ISLAMABAD: Following is the complete list of withholding tax rates applicable for tax year 2020. The rates have been updated by the Federal board of Revenue (FBR) till June 30, 2019.
The withholding tax card also included the 100 percent higher tax rates for persons not on the Active Taxpayers List (ATL).
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has approved listing regulations for small companies to raise funds through capital markets.
A statement on Tuesday said that the SECP had approved the Growth Enterprise Market Listing Regulations to enable Small and Medium Enterprises (SMEs), Green field projects, Not for Profit and other companies to raise capital through capital markets conveniently.
SECP has advised Pakistan Stock Exchange (PSX) to arrange publication of new regulations in the official Gazette of Pakistan to replace PSX’s existing regulations governing listing and trading of equity securities of SMEs.
The Growth Enterprise Market regulations designed especially to facilitate small enterprises, startups and green field companies that are aspiring to raise funds through capital markets but cannot fulfill the cumbersome conditions for listing on the Main Board of PSX.
Hence, in addition to the main board of PSX, the Growth Enterprise Market (GEM) will be a second board at PSX for listing and trading of equity securities. However, the trading screen for both boards will be same.
The new board provides a more conducive regulatory environment as compared to the main board.
For listing on GEM board, any public limited company having audited accounts for the last two financial years and post issue paid up capital of at least Rs25 million is eligible.
The minimal fee for listing on GEM board is Rs50,000, that is significantly low as compare to listing on PSX main Board, where minimum listing fee is Rs200,000.
Moreover, to facilitate the issuers, any person licensed with the SECP as securities broker or consultant to the issue can act as Advisor.
The issuer may offer, by way of information memorandum, only 10 percent of the post issue paid up capital to the eligible investors. The said board also allows green field project and non-profitable companies to raise funds.
Moreover, the companies listed on GEM board may graduate to the main board subject to the fulfillment of prescribed criteria. However, reverse migration is not allowed.
In order to create liquidity on the GEM board, the concept of eligible investor has been introduced and minimum lot size has been linked with the main board of the PSX, which is currently 500 shares.
Eligible investor includes all institutional investors and eligible individual investors registered with NCCPL that have financial strength or expertise.
The post listing requirements of GEM board are also relaxed as compared to the main board such as non-applicability of code of corporate governance, submission of half yearly progress report as compared to quarterly progress report.
KARACHI: Overseas Pakistanis have remitted $7.48 billion during first four months of current fiscal year, which is 1.8 percent lower when compared with $7.62 billion in the corresponding period of the last fiscal year.
During October 2019, the inflow of workers remittances amounted to US$ 2,000.80 million, which is 14.46 percent higher than September 2019 and 2.88 percent lower than October 2018.
The country wise details for the month of October 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to US$ 468.18 million, US$ 398.96 million, US$ 322.38 million, US$ 328.69 million, US$ 191.77 million and US$ 60.94 million respectively compared with the inflow of US$ 494.53 million, US$ 419.41 million, US$ 325.19 million, US$ 322.29 million, US$ 200.87 million and US$ 57.42 million respectively in October 2018. Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during October 2019 amounted to US$ 229.88 million together as against US$ 240.57 million received in October 2018.
KARACHI: The stock market ended down by 38 points on Tuesday owing to bearing trend prevailed during the day.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,766 points as against 36,803 points showing a decline of 38 points.
Analysts at Arif Habib Limited said that after making another stride of 368 points the index fell into bearish spell and saw erosion of gains made during the day, ending the session at a loss of 38 points.
Cement sector that garnered the most trading volume on the bourse, traded green for most part of the session, but saw selling activity in LUCK. On the whole, Banking, Fertilizer and Chemical sector largely performed negative and was further contributed by E&P and OMCs, which saw selling pressure by the end of the session.
Cement sector led the volumes with 44.6 million shares, followed by Technology (33.4 million) and Chemical (28.1 million). Among scrips, UNITY saw trading volumes of 16.1 million shares, followed by PAEL (16.1 million) and TRG (14.6 million).
Sectors contributing to the performance include Power (+80 points), Autos (+17 points), Food (+16 points), Technology (+15 points), Fertilizer (-69 points), Banks (-49 points), E&P (-34 points) and INv Banks (-27 points).
Volumes increased from 282.9 million shares to 292.1 million shares (+3 percent DoD). Average traded value also increased by 10 percent to reach US$ 64.3 million as against US$ 58.5 million.
Stocks that contributed significantly to the volumes include UNITY, PAEL, TRG, ISL and FCCL, which formed 24 percent of total volumes.
