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SBP decides not to issue fresh currency notes for Eid ul Fitr

KARACHI: State Bank of Pakistan (SBP) on Monday said that it will not issue fresh currency notes on this Eid ul Fitr.

The decision has been taken due to measures taken by the government to prevent spread of COVID-19.

The SBP issued a notification suspending the issuance of fresh currency notes to public.

The SBP said that the bank’s management had taken multiple precautionary measures to ensure social distancing and mitigate the spread of COVID-19.

“These include but are not limited to performing of only essential / critical functions, making comprehensive work from home arrangements, ensuring workplace SOPs, issuance of medical advisories, etc.”

Accordingly, the bank’s COVID-19 committee had decided not to issue fresh notes to general public and employees / ex-employees of SBP and its subsidiaries on occasion of Eid-ul-Fitr 2020.

May 4, 2020
PSX proposes funded pension scheme

KARACHI: Pakistan Stock Exchange (PSX) has proposed funded pension scheme that should offer old age benefits to retired employees at public sector enterprises and government workers, without putting burden on the annual budget.

At present, Pakistan’s pension scheme for government employees is an un-funded, pay-as-you-go scheme. Government of Pakistan exclusively finances the pension expenditure by obtaining a provision in the annual budget for this purpose.

This has all the making of an impending pension crisis in future, and places unfair burden on future generations. In case of public sector enterprises too, much of the pension liability remains unfunded.

The future monetary obligations are taken to be met from taxation, which places undue fiscal burden and responsibility on future generations. Age analysis of population suggests growing state pension expenses given the expected increase in the older age group.

These conditions have led to increasingly stressed pension arrangement.

Pension’s system reforms are focused on extending coverage to funded pension systems, which are professionally managed, extend to the informal sector, and facilitate switching from the existing employer schemes.

While in the public sector, funds have been created at the provincial level to pre-fund the future liability.

The PSX said that government of various countries have actively worked to provide financial security for their aging populations by maintaining adequately funded pension funds.

These pension funds invest in a diversified range of global assets including equities, bonds, mutual funds, ETFs, and even real estate, infrastructure, and alternative assets.

In Canada, the CPPIB (Canada Pension Plan Investment Board) is the government’s primary pension scheme, and has grown to become one the largest pension funds in the world.

The CPPIB invests in the full stack of assets outlined above and returns are used to finance government’s pension liabilities every year. This takes the burden of pensions away from the annual budget.

The CPP fund now manages over $409.5 billion in asset, up from $128 billion in 2010.

An actively managed government pension fund in Pakistan will also help channel investment towards capital markets, since equities feature heavily at global pension funds.

In Pakistan, the federal government could set up such an investment holding as a single-purpose asset management company with 100 percent control, and run by professional investment managers.

The government should start funding its pension liabilities to avert a future pension crisis and encourage capital formation in Pakistan. An adequately funded pension scheme would offer old age benefits to retired employees at public sector enterprises and government workers, without putting burden on the annual budget. Further, it is recommended that a certain percentage of the funded pension scheme be invested in the capital markets.

With Pakistan facing very high levels of poverty and the Government of Pakistan facing a rise in the old age population and having a scarcity of resources and funds to provide any old age benefits. An adequately funded pension scheme is one of the resources which the Government of Pakistan could offer to facilitate retired public sector employees.

This would result in improvement in liability management of Federal Government Employees Pension Scheme.

Appropriate amendment to be made in the Income Tax Ordinance, 2001.

May 4, 2020
Stock market falls by 195 points amid profit taking

KARACHI: The stock market witnessed decline of 195 points on Monday amid profit taking during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,916 points as against 34,112 points showing a decline of 195 points.
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May 4, 2020
SBP allows circulation of quarantined infected banknotes

KARACHI: State Bank of Pakistan (SBP) has advised banks to use the infected banknotes that have completed 14 days quarantine period.

The SBP on Monday issued advisory for banks related to COVID-19 – Uninterrupted Supply of Disinfected Cash at Banks and ATMs.

The SBP previously issued a circular dated March 23, 2020 under which banks were advised to disinfect, seal and quarantine the cash collected from hospitals and clinics, until further orders. The banks were given credit for all such cash so quarantined and kept on behalf of SBP.

In the meanwhile, central banks’ practices on the matter have been reviewed which indicate that quarantine of cash for 14 days is sufficient to disinfect the banknotes, which can then be put back into circulation.

Similarly, the World Health Organization has also advised that the life of the virus on porous surfaces (such as paper banknotes) is lower, compared to other hard surfaces.

In view of the above, banks are allowed to use the quarantined cash, which have completed quarantine period of fourteen (14) days.

Consequently, the credit given to banks on account of quarantined cash would be reversed on the fifteenth (15th) day from each reported date.

However, the facility of same day credit for quarantined cash introduced via FD Circular No. 1/2020 dated March 23, 2020 shall continue with contra debit on 15th day, as stated above.

May 4, 2020
April gains result best performing month for equity market in past 10 years

The Karachi Stock Exchange (KSE) experienced an extraordinary surge in April 2020, recording an impressive increase of 4,880 points. This translates into a return of +16.7 percent Month-on-Month (MoM) and +21.5 percent in USD terms, marking the best-performing month since March 2009.
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May 4, 2020
Rupee gains 26 paisas against dollar on IMF inflows

KARACHI: The Pak Rupee gained 26 paisas against dollar on Monday owing to inflows of IMF loan payment.

The rupee ended Rs159.91 to the dollar from previous close of Rs160.17 on April 30, 2020.

Currency experts said that the rupee appreciated due to inflows of IMF funds and decline in international oil prices.

They said that local currency would gain in coming trading days due to fall in international oil prices and improved external accounts.

