In a bid to alleviate the financial burden caused by the coronavirus outbreak, the federal government has introduced a comprehensive support package for small industrial and commercial units.
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Stock market plunges by 492 points as energy scrips remain under pressure
KARACHI: The stock market plunged by 492 points on Monday as energy scrips remained under pressure owing to slide in international oil prices. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,315 points as against 32,806 points showing a decline of 492 points.
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FBR notifies zero percent sales tax on services for construction industry
ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified sales tax on service at zero percent for construction industry as part of incentives announced by the prime minister for construction sector.
The FBR issued SRO 326(I)/2020 to amend Islamabad Capital Territory (Tax Services) Ordinance 2001, to reduce the sales tax on services at zero percent from five percent.
The FBR said that services provided by property developers and promoters (including allied services) relating to low-cost housing schemes sponsored or approved by Naya Pakistan Housing and Development Authority or under Government’s Ehsaas program, the rate of tax shall be zero percent subject to the condition that no input tax adjustment or refund shall be admissible.
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Banks to remain closed for Zakat deduction
KARACHI: Banks to remain closed for public dealing on Monday due to deduction of Zakat.
The State Bank of Pakistan (SBP) in a statement said that it will remain closed for public dealing on Monday, April 27, 2020, which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.
All banks / DFIs / MFBs shall, therefore, remain closed for public dealing on Monday, April 27, 2020.
However, all employees of the banks / DFIs / MFBs will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing).
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FBR exempts capital gain tax on sale of immovable properties
KARACHI: Federal Board of Revenue (FBR) has exempted capital gain tax on sale of immovable property under Tax Laws (Amendment) Ordinance, 2020.
A new clause (114AA) has been inserted in Part I of the Second Schedule to the Ordinance, whereby exemption from tax on capital gains has been provided to a resident individual on sale of constructed residential property (a house having land area up to 500 square yards and a flat having an area up to 4000 square feet) used only for personal accommodation by the said individual, his spouse or dependents and for which any of the utility bills are issued in the name of such individual.
The exemption shall not apply if it has been previously availed by such persons.
No amendment has been, however, made in section 236C of the Ordinance, which implies that sale of the above properties will remain subject to collection of advance tax at 1% of sale consideration, unless the seller obtains an exemption certificate from the Commissioner.
As per current provisions, capital gains on disposal of constructed property whose holding period exceeds four years is zero rated. Furthermore, in case such property is sold within one year of holding period, the amount of advance tax collected under section 236C at 1 percent of sale consideration is treated as minimum tax. It, therefore, appears that the purpose of this amendment is to provide an exemption from tax on capital gains on disposal of such constructed properties, which are held for less than four years.
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FBR issues procedure for sealing of transit cargo destined for India
KARACHI: Federal Board of Revenue (FBR) has issued procedure for sealing of transit trade cargo containers at Torkham-Peshawar and Chaman-Quetta, destined for Wahga border station for India.
Following procedure to be adopted under Customs General Order (CGO) No. 03 of 2020 under Pakistan Customs Container Security System (PCCSS) Procedure for sealing and desealing of transshipment, safe transportation, transit and export cargo.
(a) NON-CONTAINERIZED CARGO:
FIRST PORTION:
(i) After the goods, loaded in high wall Transport Unit (1st Transport Unit) of Afghanistan been processed as per rules by Torkham/Chaman Customers, the Transport Unit will be secured and covered in proper tarpaulin. The PCCSS staff Focal point (Entry) will enter the required data and apply the wire punch plomb seal or a wire seal. The container will be allowed to proceed to Peshawar/Quetta Dry Port under escort. The escort officer of Customs will carry he convoy note to Peshawar/Quetta Dry Port.
(ii) On arrival at Customs Dryport Quetta/Peshawar, the 1st Transport Unit will be moved to the Focal Point Exit. The escort officer of customs will hand over the convoy note to the PCCSS officer.
(iii) The PCCSS will enter the exact time and date of the arrival. In case the Transport Unit reaches within time, the PCCSS officer will inspect the truck and security of tarpaulin ad the registration number of the 1st Transport Unit and check the PCCSS wire punch plomb seal.
(iv) After satisfying himself that the seal and container are intact and not tampered, the PCCSS officer will generate discharge note which will be given to the Customs escort officer along with the convoy note.