Stocks that contributed positively include HUBC (+58 points), INDU (+16 points), KAPCO (+14 points), TRG (+12 points) and DGKC (+12 points). Stocks that contributed negatively include FFC (-35 points), DAWH (-25 points), EFERT (-25 points), POL (-20 points), and MCB (-19 points).
ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday warned of disciplinary action to its officers and officials for not observing office timing.
A circular issued by the FBR stated that the authority had notices with great concern that some officers/officials of FBR Headquarters and its field formations were not observing office timings.
“FBR HQ is consistently advising in the past to observe the office timings, however, complaints are being still received for non-observance of office timing.”
The FBR directed all the officers/officials of FBR HQ and its field formations to strictly observe the notified office timings and facilitate the public, otherwise, strict disciplinary action would be taken against delinquents under E&D Rules, 1973.
KARACHI: State Bank of Pakistan (SBP) on Tuesday issued amendment to instructions regarding acquisition of services from abroad by Pakistani firms.
Referring Para 11, Chapter 14 of the Foreign Exchange Manual, 2019, the central bank said that prior permission of is required by the persons or firms in Pakistan who wish to acquire the services of agents abroad, for any purpose, other than export of goods from Pakistan, whether on regular basis or otherwise.
In order to bring more clarity on the subject instructions and to facilitate the stakeholders, it has been decided to replace the aforesaid Para with following instructions:
“Para 11 – Acquisition of Services from Abroad:
Prior permission of Foreign Exchange Operations Department (FEOD), SBP-BSC, is required from foreign exchange perspective, by the firms or companies in Pakistan, intending to acquire any type of service in Pakistan from abroad for any purpose; excluding those services for which specific foreign exchange related instructions are issued by SBP.
However, as an exception to the above para i, such services can be acquired from abroad without prior permission of FEOD, if total value, of a specific service to be acquired from abroad, does not exceed USD 10,000/- (or equivalent in other currencies), OR in case of recurring payments, the underlying service agreement/ letter of engagement, etc. is not more than five consecutive years and remittance(s) does not exceed USD 10,000/- (or equivalent in other currencies) for each year.
The ADs are allowed to effect remittance in such cases, based on the documents mentioned at v below, after fulfilling their responsibilities mentioned at xiii below, and subject to meeting all other requirements.
Moreover, acquisition of services of agents abroad for export of goods from Pakistan will not require prior permission of FEOD.
All applications, seeking prior permission, acknowledgement of service agreement/ letter of engagement, etc. and designation of authorized dealer for effecting all related remittances in future, shall be submitted to the Director, FEOD, SBP-BSC, through an authorized dealer which the applicant wishes to be designated.
Following documents will be submitted by the applicant to AD along with the application:
Copy of draft service agreement/ letter of engagement, etc. covering all necessary clauses of names/ addresses of both parties, complete scope of services, duration, total contract price, terms of payment, schedule of remittances, milestones to achieve, arbitration, and likewise; provided that any late payment surcharge/ mark-up is not agreed therein,
Documentary proof from the applicant for being active tax filer,
Economic rationale justifying the acquisition of the required services from abroad, from applicant’s business perspective along with potential benefits for country,
NOC or certificate from related regulatory body (if exist) for acquiring the requisite specific services from abroad, e.g. Pakistan Telecommunication Authority (PTA), Pakistan Engineering Council (PEC), Pakistan Software Export Board (PSEB), Pakistan Council of Architects & Town Planners (PCATP), etc.
Justification i.e. valid and cogent arguments with related evidences, for acquiring the specific services from abroad, instead of acquiring from the local sources,
In case the applicant is a financial institution or a bank or an authorized dealer itself, then the required documentation will also include copy of internal approval from the appropriate approving authority for the underlying arrangement of services from abroad, duly supported by the relevant regulatory framework (if applicable).
AD will forward all the above mentioned documents to FEOD, along with its analysis, rationale/justification and specific recommendation supporting its customer’s (applicant’s) request, seeking prior permission for acquiring services from abroad and acknowledgement of the underlying agreement/ letter of engagement, etc.
In the case where underlying service agreement/ letter of engagement, etc. requires payment (fully or partly) in advance:
The amount of advance payment will be repatriated, if the provision of services is not initiated, within 120 days from the date of its remittance. An undertaking by the applicant shall also be submitted with the application, in this regard.
The designated AD will be responsible to obtain Confirmation from applicant in the form of ‘Certificate of Commencement of Services’ and subsequently the ‘Certificate of Completion of Services acquired from abroad’ duly notarized on Stamp Paper of appropriate value as per the legal requirement.
