The Federal Board of Revenue (FBR) of Pakistan has experienced a significant decline in revenue collection, with a 16% drop recorded during the four-month period from March to June 2020, compared to the same months last year.
(more…)Tag: coronavirus
-
Banks approve financing of Rs126bn for employees’ wages of 2,068 businesses
KARACHI: Banks have approved around Rs126 billion under soft loan scheme to 2,068 businesses in meeting financing requirement for salaries and wages in the wake of difficulties faced due to coronavirus pandemic, State Bank of Pakistan (SBP) said on Monday.
The SBP said that Under the Scheme, on overall basis, up till July 1, 2020, financing of Rs125.9 billion has been approved by banks for 2068 businesses covering wages and salaries of over 1.2 million employees.
Soon after the introduction of the Scheme, a large number of applications to avail financing were received by banks but their approvals remained slow.
However, with the continuous efforts of SBP, banks streamlined their processes and pace of loan approvals increased.
At the end of April 2020, only 18 percent of loan applications were approved. This has increased to 76 percent by July 10, 2020.
Similarly, the amount of loans approved against the requested amount also improved. The acceptance ratio for amount of financing increased from 26 percent at the end of April 2020 to 82 percent on July 10, 2020.
Consequently, the number of employees benefitting from the scheme in terms of acceptance ratio has also increased from 26 percent to 85 percent during the same period.
To counter the negative impact of Covid-19 on the economy, the central bank introduced the refinance scheme to support employment and prevent layoff of workers, commonly known as SBP RozgarScheme, in April 2020.
The scheme provides concessional financing to businesses for wages and salary expenses, provided they commit to not lay off their employees for the period of the loan.
The Scheme was later complemented by a Risk Sharing Facility (RSF) of the Government of Pakistan (GoP) for SMEs and Small Corporates with turnover of up to Rs2 billion.
Under this facility, the federal government bears up to 60 percent first loss on the principal amount portion of disbursed portfolio for SME borrowers whereas 40 percent risk coverage is available for small corporates.
The objective of this facility is to incentivize banks to extend loans to SMEs and Small Corporates, to whom they may not cater to for risk considerations.
The scheme was available till end June 2020 earlier, however, SBP decided to extend the validity of this scheme by another three months to end September, 2020.
Out of the total approved amount, Rs31 billion were for 1449 SMEs and Small Corporates under the RSF as of July 10, 2020 providing benefit to 280,437 employees.
Relative to the initial situation related to Rozgar scheme, in terms of processing and approving the requests for financing, banks performed better in catering the requests under RSF and improved further over time.
The acceptance ratio, both in terms of number of applications and amount increased from 35 percent and 37 percent respectively on May 15, 2020 to 72 percent and 71 percent on July 10, 2020.
Following similar trends, the total number of employees benefitting from the acceptance of financing requests increased from 36 percent to 75 percent during the same period.
The performance of banks, however, in terms of processing the number of applications and financing approved is limited to few banks.
Among the Top Performing Five Banks, for both, JS Bank Limited, Habib Bank Limited (HBL), Bank Al-Habib Limited, Bank Alfalah Limited and Askari Bank Limited have contributed the highest in terms of both approving the number of applications and amount since the beginning of this scheme (RSF) till July 10, 2020.
These top performing five banks provided Rs18.1 billion or 58 percent of the overall approved financing amount eligible for RSF under SBP Rozgar Scheme up till July 10, 2020.
Their share declined from 61 percent earlier on June 12, 2020 showing that other banks have improved their performance. Their individual performance is also reflected from the fact that the cumulative approved financing by these banks ranged from Rs2.2 to Rs4.6 billion.
-
World Bank approves $500 million to help Pakistan strengthening fiscal management
KARACHI: The World Bank on Tuesday approved $500 million in financing for the Resilient Institutions for Sustainable Economy program (RISE) to help Pakistan strengthen fiscal management.
A statement issued by The World Bank’s Board of Executive Directors approved today $500 million in financing for the Resilient Institutions for Sustainable Economy program (RISE) to help Pakistan strengthen fiscal management, promote transparency and private sector growth, and undertake foundational reforms in the energy sector to transition to low-carbon energy. These reforms are critical to build fiscal resilience and stimulate recovery from impacts of the COVID-19 pandemic.
