KARACHI: Any change in the rate of sales tax shall apply at the time of supply or clearance of imported goods, as clarified by Section 5 of the Sales Tax Act, 1990, updated by the Federal Board of Revenue (FBR). This section outlines the specific rules for applying sales tax when rates are adjusted and provides detailed guidelines for taxable supplies and imports.
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Past revenue-centric policies hurt exports: Prime Minister
ISLAMABAD: Prime Minister Imran Khan has said that the revenue-centric economic policies of past governments have badly damaged the competitiveness of Pakistan’s exports.
The past the revenue-centric economic policies with overemphasis on collection of revenues made the industry uncompetitive, the prime minister said while chairing 80th Meeting of the Board of Administrators of Export Development Fund (EDF) at Prime Minister’s Office, according to a statement on Thursday.
The prime minister said that economic future of the country was linked with enhancement of exports which so far have remained far below the actual potential.
The present government has made a paradigm shift in prioritizing the competitiveness of industry vis-à-vis revenue collection.
The prime minister while expressing serious concern over the mismatch in collection and releases of the EDF during past years, directed that timely release of EDF, which was indeed the exporters’ money, be ensured during the current year while a comprehensive system be devised for the future to ensure unhindered releases and optimum utilization of EDF for its mandated purpose.
The Board of Administrators of EDF, reconstituted the Finance Committee of the EDF Board which will be chaired by the Advisor to the Prime Minister on Commerce.
The meeting approved budget and the schedule of activities to be held during TEXPO Exhibition 2019 at Lahore Expo Centre on 11th -14th April 2019.
It was also decided during the meeting that the EDF Board would also include Secretary Textile Division, as its member, to ensure representation of the textile sector, being the major contributor towards exports of the country.
Talking to the leading businessmen, the Prime Minister stated that the Government would continue taking the business community on-board in policy formulation process and their feedback would help the government further improve policy framework and to extend maximum facilitation to the exporters and the businessmen of the country.
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Bill to amend foreign exchange regulations presented
ISLAMABAD: The finance ministry has presented a bill in the parliament to amend foreign exchange regulations to stop illegal transactions.
A statement on Thursday said that in order to prevent illegal foreign exchange transactions, The ministry of finance has proposed to amend the Foreign Exchange Regulations Act (FERA) 1947 by introducing a bill “FER (Amendment) Act 2019”, in the National Assembly to empower the State Bank of Pakistan (SBP) to regulate foreign exchange regime in the country more effectively.
The proposed amendment has been approved by the Federal Cabinet and transmitted to Parliament for enactment.
The amendments would substantially strengthen the SBP’s powers to issue necessary regulations/instructions relating to inland movement of foreign currency and enable it to monitor such movement.
The measure is a part of government of Pakistan’s efforts to enhance the transparency of financial transactions.
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Banks may be asked verifying goods valuation to check trade based money laundering
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Interloop IPO’s 43pc subscription made through CDC’s electronic system
KARACHI: Stock market investors now prefer to use electronic IPO platforms to subscribe for new IPOs. In recent Interloop IPO, 43 percent of total subscriptions (both physical and electronic), or around 80 percent of all electronic subscriptions were made through CDC’s Centralized eIPO System (CES), said a statement issued on Thursday.
Central Depository Company (CDC)’s Centralized eIPO System (CES) has become the premium choice of stock market investors as 2283 investors in the Interloop IPO subscribed through CDC’s Centralized eIPO System (CES).
Investors had the option of physically submitting the IPO applications at designated banks, using Electronic IPO portals of designated Banks or using Centralized eIPO System (CES) of CDC.
The CES is an online portal, available 24 hours a day from anywhere in the world and connected with all leading banks.
This was also the first time that CDC introduced the IPO facilitation Account, an additional facility through which investors can subscribe securities even if they do not have CDC Account at the time of IPO subscription.
The investors can later open their accounts and get their securities transferred in their respective accounts, till then securities will be in safe custody of CDC.