They said that that improved foreign direct investment and shrinking current account deficit helped the local currency to make gain.

The inflow of Foreign Direct Investment (FDI) into Pakistan has witnessed sharp growth of 137 percent during first nine months (July – March) 2019-2020.

The FDI increased to $2.15 billion during first nine months of current fiscal year as compared with $905 million in the corresponding period of the last fiscal year.

Current account deficit (CAD) has contracted by 73 percent during first nine months (July – March) 2019/2020 due to significant decline in import bill.

The current account deficit fell to $2.77 billion during first nine months of current fiscal year as compared with $10.28 billion in the corresponding period of the last fiscal year.

May 4, 2020
Misuse of Afghan transit trade should be checked

KARACHI: Smuggling through Afghan Transit Trade has always been the biggest threat for economic growth and hardly any sector has been left untouched by this menace.

Pakistan Business Council (PBC) in its proposals for budget 2020/2021 said that smuggled goods through the borders of Afghanistan, Iran China, India and the Afghan Transit Trade form a chunk of the informal economy, volume of which ranges between 50 to 60 percent of the formal economy.

It is costing the national exchequer in billions. Markets across the country are flooded with smuggled goods and local industries are struggling for survival as smuggled goods are not only easily available everywhere but are also attracting the buyers who prefer foreign merchandise Goods moving under ATT from Pakistan to Afghanistan should be charged with duties and taxes under the Pakistani laws and the same should be transferred to Afghan Government.

Secondly, the duties/taxes so paid should be deposited with State Bank in USD.

A quantitative restriction should be applied on goods moving under ATT on the basis of consumption.

Allow industry to fairly compete with unscrupulous imports, Government to benefit from increased revenue.

May 4, 2020
Curtailing powers of tax officers in recovery, entering premises suggested

KARACHI: Business community has suggested curtailing powers of tax officers while invoking provisions of sales tax laws.
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May 4, 2020
Sales tax rate reduction: Think tank to discuss with FBR

Islamabad – The Federal Government’s think tank convened its third meeting on Sunday to deliberate on fiscal measures, including sales tax, aimed at mitigating the economic challenges arising from the COVID-19-induced slowdown. The discussion, chaired by Advisor to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh, emphasized the critical role of sales tax adjustments in spurring consumer spending and economic recovery.
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May 4, 2020
Sindh allows property registrations; issues SOPs

KARACHI: The Sindh government has allowed registration of properties from Monday May 04, 2020 with certain restriction to ensure compliance of lockdown to prevent spread of coronavirus.

The provincial government has permitted Board of Revenue (BOR) to allow functioning / opening of the offices of sub-registrars in Karachi Division with effect from May 04, 2020 with the condition of strict observance of Standard Operating Procedures (SOPs).

The Sindh government issued following SOPs for functioning of sub-registrar offices:

01. The offices of sub-registrars shall start functioning from 10:00 am daily on all working days and close at 4:00 pm during Ramazan ul Mubarak and on the notified office timings of the government of Sindh in the subsequent months;

02. Each aspirant for registration of document shall contact the concerned sub-registrar through one of the messaging services (SMS/Whatsapp) to get an appointment of a fixed time reserved for execution of his/her documents;

03. Each party shall get a fixed time of 20 minutes, and the party concerned shall be obligated to reach within the office premises at least five minutes earlier, and get their presence acknowledged by the concerned officials/ peshkar;

04. No person shall be allowed to enter the office without demonstrable message of appointment;

05. Only actual executants and identifiers shall be permitted to enter the office who all shall make sure that they present themselves in the office at the fixed time;

06. If any one of the mandatory signatories is missing, the documents shall not be received, and a new time shall be given;

07. The executants shall bring along their hand sanitizers; sanitize their hands before and after execution/registration of the document; wear a recommended face mask; maintain social distancing among themselves and with the staff;

08. No executants/identifier shall be allowed entry in the office premises unless he/she has adopted the above protective measures;

09. The executants and identifiers shall stand in a queue at their designated spot marked by the sub-registrars at three feet distance for each person;

10. The entire job shall be completed within 20 minutes where after the parties shall leave the office, and the next party shall be called in;

11. For the party in waiting, there shall as well be markings at three feet distance for each individual in the corridor or other appropriate place to be identified by the sub-registrar concerned. Such notices shall be displayed at conspicuous places for public information;

12. No hand shake or other means of body touch shall be permissible;

13. It shall be lawful for the sub-registrar to defer registration by putting a specific note about violation of these SOPs and / or other relevant SOPs notified by the Home Department Government of Sindh by any one or more persons from amongst the executing parties;

14. Minimum nuclear staff shall be called for duty;

15. The sub-registrar shall be duty bound to follow and implement the SOPs.

16. The sub-registrar shall keep his office, record etc. disinfected continually;

17. The entire staff shall put on face mask and hand gloves of appropriate specifications;

18. The district registrar shall constitute monitoring team, and shall himself carry out surprise visits to the office of sub-registrars to check whether the SOPs are being followed in letter and spirit;

19. A daily log of inspections along with a brief account of the observations shall be submitted to the inspector general of registration Sindh and Member RS&EP Board of Revenue Sindh;

20. The concerned deputy commissioner/assistant commissioner shall carry out surprise inspection of the offices of sub-registrars to monitor implementation of the SOPs and upon finding any violation, the deputy commissioner shall immediately generate a report for senior member board of revenue for criminal/departmental action;

21. No private person shall be allowed entry in the scanning or audit office;

22. All the relevant SOPs notified by the Home Department shall be additionally followed in letter and spirit; and

23. The sub-registrar shall cause these SOPs to be conspicuously displayed in and outside his office.

May 3, 2020