“Pakistan is suffering a significant fiscal shock from the economic fallout from the pandemic and the increased spending on crisis response, including emergency healthcare, social protection, and business support,” said Illango Patchamuthu, World Bank Country Director for Pakistan.
“The RISE program supports the government efforts to achieve macroeconomic stability, accelerates long-delayed policy reforms, and sets the course for a strong and competitive economy.”
The program supports reforms to broaden the tax base and reduce distortions in tax policy, strengthen debt management and transparency, and implement urgently needed reforms to achieve financial viability of the power sector.
In tandem, reforms to lower barriers to the formalization of firms, increase the use of digital payments, and better regulate real estate developments will help create an enabling environment to attract private investment.
“RISE supports reforms such as harmonizing sales tax and making the trade tariff structure more competitive. This could help the country attract new investments and spur economic recovery,” said Shabih Mohib, Lead Country Economist for the World Bank.
“Taken as a whole, we hope that RISE can build a foundation for sustainable growth driven by the private sector.”
The program supports the foundations for a move toward a low-carbon and more financially viable power sector. The program includes reforms to improve the integrity of the banking sector, promote digital finance, and create a more competitive national tariff policy to promote trade and reduce costs to consumers.
The digital finance component of the program will help deepen electronic money transactions and digital payments will benefit populations with limited mobility, such as women and low-income populations.
RISE is aligned with the government’s COVID-19 crisis response, which aims to scale up spending on health and social protection while pursuing macro-fiscal reforms in the face of economic contraction.
RISE complements the Securing Human Investments to Foster Transformation (SHIFT) which focuses on human capital and an upcoming Program for Affordable and Clean Energy (PACE) which will tackle power sector reforms.
PACE, which will include critical power sector reforms needed to put the country on sustainable fiscal path, will precede the second programs of RISE and SHIFT.
-
FBR exempts duty, taxes on import of Remdesivir
ISLAMABAD: Federal Board of Revenue (FBR) on Monday exempt duty and taxes on import of antiviral drugs for prevention of coronavirus.
The FBR issued SRO 557(I)/2020 to exempt income tax on import of finished drug Remdesivir 100mg injection and injectable solution 100 mg vital.
A new section 12D has been inserted to Section 148 of Income Tax Ordinance, 2001 to provide relief on import of the drug.
Similarly, another SRO 558(I)/2020 has been issued by the FBR to exempt the import of finished drug Remdesivir 100 mg injection and injectable solution 100mg vial (PCT3004.9099) from whole of the customs duty and additional customs duty.
-
So far 30 FBR officials die of coronavirus
ISLAMABAD: So far 30 officials of Federal Board of Revenue (FBR) have died of coronavirus, including a BS-22 officer of customs service.
This was disclosed by FBR in a statement issued on Friday.
It said that the FBR arranged a eulogy in remembrance of martyred officers and staff due to coronavirus / Covid-19.
On this occasion, Secretary Finance Naveed Kamran Baloch, Chairperson FBR Nausheen Javaid Amjad and other senior officers and officials of FBR participated in the eulogy.
Prayers were offered for the departed Muhammad Zahid Khokhar, a Pakistan Customs grade-22 officer and other officers and officials of FBR.
A special tribute was also paid by the participants on the services of the martyred officers and staff for the organization and country, who continued to work for the collection of revenue despite outbreak of corona virus throughout the country.
“So far, 30 employees of FBR have embraced martyrdom due to Covid-19. These officers and officials worked at FBR HQ and its Field Offices,” it said.
-
FBR exempts sales tax on import of 61 medical equipments
ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced sales tax exemption on import of 61 medical equipments, which are important to fight against COVID-19.
The FBR issued SRO 555(I)/2020 to grant exemption on the medical equipments for a period of three months. Previously, the FBR granted exemption on various medical equipments through SRO 237(I)/2020 dated March 20, 2020.