This facility was introduced with the objective of facilitating new investors and encouraging maximum participation of retail investors in the IPO.
Around 900 new investors participated in the Interloop IPO through this facility, which is a testament of the pilot phase’ success.
In its continuous resolve to increase convenience for stock market investment, Central Depository Company of Pakistan Limited is taking regular initiatives to provide ease and efficiency for the subscription of shares offered through IPOs to general public.
Commenting on this success, CEO-CDC Badiuddin Akber said, “This is an important step towards expanding the investor base in the Capital Market.
“We are hopeful that this facility will be utilized by a large number of new investors and will become a good tool for attracting new investors towards our market.”
He further said that “While it is important to note that both CES and IPO Facilitation Account are free-of-cost facilities for investors, this endeavor is part of CDC’s long time commitment towards the development of Pakistan Capital Market and our continuous efforts to introduce new technological solutions to enhance ease of doing business.
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Rupee value to strengthen in coming days, SBP tells FAP members
KARACHI: State Bank of Pakistan (SBP) has said that the rupee value to stabilize as large payment was made last week.
Talking to representatives of Forex Association of Pakistan (FAP) on Thursday, Executive Director of SBP Syed Irfan Ali Shah said that last week large payments made last week and now the local currency would not devalue further, said a FAP press release.
He further said that the government had no intention to devalue the local currency.
He said that the local currency would depreciate with rising demand in interbank foreign exchange market but it would stabilize on easing demand.
“It has been seen today the rupee value strengthen in the interbank bank,” he said and added that the rupee value would further strengthen in coming days.
He said that the trade deficit would reduce to $12 billion from previous year’s $18 billion. He also hoped that the exports would grow to $28 billion from $23 billion.
The SBP executive director said that friendly countries including Saudi Arabia, Dubai, Malaysia, Singapore, Australia and China would make investment of around $20 – 30 billion next year. This will increase foreign direct investment, he added.
The government is also making all efforts to send skilled laborers abroad to increase workers remittances. These efforts will help increasing workers remittances from $18 billion to $25 billion, he added.
Earlier, FAP President Malik Bostan expressed reservations on the shortage of dollar in free market.
Bostan attributed the rising dollar rate to interbank because before the visit of IMF delegation on March 05 the interbank rate was Rs138.50 to the dollar and since than the dollar value increased by Rs3 to Rs141.50. This trend also prevailed in free market, he added.
He said that the government had admitted the IMF conditionalities on exchange rate policy that should be based on market forces.
Due to these conditions there are 80 percent buyers and 20 percent sellers in the cash free market, he added.
Malik Bostan said that the dollar demand was also higher due to Hajj season.
He also pointed out to a comment by Dr. Ashfaque Hassan, Member Advisor Council, who said that the dollar would reach Rs150. Such statements send negative message to the public, he added.
Malik Bostan said that the dollar demand was also rising due to conditions imposed on non-filer of income tax returns by the government as people had investment option in dollar, gold and prize bonds.
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FBR excludes salary persons from audit selection
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued Audit Policy 2018 and excluded salary persons from selection of audit.
The following exclusions have been identified and approved by the Board under relevant rules where selection for audit by the Board is not required.
Income Tax
i. All cases already selected for audit by the Commissioners Inland Revenue or Director I&I (IR) under section 177 of the Income Tax Ordinance for any of the preceding three Tax Years i.e 2014, 2015, 2016
ii. All cases already selected for audit under section 214D of the Income Tax Ordinance, 2001, for any of the preceding three Tax Years i.e 2014, 2015, 2016
iii. All cases where income chargeable to tax under the head salary exceeds 50% of taxable income, except cases having business income. Directors of companies do not qualify for this exclusion.
iv. All cases where entire income is covered under Final Tax Regime (FTR)
Sales Tax
All cases already selected under section 25 and 38 of Sales Tax Act, 1990 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for Tax Year 2016
Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.
ii. All cases already selected for audit under section 72B through computer ballot held under Taxpayers’ Audit Policy, 2017
iii. All cases of Steel Melters and Steel Re-rollers who are paying sales tax under the Sales Tax Special Procedure Rules, 2007.
iv. Federal, Provincial and Local Government Departments.
