KARACHI: Pakistan Business Council (PBC) has advocated abolishing anti-dumping duty on imported raw material that are used for export oriented units (EOU).
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SECP issues guidelines for license renewal amid COVID-19
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has issued guidelines for license renewal in order to facilitate companies considering difficulties due to COVID-19.
The SECP issued Circular No. 19/2020 for extension in time for renewal of licenses due to COVID-19.
The regulator said that the COVID-19 (coronavirus) had affected many businesses around the globe and had been declared as pandemic.
In order to facilitate the shareholders/directors/employees during this ongoing pandemic, the SECP issued the guidelines regarding renewal of their licenses, issued in pursuance of section 42 of the Company Law.
The SECP said that the companies whose license were due for renewal before the month of February 2020, and had not applied for renewal, their license shall be revoked in accordance with the provision of Section 42(5) of the Companies Act, 2017.
The SECP further said that the companies whose license had been expired in the months of February, March, April and May 2020 but had not applied for its renewal would continue to carry on their business and their license would not be revoked till June 30, 2020. However, upon receipt of their applications, license shall be renewed from the date of expiry of their existing license.
The regulator further said that the companies, which had applied for renewal of their license either before or after February 01, 2020 and certain deficiencies were also communicated to them, were required to respond to the quarries latest by May 30, 2020, failing which their license would be revoked.
“Companies, which do not find any difficulty in complying with the requirements of the renewal of their license, may apply in a routine manner,” the SECP said.
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Hafeez Shaikh directs FBR to collect data for effective budget making
ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh on Monday directed the Federal Board of Revenue (FBR) to collect data for effective budget making for year 2020/2021.
Dr. Hafeez Shaikh chaired a meeting at the Finance Division through video link with Dr. Ikram-ul-Haq to discuss proposals on improving the tax structure of the country with the help of effective data gathering and reconciliation mechanism.
He directed FBR to collect data through multiple sources that may be best used for effective budget making exercise.
Chairman FBR, Secretary Finance and ex-secretary Finance Dr. Waqar Massoud Khan were also present during the meeting.
The adviser appreciated the work done by Dr. Ikramul- Haq for gathering data across the country from selected markets and from different chambers of commerce and Industry.
Dr. Ikram shared with the adviser the important inferences from data gathering exercise and suggested certain techniques for data reconciliation that could improve tax collection in a more effective manner.
The adviser said that the basic purpose of this exercise is to consult experts to seek suggestions and insights so that the fundamental problems of the tax collection system in the country could be effectively addressed.
He said that as we are preparing the next budget, we should be more vigilant, practical and analyze the opportunities and challenges offered by the current environment.
The Government is ready to listen to all stakeholders to prepare a budget which is according to the need of the prevailing economic circumstances and innovative in providing solutions to the structural problems of the economy.
He asked the Expert to firm up his proposals in concise and doable manner and share the draft as early as possible with the ministry so that these proposals could be well incorporated in the upcoming budget.
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PIA declares Rs56 billion after tax annual loss
KARACHI: The national flag carrier, Pakistan International Airline, has declared after tax loss of Rs56 billion for the year 2019, according to financial results submitted to Pakistan Stock Exchange (PSX) on Monday.
The national flag carrier managed to reduce the annual loss by Rs10.66 billion from last year’s loss of Rs66.66 billion.
The net revenue of the airline increased by around 40 percent to Rs164.64 billion in 2019 as compared with Rs118 billion in the preceding year.
The cost of services including, cost of fuel, increased to Rs152 billion in 2019 as compared with Rs132.79 billion in the preceding year.
The airline manage to post gross profit of Rs12.65 billion for the year 2019 as compared with around Rs15 billion loss in the previous year.
The distribution costs of the airline increased to Rs7.33 billion from Rs6.3 billion. Administrative expenses of the airline also increased to Rs11.3 billion from Rs10.47 billion.
The airline incurred losses to the tune of Rs11.69 billion due to depreciation of rupee. The exchange loss was Rs15 billion in the last year.
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Share market falls by 203 points on profit taking
KARACHI: The share market fell by 203 points on Monday as investors preferred profit booking, analysts said.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,805 points as against 34,008 points showing a decline of 203 points (-0.6 percent DoD).
