 5 years).

This has closed the access to even those business entities which have cumulated tax refunds of even one rupee more than Rs. 5 million in 5 years from 2014-15 to 2018-19income tax refunds.

Nisar said that the said ceiling instructions issued by FBR is discriminatory and strongly asked Finance Ministry to instruct for releasing of at least Rs. 5 million income tax refunds to all businessmen regardless of level of their income tax refunds accumulation in the last 5 years.

He said that the apex body is of the view that Ministry of Finance should also consider to release half of the accumulated income tax refunds to help in economic revival exercise under taken by the government.

June 6, 2020
FBR urged to allow tax holiday on import of industrial raw material

KARACHI: Federal Board of Revenue (FBR) has been urged to allow tax holiday to import of industrial raw material in order to help the country to fetch much needed foreign exchange through enhanced exports.

Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, said that Pakistan’s exports are limited to very few sectors.

Payment of cash subsidies and multiple currency depreciation failed to improve exports. As per Fifth Schedule to the Customs Act, 1969 Imports of Textile Machinery and equipment for textile sector is exempted from custom duty and rate of withholding tax is one percent by the textile manufacturing units registered with Ministry of Textiles whereas for other industries Customs Duty is levied at 5.5 percent which is discriminatory and an anomaly.

The exports of non-traditional items have not been promoted due to such discriminatory treatment.

Pakistan could not achieve true export potential which exists in many sectors.

The KCCI proposed that there is a need to go beyond textile and agriculture products.

Export diversification is important. For this all industrial machineries and equipment not locally manufactured may be exempted from Customs Duty, Additional Customs Duty/Sales Taxand Additional Sales Tax.

Withholding Income Tax may be charged at 1 percent, which may be Adjustable/Refundable.

Machineries with latest technology will be imported production will increase for local consumption and for global exports.

Employment and government revenue will increase.

June 6, 2020
Commercial importers demand abolishing CNIC condition, FTR restoration

KARACHI: Commercial importers have demanded the government of abolishing condition of Computerized National Identity Card (CNIC) and restoring Final Tax Regime (FTR) in order to save businesses from adverse impact of COVID-19.

Amin Yousuf Balgamwala, Chairman Pakistan Chemical Dyes and Merchants Association (PCDMA) and former Director of Karachi Stock Exchange has appealed to Prime Minister Imran Khan to restore FTR and SRO 1125 in the upcoming budget 2020/2021 in the best economic interest of the country so that trade and industry can be saved from complete destruction due to ongoing COVID-19 pandemic.

In an appeal to Prime Minister, Balgamwala said that the business of commercial importers has been ruined as a result of corona lockdown and severe economic crisis.

For the prevention of this pandemic all over the world including Pakistan were announced a lockdown to save the lives of masses.

Due to closure of industries and markets, the capital of commercial importers was stuck and now the situation has reached such a stage that commercial importers do not even have the funds to revive the import of raw material.

“If import of raw material would be stopped then it will be very difficult to supply raw material to export-oriented industries accordingly their requirement especially textile sector, which is the backbone of Pakistan economy, as country economy is already suffering from serious crises so if there is a shortage of raw materials, the production activities of the export-oriented industries including textile sector will also be hampered which will have a very negative impact on the country’s exports,” he pointed out.

PCDMA chairman questioned pursuing a pick and choose strategy by the government and said that it is a matter of concern for the business community but the government should understand the delicacy of the current extraordinary situation and provide relief to all sectors of economy.

“Whether it is the export sector or the import sector, the government should provide relief across-the-board without any discrimination so that the businesses and industries affected by the COVID-19 pandemic can get stand up again on their feet,” he opined.

Amin Balgamwala demanded the Prime Minister to abolish the CNIC condition on sale of goods to unregistered persons and said that if immediate relief was not given to commercial importers, they would be forced to close their business. In addition to reinstating SRO 1125, chairman PCDMA also demanded to restore a fixed tax regime (FTR), which is the only way to save trade and industry from collapse.

He also requested to keep petrol pumps open 24 hours a day for uninterrupted supply of raw materials to the industries and appealed to the Prime Minister to allow business 6 days a week also so as to offset the losses caused by the corona lockdown.

June 5, 2020
Stock market gains 231 points in range bound activity

KARACHI: The stock market gained 231 points on Friday while witnessing range bound activity during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,350 points as against 34,120 points showing an increase of +231 points.

Analysts at Arif Habib Limited said that the market traded range bound for the most part of the session but saw gaining volumes and points by the end that reflects an increase of 231 points.

Cement, Fertilizer and Pharma stocks showed signs of recovery. Some of the scrips in Pharma sector hit upper circuit like AGP and FEROZ. Banking sector stocks showed selling pressure amid low trading volumes.

Cement sector led the volumes with 16.1 million shares, followed by Technology (10.8 million) and Inv Banks (7.5 million). Among scrips, MLCF topped the chart with 6.6 million shares, followed by JSCL (5.2 million) and TRG (4.3 million).

Sectors contributing to the performance include Cement (+54 points), E&P (+50 points), Fertilizer (+46 points), Pharma (+45 points), Textile (+12 points) and Banks (-13 points).

Volumes declined from 143.6 million shares to 89.1 million shares (-38 percent DoD). Average traded value also declined by 29 percent to reach US$ 24.3 million as against US$ 33.9 million.

Stocks that contributed significantly to the volumes include MLCF, JSCL, TRG, UNITY and MACFL, which formed 27 percent of total volumes.

Stocks that contributed positively to the index include ENGRO (+41 points), POL (+21 points), LUCK (+15 points), SEARL (+13 points) and MARI (+13 points). Stocks that contributed negatively include MCB (-12 points), BAFL (-5 points), PSO (-3 points), SNGP (-3 points), and KAPCO (-2 points).

June 5, 2020
Rupee makes gain for third consecutive day

KARACHI: The Pak Rupee strengthened by 36 paisas against dollar for third consecutive day on Friday owing to inflows of export receipts and remittances.

The rupee ended at Rs163.30 to the dollar from previous day’s closing of Rs163.66 in interbank foreign exchange market.

Currency experts said that the supply of dollar into the market was seen in shape of remittances and export receipts.

The local currency witnessed gain against dollar for third straight day. The rupee gained Rs1.59 against dollar in last three trading days.

Earlier, in the first two days of the current week the rupee depreciated by Rs1.79 against the dollar.

The dealers said that the rupee was remained under pressure during the day. However, inflows of dollars in shape of remittances and export receipts helped the rupee to recover against the greenback.

Currency experts said that the deterioration in rupee value was due to higher demand for import and corporate payments.

Further, they said that after ease in lockdown the demand was increasing and importers started purchasing dollars for future buying.

The currency experts said that fall in exports and remittances also put pressure on the local currency.

June 5, 2020