In case the provision of services is not initiated and the amount of advance payment is not repatriated, within 120 days (from the date of remittance of advance payment), OR the services are not completely rendered within the time period as stipulated in service agreement/ letter of engagement, etc.; the designated AD will report all such cases to FEOD, SBP-BSC on the 10th day of following month as per prescribed format (Appendix V-145). FEOD, SBP-BSC may initiate regulatory action against the remitter through Foreign Exchange Adjudication Department, SBP-BSC, under Foreign Exchange Regulations Act, 1947.
The designated AD will ensure that no further remittances under the acknowledged service agreement/ letter of engagement, etc. will be effected until the issue of advance payment is resolved.
In case prior permission is granted and the underlying service agreement/ letter of engagement, etc. is acknowledged, FEOD, SBP-BSC shall not be construed as a party thereto. Further, adherence to all laws, rules and regulations shall be responsibility of the parties to the service agreement/ letter of engagement, etc.
Once prior permission is granted, the concerned AD is designated and underlying service agreement/ letter of engagement, etc. is acknowledged by FEOD, the designated AD may allow remittances or establish letter of credit available for payments, on production of beneficiary’s service invoices/bills duly certified by the applicant in Pakistan, in accordance with underlying acknowledged service agreement/ letter of engagement, etc. All the matters related to such letters of credit (types, opening, extension, amendment, time frame, method of payments, etc.) shall be dealt as per the relevant provisions of Chapter 13 (Imports) of the Foreign Exchange Manual, 2019.
The designated AD will obtain copy of underlying acknowledged service agreement/ letter of engagement, etc. duly signed and stamped, before making any payment/ remittance in favor of the service provider.
In case the agreement is not executed within 60 days, from the date of its acknowledgement, the Authorized Dealer will report its status to FEOD.
Any subsequent amendment in the underlying acknowledged service agreement/ letter of engagement, etc. will require prior permission of FEOD.
While processing the transaction, Authorized Dealer shall be responsible to:
Take all possible measures to verify the bona fides of the applicant and genuineness of transaction and to exercise due diligence for all submissions of the applicant.
Ensure compliance with AML/CFT laws, regulations and guidelines while effecting outward remittances, as per the service agreement/ letter of engagement, etc.
Ensure that the payment, being made is in accordance with the underlying service agreement/ letter of engagement, etc.
Ensure to obtain ‘Certificate of Completion of Services acquired from abroad’ duly notarized on the Stamp Paper of appropriate value as per the legal requirement, before effecting remittance. However, in case of advance payment, ‘Certificate of Commencement of Services’ shall be obtained within 120 days of its remittance, and ‘‘Certificate of Completion of Services’ shall be obtained that the services have been completely acquired within the time period stipulated under the service agreement/ letter of engagement, etc.
Ensure repatriation of advance payment, in case the provision of services is not initiated within 120 days from the date of its remittance, or the services are not completely rendered within the time period as stipulated in the acknowledged service agreement/ letter of engagement, etc.
Deduct all applicable taxes (if any) while effecting each outward remittance as per the service agreement/ letter of engagement, etc.
Enforce each of the terms and conditions/ instructions of FEOD, SBP-BSC including follow-up, where applicable.
Maintain applicant wise documents, including record of remittance(s) effected by ADs.
Incomplete requests shall not be considered.”
Instructions of this Circular shall come into force with immediate effect. However, for the service agreements/ letter of engagement, etc., which have already been signed, the same will be required to be acknowledged at FEOD, SBP-BSC, within 6 months (from the date of this Circular) or before the remittance/ payment becomes due, thereunder; whichever is earlier.
The banks have been advised to bring the same to the notice of all their constituents, ensuring meticulous compliance of the above instructions.
KARACHI: The Pak Rupee ended flat against dollar on Tuesday in lackluster trading activities, dealers said.
The rupee ended Rs155.45 to the dollar from previous day’s closing of Rs155.44 in interbank foreign exchange market.
Dealers said that lower dollar demand for import and corporate payments kept the rupee stable in the foreign currency market.
The foreign currency market was initiated in the range of Rs155.45 and Rs155.55. The market recorded day high of Rs155.45 and low of Rs155.43 and closed at Rs155.45.
The exchange rate in open market also witnessed stable rupee value. The buying and selling of dollar was recorded at Rs155.20/Rs155.50, the same previous day’s level, in cash ready market.
KARACHI: State Bank of Pakistan (SBP) has facilitated manufacturing sector in advance import payment by making changes to regulatory regime.
The SBP on Tuesday invited attention of banks to instructions issued vide EPD Circular Letter No. 01 of 2019 dated January 01, 2019 whereby import advance payment up to USD 10,000 per invoice was allowed for importers cum exporters for import of raw materials and spare parts for their own use only.