Federal Excise
i. All cases already selected under section 46 of the Federal Excise Act, 2005 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for tax year 2016.
Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.
ii. All cases already selected for audit under section 42B through computer ballot held under Taxpayers’ Audit Policy, 2017
iii. Federal, Provincial and Local Government Department.
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Pakistan’s foreign exchange reserves increase to $17.397 billion
KARACHI: The foreign exchange reserves of the country increased by $1.924 billion to $17.397 billion by week ended March 29, 2019 as against $15.473 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.
The reserves held by State Bank increased by $1.931 billion to $10.492 billion by week ended under review as compared with $8.561 billion by week ended March 22, 2019.
The SBP said that during the week ending March 29, 2019, the central bank received inflow of RMB 15 billion equivalent to US$2.2 billion as proceeds of the loan obtained by the government of Pakistan from China. After taking into account outflows relating to external debt and other official payments, SBP reserves increased by US$1,931 million during the week.
The reserves held by commercial banks, however, declined by $9 million to $6.904 billion from previous week’s level of $6.913 billion.
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Equity market declines by 507 points on selling pressure
KARACHI: The equity market declined by 507 points on Thursday due to selling pressure.
The benchmark KSE-100 index closed at 37,516 points as against 38,023 points showing a decline of 507 points.
Analysts at Arif Habib Limited said that the market took a nose-dive today with 100 index touching a low of 610 points and closed heavy red.
Selling was seen across the board amidst rumors of resignation of key government official and change of parliamentary form of government to Presidential format.
Initial start saw some positivity, however, selling pressure built throughout the day and stocks like Autos which performed well on the news of revocation of 10 percent FED on 1700cc and above vehicles couldn’t face the tide and eventually saw erosion of price gains made earlier.
UNITY rights (37.5 million) again contributed significantly to the traded volume 128 million, which was followed by Banks and Technology stocks.
Sectors contributing to the performance include Banks (-92 points), E&P (-72 points), Power (-66 points), Cement (-50 points), O&GMCs (-35 points).
Volumes declined from 153.3 million shares to 128.0 million shares (-17 percent DoD). Average traded value also declined by 9 percent to reach US$ 23.8 million as against US$ 26.3 million.
Stocks that contributed significantly to the volumes include UNITYR1, WTL, KEL, BOP and MLCF, which formed 56 percent of total volumes.
Stocks that contributed positively include MCB (+20 points), FFBL (+9 points), MEBL (+7 points), SRVI (+3 points), and APL (+3 points). Stocks that contributed negatively include HUBC (-53 points), UBL (-38 points), PPL (-25 points), HBL (-22 points) and ENGRO (-22 points).
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Rupee ends stable against dollar
KARACHI: The rupee ended stable against dollar on Thursday after government assurance of no link of rupee value with IMF deal.
The rupee ended at Rs141.40 to the dollar, the same previous day’s level, in interbank foreign exchange market.
The interbank foreign exchange market was initiated in the range of Rs141.39 and Rs141.40.
The market recorded day high of Rs141.40 and low of Rs141.399 and closed at Rs141.40.
The exchange rates in open market were also ended stable.
The buying and selling of dollar was recorded at Rs142.50/Rs143.00, the same previous day’s level, in cash ready market.
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FBR selects 14,164 audit cases through computerized balloting
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday selected total 14,164 audit cases through computerized balloting in income tax, sales tax and federal excise duty cases.
The FBR selected 10,982 audit cases under Section 214C of Income Tax Ordinance, 2001.
The revenue body selected around 3,126 sales tax cases under Section 72B of Sales Tax Act, 1990.
Further, 56 cases have been selected under Section 42B of Federal Excise Act, 2005.