(v) If the seal or container etc. is not found intact or there are reasons to doubt the integrity of cargo or seal, a discrepancy report will be filled out on the computer. The concerned PCCSS focal point will also report the matter to the Directorate of Transit Trade having jurisdiction for initiating necessary action under the law.
(vi) The Focal Point Exit Peshawar staff will cut and collect the used plomb seals and keep in a safe disposal box. The Incharge FP (Exit) will make arrangements for the proper disposal, recycling of the plomb seals.
(vii) The escort will return the convoy note to the Customs at Border Crossing Point.
SECOND PORTION:
(i) The goods will be loaded on the Pakistani trucks, hereinafter called the Second Transport Unit and released in the same as done at Border Crossing Point, with wire punch plomb seal or new wire seal by the Focal Point Entry staff at Peshawar/Quetta.
(ii) On arrival at Wahga border station, the Second Transport Unit will be moved to the Focal Point Exit and the escort officer of Customs will hand over the convoy note to the PCCSS officer.
(iii) The PCCSS officer will enter the exact time and date of the arrival. In case the Transport Unit reaches within time, the PCCSS officer will inspect the truck and security of the tarpaulin cover, check the registration number of the Second Transport Unit and the PCCSS wire punch plomb seal.
(iv) After satisfying himself that the seal and container are intact and not tampered, the PCCSS- officer will generate discharge note which will be given to the Customs escort officer alongwith the convoy note.
(v) If the seal or container etc. is not found intact or there are reasons to doubt the integrity of cargo or seal, a discrepancy report will be filled out on the computer. The concerned PCCSS focal point will also report the matter to the Directorate of Transit Trade having jurisdiction of initiating necessary action under the law.
(vi) The Focal Point Exit Wahga staff will cut and collect the used plomb seals and keep in a safe disposal box. The In charge FP (Exit) will make arrangements for the proper disposal, recycling of the plomb seals.
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Sindh releases over Rs2 billion for coronavirus emergency funds
KARACHI: The Sindh government has released an amount of over Rs2 billion under coronavirus emergency fund, which included funds for filed isolation center and distribution of ration.
According to details released by Sindh Finance Department regarding expenses issued date April 24, 2020 to dilute the economic impact of coronavirus and fight against the pandemic.
The details showed that an amount of Rs1.08 billion has been spent as special grant for distribution of ration to poor. The provincial government has spent Rs580 million for disbursement to all Deputy Commissioners (DCs) for distribution of ration to daily wagers.
Another amount of Rs500 million has been disbursed to all the DCs for distribution of ration to poor/ daily wages who are economically affected by spread of coronavirus.
The provincial government released an amount of Rs300.79 million to Indus Hospital Karachi. While another amount of Rs100 million has been released to director health services Hyderabad.
The Sindh government released fund of Rs134 million for setting up field isolation centre at Expo Center Karachi.
An amount of Rs30 million has been released for procurement of coronavirus rapid test kits. Further Rs50 million has been released for procurement of 2000 detection Kit CE-IVD marked Cat No. Z-Path. The provincial government also released an amount of Rs32.34 million for procurement of personal protection equipment (PPE).
An amount of Rs50 million has been released to health department secretariat. The provincial government issued funds amounting Rs50 million to DC Malir Karachi, Rs60 to DC Sukkur and Rs5 million to DC Larkana.
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NEPRA examines power audit report to secure consumers interest
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has decided to examine the power sector audit report and said that it will take every step to secure consumers’ interest.
In a statement issued on Saturday the regulator said that it is examining the recently released final Report by the Committee for power sector audit, circular debt resolution and future roadmap.
“The report has never been shared with the NEPRA Authority before despite a clear agreement on the onset with the Convener of the Committee,” it said.
NEPRA has constituted a team of experts to examine the report so as to prepare NEPRA’s detailed response and suggest suitable actions thereof. “NEPRA will take every action within its powers to ensure that consumer interest has not been compromised by carefully looking into any misrepresentation of facts and figures by any IPP as suggested in the report.”
NEPRA determines tariff as per the Council of Common Interest (CCI) approved Government policy and after carrying out quasi-judicial proceedings in an open and transparent manner.
Public hearings are held and participated by all the stakeholders including Government/ power sector representatives, industry experts, members of the civil society, media and legal experts.