Analysts at Arif Habib Limited said that post rate cut last week, market posted some gains today, showing an upside of 385 points earlier in the session, however, profit booking caused Index to slide posting a decline of 238 points during the session and closing -203 points.
Banking sector primarily caused the plunge resulting in across the board price loss.
Cement sector also couldn’t escape the selling pressure, although rate cut meant to benefit the leveraged cement players.
Technology sector topped the chart with 56.2 million shares, followed by Cement (35.2 million) and Investment Banks (31.4 million). Among Scrips, TRG realized 22.5 million shares, followed by KEL (17.5 million) and WTL (17.3 million).
Sectors contributing to the performance include E&P (+54 points), Food (+19 points), Banks (-117 points), Cement (-58 points), Misc. (-42 points), Fertilizer (-39 points) and O&GMCs (-14 points).
Volumes increased from 213.3 million shares to 262.0 million shares (+23 percent DoD). Average traded value also increased by 17 percent to reach US$ 45.4 million as against US$ 38.8 million.
Stocks that contributed significantly to the volumes include TRG, KEL, WTL, MLCF and FCSC, which formed 34 percent of total volumes.
Stocks that contributed positively to the index include OGDC (+28 points), NESTLE (+25 points), TRG (+18 points), PPL (+18 points) and ICI (+13 points). Stocks that contributed negatively include PSEL (-34 points), MCB (-33 points), BAHL (-25 points), LUCK (-23 points), and FFC (-23 points).
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Foreign direct investment surges 127 percent in ten months
KARACHI: The inflow of Foreign Direct Investment (FDI) posted significant increase of 127 percent during first ten months of current fiscal year, State Bank of Pakistan (SBP) said on Monday.
The FDI was recorded $2.28 billion during July – April 2019/2020 as compared with $1 billion in the corresponding period of the last fiscal year.
The inflow under FDI was at $2.87 billion as compare during first ten months of current fiscal year as compared with $2.31 billion in the corresponding period of the last fiscal year.
Similarly, the outflows under the FDI was recorded 55 percent decrease to $590 million during the period under review as compared with $1.31 billion in the same period of the last fiscal year.
The portfolio investment posted 55 percent growth. The portfolio investment recorded outflow of $182 million during July – April 2019/2020 as compared with outflow of $408 million.
Total foreign private investment including FDI and portfolio investment urged 251 percent to $2.1 billion during first ten months of current fiscal year as compared with $598 million in the same period of the last fiscal year.
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OICCI lauds SECP for improving regulatory environment
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has praised Securities and Exchange Commission of Pakistan (SECP) for improving regulatory environment for registered entities.
In a statement on Monday the OICCI felicitated the SECP on the Companies (Amendment) Ordinance, 2020 promulgated on April 30th.
The Chamber, along with other leading business association, has in the past challenged some of the over-regulatory conditions introduced in the Companies Act 2017 without due engagement of the key stakeholders.
The amendments to the Companies Act 2017, according to OICCI members, will further improve the regulatory environment in line with regional practices.
Abdul Aleem, CE/Secretary General of the OICCI commenting on the amendments said: “foreign investors have always supported regulatory environment which are predictable, consistent and transparent.
“The recent April 30th 2020 amendments to Companies Act 2017 had been under discussion between the SECP and other stakeholders, including OICCI during a series of “Consultative session and feedback” meetings held in 2018 and 2019 and acceptance of several recommendation should be a matter of satisfaction for business entities.”
He further said ‘a few recommendations are still not part of the proposed amendments and we shall request SECP to also review these so as to attract sizeable FDI in these challenging, post COVID 19, global investment environment’.
Pakistan’s FDI for past several years has been less than one percent of the GDP against the regional norm of 3 percent and above.
Some of the key amendments in the Act which were challenged by the chamber, which have now been addressed in the amendments include; limiting the scope of the definition of “officer”, allowing a non-listed company to buy back its shares in line with the right already given to listed companies, doing away with the requirement for a ‘foreign national’ to hold National Tax Number as per the provisions of IT Ordinance, 2001, deletion of the clause where a director could be disqualified for a period up to five years if the affairs of the company have purportedly been conducted in a manner which has deprived the shareholders a reasonable return, deletion of the complete section whereby, inter-alia an independent director and a non-executive director were held liable in respect of some acts of omission or commission by a listed or a public sector company, deleting the personal liability of the Directors whereby they were required to make payments under certain circumstances including a situation where the return on the investments was not according to certain criteria, doing away with the impractical provision to deposit any unclaimed or unpaid amount to the credit of the Federal Government, introduction of a ten percent shareholding threshold in the much debated section on Companies’ Global Register of Beneficial Ownership and deletion of the section requiring security clearance before appointment of Directors.