Following goods are exempted from whole of sales tax at import stage:
01. Real-time PCR system (standard 96-well plate and
0.2ml tubes format, 5 channel)
02. Biosafety Cabinet
03. Auto Clave 50 Liter Capacity
04. Multi channel pipette (0.5-10 pi)
05. Single channel pipette a) 2 pi b) 10 pi c) 200 pi d) 1000 pi
06. Muti channel pipette 20-200 ml
07. Vacuum fold
08. Micro Centrifuge (Non-refrigerated, Rotor capacity: 12 x 1.5 / 2.0 ml vessels, 2 x PCR strip, Max. speed: 12,100 x g (13,400 rpm))
09. PCR Cabinet (FIEPA filter system, UV and white light)
10. Real-time PCR kit for the detection of Coronavifus (SARS-CoV2)
11. Viral RNA Extraction Kit and machine (Automatic Extractors)
12. VTM (Viral Transport Medium)
13. Dr Oligo Synthesizer
14. Refrigerator/freezer (-20 °C)
15. Vortex Machine
16. Refrigerated Centrifuge Machine (Rotor capacity 1.5ml x 24 max. speed 14000 rpm)
17. UPS (6 KVA)
18. Tyvek Suits
19. N-95
20. Biohazard Bags (18 Liters)
21. PARR (Powdered Air Purifying respirators)
22. Multimode ventilator with air compressor
23. Vital sign monitor with 2IBPand ETco2 two Temp.
24. ICU motorized patient bed with side cabinet and over bed table
25. Syringe infusion pump
26. Infusion pump
27. Electric suction machine
28. Defibrillator
29. X-Ray Mobile Machine
30. Simple Nebulizer
31. Ultrasound machine
32. Noninvasive BIPAP
33. ECG Machine
34. Pulse Oximeters
35. Ripple mattress
36. Blood gas analyzer
37. AMBU Bag
38. Nitrile Gloves
39. Latex Gloves
40. Goggles
41. Face Shields
42. Gum Boots
43. Mackintosh bed sheets
44. Surgical Masks
45. Air Ways
46. Diaflow
47. Disposible Nebulizer Mask Kit
48. EGG Electrodes
49. ETT Tube (Endotracheal Tubes) All sizes
50. Humidifier Disposable Flexible
51. IV Cannula all sizes
52. IV Chambers
53. Oxygen Recovery Kit
54. Padded Sheets
55. Stomach Tube
56. Stylet for Endotracheal Tube
57. Suction Tube control valve
58. Tracheostomy Tube 7, 7.5, 8
59. Ventilator Circuit
60. Ventury Masks
61. Disposable shoes cover (water proof)
This notification shall take effect from the June 20, 2020 and shall remain effective for a period of three months.
-
Ban lifted on export of various personal protective equipment
ISLAMABAD: The government on Tuesday lifted ban on export of various personal protective equipment (PPE) with immediate effect.
The ministry of commerce issued SRO 526(I)/2020 to amend the Export Policy Order, 2016.
The ministry allowed the export of PPE including disposable gowns, disposable gloves, face shields, biohazard bags, goggles, shoe cover and hand sanitizers.
The ministry put the ban on exports of such PPE through SRO 239(I)/2020 dated March 24, 2020.
The ban was imposed considering widespread of coronavirus in the country and to ensure availability of such PPEs in the country.
The SRO 239(I)/2020 had condition that the ban would lapse on the completion of the process of assessment of the baseline requirements of the country and stockpiling to be notified by the government.
The ministry however maintained restriction on export of tyvek suits, surgical masks and N-95 masks.
-
Budget 2020/2021 to focus on mitigating COVID-19 impact
KARACHI: The government may focus supportive measures in the upcoming budget 2020/2021 in order to reduce the impact COVID-19, analysts said on Tuesday.
Analysts at Arif Habib Limited highlighted the blueprint of the FY21 Budget whereby the key objective of the government is the revival and stabilization of the economy after being pinned down from the ongoing COVID-19 pandemic, via relief and supportive measures for the masses as well as the business community whilst constraining fiscal imbalances and meeting IMF’s revenue collection target.
The government is scheduled to present budget 2020/2021 on June 12, 2020.
They summarized some key expected measures below.
- Counter Coronavirus and ensure social security
a. Allocation of PKR 1.0trn to fight the ongoing COVID-19 contagion with likely allocation to the following:
I. Daily wagers cash allocation,
II. Higher allocation to the Ehsaas program (for vulnerable families),
III. Subsidized electricity for lifeline consumers,
IV. Enhanced allocation to Utility Stores Corporation (USC),
V. Higher allocation for health and food supplies,
VI. Allocation to the National Disaster Management Authority (NDMA), and
VII. Lowering down taxes on basic essential goods.
b. SBP has already introduced several measures to contain the economic fallout post Corona pandemic such as:
1) 525bps cut in interest rate,
2) announcement of a relief package for households, industries and SMEs,
3) Refinancing scheme to support employment and avert layoffs,
4) Relaxation in credit requirement for exports and imports, and
5) Facilitation of new investments via subsidized interest rates for BMR activities.
c. Higher allocation of social expenditure under the federal PSDP.
