Category: Industry

The Federal Board of Revenue (FBR) has extended the deadline for digital payments by the corporate sector stipulated in Section 21 (1a) of Income Tax Ordinance-2001 up to 30th November 2021.

FBR has exercised this power conferred upon it under Section 214A of the Income Tax Ordinance, 2001 after receipt of various representations filed by the taxpayers.

The date extension has been announced in view of demand made by the corporate sector to explain or define “digital mode”, so as to make clear what kind of banking transactions are covered under it. It is to note that the Income Tax Ordinance, 2001 does not contain any definition of the digital mode.

In principle, FBR notified a few weeks ago that under the Tax Laws (Third Amendment) Ordinance, 2021 that any expenditure in excess of Rs. 0.25 million by the corporate sector will be inadmissible for tax deduction purposes if not paid through digital mode.

The FBR outlined that through this amendment, payments made by a company under a single head of account exceeding Rs. 250,000 other than by digital means from a business bank account of a taxpayer notified to the Commissioner under Section 114A of the Ordinance shall not be admissible for deductions, with a few exceptions.

Source: Pro Pakistani

State Bank of Pakistan earned a profit of Rs. 760.859 billion in FY21 as compared to a profit of Rs. 1.1634 trillion in FY20, registering a decline of 34 percent year-on-year, according to the annual performance report.

The decline in profit is primarily attributed to lower income from lending to the government. Pakistan Investment Bonds (PIBs) worth Rs. 569 billion matured during the year, and no fresh lending was made by the bank to the federal government, resulting in lower income under this head. Moreover, a decrease in the average interest rate during FY21 also impacted adversely on income from lending to government.

Income from reverse repo transactions and foreign currency deposits also witnessed a decline while charges on account of fair value adjustment on COVID-19 loans significantly increased during the year. The decline in income from these major income/expense streams is partly offset by a decrease in interest/mark-up expense and operating expenses.

SBP group also earned a higher net exchange gain during FY21 compared to the previous year due to appreciation of PKR against other currencies, especially USD, during the year.

Interest Income

The interest/markup income decreased by Rs. 453.033 billion to Rs. 755.588 billion, registering a decrease of 37 percent. For SBP, lending to the government of Pakistan (GoP) remained the major source of income during the year, which dropped by 39 percent due to the maturity of PIBs worth Rs. 569 billion and no further lending to the GoP during the year.

Income under this head also declined due to a decrease in the average interest rate on PIBs during the year. The income earned on lending to commercial banks through OMO injections decreased by 30 percent due to a decline in average interest rate despite larger volumes of monetary injections during the year.

Exchange Gains

The bank earned a net exchange gain of Rs. 135.328 billion during FY21 compared to an exchange gain of Rs. 66.402 billion during FY20. There is a net FCY liability position (including off-balance sheet commitments) that resulted in net exchange gain as PKR appreciated against USD, SDR, and other currencies during the period.

Exchange Gain

The exchange gains/ (losses) arise on FCY assets and liabilities of the bank. A major part of the foreign currency assets of the bank is USD denominated whereas the foreign currency liability exposure is mainly SDR and USD denominated. Accordingly, the movement in the PKR/SDR and PKR/USD exchange rates directly affects the exchange rate account. The bank earned a net exchange gain of Rs. 135.328 billion during FY21 compared to an exchange gain of Rs. 66.402 billion during FY20.

There is a net FCY liability position (including off-balance sheet commitments) that resulted in net exchange gain as PKR appreciated against USD, SDR, and other currencies during the period.

Other Operating Income

Other operating income includes penalties levied on banks/financial institutions, licenses and e-CIB fees, gains/ (losses) on sale, and re-measurement of investments, and other income. Income under this head decreased to Rs. 3.672 billion in FY21 from Rs. 8.604 billion in last year.

The decrease is primarily due to a decline in income on penalties levied on banks and financial institutions, licenses fee, e-CIB fees, which is partly offset by an increase in gain on disposal of foreign investments classified as “fair value through profit or loss.”

Operating Expenditure

The total expenditure during the year was Rs. 54.276 billion as against Rs. 59.089 billion in FY20. The decrease is due to a 17 percent decline in general administrative and other expenses and a 13 percent decrease in agency commission.