Every single word during public hearing is recorded and verbatim transcript is maintained for any future reference.
NEPRA functions in the most professional manner, maintains the highest level of integrity and professional competence, duly acknowledged by local and international agencies.
“Earlier in Feb 2019, on reports of earning excessive profit by certain RFO based plants, NEPRA proceeded with the Suo Moto and issued notices against five RFO based plants namely (Nishat Power Limited, Nishat Chunian Power Limited, Atlas Power Limited, Attock Gen Limited, Liberty Power Tech Limited), according to the statement.
However, further proceedings were held up due to a restraining order issued by Honorable Islamabad High Court (IHC). Meanwhile, NEPRA is pursuing the case vigorously and it is likely to be decided shortly.
It is further emphasized that consumers’ interest is prime for NEPRA and we assure to do everything within our powers to safeguard it.
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Think tank discusses viability of reducing GST to five percent
ISLAMABAD: The second meeting of think tank on Saturday discussed the viability of reducing General Sales Tax (GST) from existing 17 percent to five percent on consumer goods to kick start consumer spending.
Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank, recently constituted under the directions of Prime Minister, to deliberate on the Covid-19 related economic downturn and mitigation of ensuing risks.
The forum discussed the need and scope for bailout package for large businesses and exporters apart from gauging the viability of reduction of GST on consumer goods, from 17 percent to 5 percent, to kick-start consumer spending for next two years.
The constraints of FBR amid high revenue targets in a shrinking economy were highlighted by Finance Secretary. Decision in this regard would be made after detailed consultations.
The forum has been mandated to provide platform for collective thinking on the emerging situation resulting from the Covid-19 related medical crisis and its spillover to economy.
Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib, Dr. Waqar Masood. Advisor to PM on Commerce and Finance Secretary are also part of it.
After extensive deliberations on emerging themes, the forum identified key areas for policy interventions, including monetary affairs and banking sector, fiscal matters and public finances, social safety nets, SMEs and large businesses, commodity prices, public health challenges and role of private sector and NGOs.
Advisor to PM on Finance apprised the forum about developments at G-20 forum regarding debt relief package. There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.
Participants highlighted the need for further downward revision in policy rate coupled with passing on the benefits of slashed oil prices in global market to public. The focus of the deliberations remained on strengthening of aggregate demand and supply of the economy, with emphasis on lower income groups and small firms.
Need for further liquidity for banks was discussed as strong and vibrant banking sector is essential to boost economy under such strong recessionary headwinds. Ways to further encourage remittances, agriculture financing and timely lifting of crops and vegetables from small farmers were analyzed.
The progress of ongoing cash disbursements under Ehsas program were shared. The need for gathering reliable data on recently laid-off works and timely cash transfers to the most vulnerable were emphasized.
Economists within the Think-tank stressed for the need of designing PSDP to facilitate labor intensive projects apart form crafting robust agriculture financing plans. The need for public private partnerships was elaborated to create fiscal space within public sector through these off-balance sheet financing arrangements which encourage private sector participation in public sector initiatives.
Professionals within group stressed for the need of oil price hedging, power sector debt securitization and creation of fiscal space through rescheduling of foreign and domestic debts. The need for designing lending programs for housing sector participants came under consideration including facilitation of end-users. The massive scope for mortgage backed financing in Pakistan was also highlighted.
Advisor to PM on Finance and Revenue took lead in picking most urgent themes for proper policy deliberations and decisions.
He shared that Prime Minster of Pakistan may participate in the next session to give boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for economy in pragmatic fashion.
Advisor decided that interventions with highest, medium and low impacts would be sorted out and aligned on the basis of short, medium and long term time horizons so that most essential tasks are pushed on priority basis, with proper funding and execution arrangements.
It was also decided that international think-tanks will be engaged for cross-leaning for select policy making players in Pakistan so that robust interventions are designed to bring relief to economy and most deserving segments of public.
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Tax liability for 2020 to be discharged with return for builders, developers
KARACHI: Builders and developers are required to discharge tax liability for tax year 2020 with the tax return. Commenting on Tax Laws (Amendment) Ordinance, 2020, tax experts at PwC A Ferguson said that the annual tax liability for a project is to be computed by dividing the total liability of the project under the regime by the estimated life of the project in years (which shall not exceed 2.5 years).
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