- Revive economic growth, increase PSDP allocation along with incentives for industries
The government has set GDP target for FY21 at 2.3 percent (FY20 estimated at -0.38 percent primarily due to the coronavirus pandemic)
a. Allocation of PKR 630 billion under the Federal PSDP along with an additional PKR 200 billion under Public Private Partnership Authority (PPPA),
b. Reduction of custom and excise duty by 3 percent on imports of machinery for agriculture and power sector,
c. Removal of additional custom duty on different products to support local production and revive demand, and
d. Removal of import duty on plant and machinery. Cascading duty structure on import of raw materials, intermediate goods and finished goods.
Mobilize revenue measures to achieve the additional collection target for next year
Tall revenue target of the FBR at PKR 5.1 trillion with additional requirement amounting to Rs 575 billion (discussed ahead) could be generated by means of:
a. Amendment in income tax treatment of bad debts, which could generate Rs 100 billion in revenue from the banking sector,
b. Imposition of luxury tax on luxury houses, farmhouses, mansions and bungalows,
c. Imposition of import duty on 60 luxury imported items including cars, ceramics and others,
d. Higher petroleum development levy during FY21, and
e. Administrative and enforcement actions undertaken by FBR.
- Certain expenditures (ex-social spending) to remain uncompromised
The government has set expenditure target for FY21 at Rs 10.4trn
a. Defence expenditure likely to go up to Rs 1.4 trillion,
b. Government is expected to allocate Rs 2.7 trillion for debt servicing in FY21,
c. Federal PSDP allocation will be targeted at Rs 630 billion.
- Scope of documentation drive to be eased and relaxation expected to revive consumer spending
a. Increase limit of providing CNIC conditions from Rs 50,000 to Rs 100,000,
b. Withholding tax on remittances to be abolished,
c. Reduction of 3 percent in further sales tax on supplies to undocumented individuals, and
d. New sectors to be added to the tax net.
-
FBR pays homage to officials die of COVID-19
ISLAMABAD: Federal Board of Revenue (FBR) has paid homage to officials who died of coronavirus in the line of duty.
The FBR in a statement on Monday paid homage to all its employees who died in the line of duty due to outbreak of Covid-19 and heartily condoled with their bereaved families.
FBR appreciates the services of these martyrs and call them real heroes who preferred to sacrifice their lives while performing their national duties even on national holidays and weekends.
The martyred employees include Islah-ud-Din of Regional Tax Office, Quetta, Naeem Iqbal of Directorate of Internal Audit Faisalabad, Khawar Mansoor of Regional Tax Office Faisalabad, Mirza Shahab Baig of Large Taxpayers Unit-II Karachi and Muhammad Arif of FBR (HQ), Islamabad.
FBR resolves not only to stay with the families of these heroes in these saddest moments and beyond but also to continue its all possible efforts in generating much needed revenue.
-
COVID-19 claims four more taxmen as IR offices open on Saturdays
KARACHI: Four more officials of Inland Revenue have died of COVID-19 as field offices of Federal Board of Revenue (FBR) were remained opened on Saturday.
The offices of Federal Board of Revenue (FBR) were remained opened on Saturday as four more officials of Inland Revenue died of coronavirus, sources said.
The officers were posted at Large Taxpayers Unit (LTU) – II Karachi and Corporate Regional Tax Office (CRTO). These officers were included Masood Anwar, Riffat Kamal, Mirza Shahab Baig and Khawaja Muhammad.
Earlier, three officials of RTO Quetta and RTO Faisalabad reportedly had also died of the infection.
The sources said that score of cases had been tested positive in various RTOs and LTUs across the country in recent days.
Latest statistics updated on Saturday reported that the cases of COVID-19 increased to 93,983 out of which 1,935 deaths were reported.
The sources said that during 10 -15 days the cases had been reported at more faster pace in the FBR.
However, despite the fact the FBR had decided to open the IR offices on Saturdays.
A notification issued by the FBR a day earlier stated that the IR offices would observe normal working day on Saturdays from June 06 to June 30, 2020.
The decision to open the offices was taken to achieve Rs415.5 billion during June 2020 in order the meet the revenue collection target of around Rs3,933 billion for the current fiscal year.