A key matter recommended by OICCI, and other stakeholders, to delete the reference to ‘lineal ascendants and descendants’ from the ambit of related parties has not been addressed and OICCI has again requested SECP to review this important matter.
“Negative perception of Pakistan among potential foreign investors has been a key impediment in attracting sizeable FDI in the country. Pakistan’s rating in the World Bank Ease of Doing Business has only recently improved to 108 from being 147 in 2018 and needs much more business friendly measures to attract its due share of the global/regional FDI, ”Aleem concluded.
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Rupee falls by 27 paisas on improving demand
KARACHI: The Pak Rupee fell by 27 paisas against dollar on Monday owing to higher demand for import and corporate payments.
The rupee closed at Rs160.37 to the dollar from last Friday’s closing of Rs160.10 in interbank foreign exchange market.
Currency dealers said that the local unit was under pressure because market was opened after two weekly holidays.
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.
Overseas Pakistani workers sent home $1.790 billion in April, compared with $1.894 billion in previous month.
Pakistan received $18.781 billion in remittances in July-April FY2020, compared with $17.801 billion in the same period last year.
However, the experts said that the local currency recovered on the back of improved economic indicators.
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Motor vehicle tax collection plummets by 15 percent to Rs16.73 billion
ISLAMABAD: The collection of motor vehicle tax has registered 15 percent decline during first nine months of current fiscal year, according to data released by the ministry of finance.
According to fiscal operation for first nine months issued by the finance ministry showed that the provinces had collected Rs16.73 billion during July – March 2019/2020 as compared with R19.64 billion in the corresponding period of the last fiscal year.
The provinces have mandate to collect motor vehicle tax.
The lower collection of motor vehicle tax attributed to slowdown in economy and the cases of coronavirus started appearing in the month of March 2020, which resulted in lockdown.
The major slump in collection recorded by the Punjab province, which posted 19.5 percent decline to Rs9.55 billion during first nine months of current fiscal year as compared with Rs11.87 billion in the same period of the last fiscal year.
The Sindh province posted 4 percent decline to Rs5.52 billion during July – March 2019/2020 as compared with Rs5.75 billion collected in the corresponding period of the last fiscal year.
The collection of motor vehicle tax by Khyber Pakhtunkhwa registered 18 percent decline to Rs1.14 billion during first nine months of the current fiscal year as compared with Rs1.39 billion collected in the same period of the last fiscal year.
The province of Balochistan collected Rs515 million during first nine months of current fiscal year as compared with Rs615 million in the same months of the last fiscal year, showing decline of 16 percent.
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FBR proposed to ensure CPR for deposited withholding tax
KARACHI: Federal Board of Revenue (FBR) has been advised to ensure Computerized Payment Receipt (CPR) for deposited withholding tax in order to avert chances of revenue leakages.
Pakistan Business Council (PBC) in its proposals for budget 2020/2021 submitted to the FBR, said that presently the taxpayer has to deposit the withholding tax deducted fortnightly, i.e. within seven days from the end of each week ending on every Sunday.
In addition, certain WHT agent do not deposit on time and some agents do not deposit at all. This also includes agencies/govt. organizations in respect of withholding tax, where CPR is not provided hence revenue leakages to government in the absence of withholding tax deposit.
On the other hand, where withholding tax is deducted by agencies/government organization, but do not provide system (IRIS) generated CPR as they do not enter in the system. Therefore assesse cannot get input benefit due to non-availability of CPR from IRIS system on account of withholding tax in spite of reminders.
The PBC recommended that timeline of 7 to 13 days should be extended to one week after the month.
Besides, IRIS system should be applicable for all with holding agent including agencies/government organizations and CPR in respect of withholding tax facing authority should be available from IRIS.
This will help in ease of doing business and facilitate withholding tax agents.
Furhter, the proposed amendment will help in controling revenue leakages as well as assesse can claim input tax properly.
Thus neither it is loss to authority nor the assesse. In the absence of non-availability of CPR , this is an extra cost for doing business.