In order to facilitate the manufacturing sector, the above instructions have been modified.
“Henceforth, Authorized Dealers are allowed to effect advance payment up to USD 10,000, or equivalent thereof, per invoice on behalf of manufacturing concerns for import of raw materials and spare parts for their own use only.”
Authorized Dealers are advised to ensure meticulous compliance of above and other applicable regulatory instructions including those of Para 6 Chapter 2 of FE Manual, which require Authorized Dealers, among others, to satisfy themselves that the transactions will not involve and is not designed for the purpose of contravention or evasion of any of the provisions of the Foreign Exchange Regulations Act, 1947 or of any rules, directions or orders made thereunder.
KARACHI: Federal Board of Revenue (FBR) has notified withholding sales tax rates to be deducted / collected on various supplies by withholding agents.
The FBR recently updated Sales Tax Act, 1990 and updated sales tax rates to be collected on various supplies under sub-section 7 of section 3 of the Act.
The tax shall be withheld by the buyer at the rate as specified in the Eleventh Schedule, by any person or class of persons as withholding agent for the purpose of depositing the same, in such manner and subject to such conditions or restrictions as the Board may prescribe in this behalf through a notification in the official Gazette.
Following rate of withholding sales tax shall be applicable:
01. 1/5th of Sales Tax as shown on invoice to be collected from registered persons by (a) Federal and provincial government departments; autonomous bodies; and public sector organizations; (b) Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)
02. 1/10th of Sales Tax as shown on invoice to be collected from person registered as a wholesaler, dealer or distributor by (a) Federal and provincial government departments; autonomous bodies; and public sector organizations; (b) Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)
03. Whole of the tax involved or as applicable to supplies on the basis of gross value of supplies from unregistered persons by Federal and provincial government departments; autonomous bodies; and public sector organizations
04. 5 percent of gross value of supplies from unregistered persons by companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)
05. Whole of sales tax applicable from person providing advertisement services by registered persons as recipient of advertisement services
06. Whole of sales tax applicable from unregistered persons by registered persons purchasing cane molasses.
The rates for withholding or deduction by the withholding agents not applicable to following goods and supplies:
(i) Electrical energy;
(ii) Natural Gas;
(iii) Petroleum Products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel;
(iv) Vegetable ghee and cooking oil;
(v) Telecommunication services;
(vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;
(vii) Supplies made by importers who paid value addition tax on such goods at the time of import; and
(viii) Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered persons with exception of advertisement services.
ISLAMABAD: Prime Minister Imran Khan on Monday constituted a committee for formulation of proposals to resolve challenges of federal and provincial taxes faced by construction industry.
The committee will be headed by Naya Pakistan Housing Authority Chairman Lt Gen (R) Anwar Ali Haider.
The prime minister was chairing a high level meeting regarding the revival and promotion of construction sector. The meeting was briefed in detail about the challenges faced by the sector.
According to state news media the prime minister highlighted the significance of construction sector in boosting economic activities and said the present government had given a lot of importance to the sector, which would help realize the project of five million housing units.
The meeting was attended by Punjab Chief Minister Usman Buzdar, Khyber Pakhtunkhwa Chief Minister Mehmood Khan, Punjab Finance Minister Makhdoom Hasham Jawan Bakht, Punjab Housing Minister Mian Mehmood-ur-Rasheed, Balochistan Finance Minister Zahoor Ahmad Bulaidi, FBR Chairman Syed Shabbar Zaidi, Board of Investment Chairman Syed Zubair Haider Gilani, Planning Commission Deputy Chairman Jahanzeb Khan, Naya Pakistan Housing Authority Chairman Lt Gen (R) Anwar Ali Haider and senior federal and provincial governments’ officers.
The prime minister said the promotion of construction sector was the government’s foremost priority, adding since around 40 industries were allied with it, the promotion of construction sector besides developing those industries would also create job opportunities for youth.
The meeting discussed in detail various proposals regarding the provision of bank loans, uniform implementation of taxes and promotion of public-private partnerships for the construction sector.
The prime minister was briefed about the problems faced by the builders, contractors, developers and real estate businesses, especially, the ratio of federal and provincial taxes, difficulties in the provision of capital from banks, problems regarding registration, other official procedures and corruption.
Other members of the committee included the Federal Board of Revenue (FBR) chairman, Governor State Bank, Punjab finance minister, provincial chief secretaries and other relevant officers.
The prime minister directed the committee to submit a strategy along with recommendations to address the problems about taxes, provision of loans from banks and other difficulties faced by the construction sector within the next 24 hours.