General Administrative and Other Expenses

The general administrative expenses include employees’ salaries and other benefits, retirement benefits, fund managers and custodians’ expenses, training expenses, legal and professional expenses, depreciation, repair, and maintenance, etc.

The overall general and administrative expenses decreased to Rs. 29.320 billion in FY21 from Rs. 35.168 billion in FY20, thus registering a decrease of Rs. 5.848 billion. A major decrease was witnessed in retirement benefits, salaries and other benefits, and legal and professional expenses during the period. A summary of the general, administrative, and other expenses.

Balance Sheet Summary

The total assets stood at Rs. 13.603 trillion as of June 30, 2021, as compared to Rs. 12.273 trillion on June 30, 2020, registering an increase of Rs. 1.330 trillion primarily due to an increase in securities purchased under agreement to resell.

The increase in total assets can also be attributed to the increase in foreign currency accounts and investments, loans, and advances to banks and financial institutions in order to promote the economic activities in the priority sectors and increase in SDRs of IMF. The total liabilities of the bank stood at Rs. 12.446 trillion as of June 30, 2021, as compared to Rs. 11.219 trillion as of June 30, 2020, registering an increase of Rs. 1.227 trillion. This rise was primarily led by an increase in currency in circulation.

Source: Pro Pakistani

Punjab Chief Minister Sardar Usman Buzdar says the PTI government has allocated billions of rupees for development projects of Lahore.

In a statement on Tuesday, he said mega infrastructure projects have been started in the city.

Usman Buzdar said completion of Shahkaam Chowk, Gulab Devi Hospital Underpass and Sheeran Wala Gate Overhead projects will provide ample transportation facilities to citizens of Lahore.

Source: Radio Pakistan

The Pakistan Rupee appreciated against the US Dollar (USD) on Tuesday and continued its run against the dollar. It gained 75 paisas against the dollar and closed at 170.54, posting a growth of 2.77 percent since crashing to an all-time low in October.

On Monday, the local currency continued to register its largest increase in value since April 2020. It added 36 paisas against the dollar and closed at 171.29 in the interbank market yesterday.

The rupee has appreciated Rs. 4.73 in the past four market closings. The local unit has continued its growth against the US dollar as Pakistan received funds from Saudi Arabia through the supplementary foreign exchange reserve assets (SDRs), which are units of account for the International Monetary Fund (IMF). They represent a claim to currency held by IMF member countries for which they may be exchanged.

It should be noted that Saudi Arabia is the largest Arab country to obtain 9577.5 million SDRs, with a 2.1 percent voting stake.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, discussed the news on Twitter and expressed confidence that the rupee would stabilize.

The PKR appreciated against other major currencies too. It gained 38 paisas against the Euro, 121 paisas against Pound Sterling (GBP), 117 paisas against the Australian Dollar (AUD), and 70 paisas against the Canadian Dollar (CAD).

It also added 20 paisas against both Saudi Riyal (SAR) and the United Arab Emirates Dirham (AED) today.

Source: Pro Pakistani

The Federal Board of Revenue (FBR) will launch a Single Sales Tax Portal in the ongoing month, November 2021, to facilitate taxpayers and ensure ease of doing business through automation, digitization, and minimization of human interaction with taxpayers. Prime Minister Imran Khan is likely to launch the initiative.

According to a handout issued by FBR, the decision has been made after thorough discussions with the provincial revenue authorities of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan, as well as Azad Jammu & Kashmir.

This facility will enable taxpayers to file single monthly Sales Tax returns instead of multiple returns (six in the past) on different portals. It will significantly reduce the time and cost of compliance, and thus help achieve maximum efficiency.

The handout reveals that the system will be intelligent enough to sift and collect revenues from a single taxpayer and distribute the same among multiple revenue agencies.

This unique project will also help resolve the long outstanding issues of input tax adjustment among relevant stakeholders. With the proposed launch of the Single Sales Tax Portal, the existing cumbersome and tedious processes will be replaced with an efficient & automated system of tax adjustments, with minimum human involvement.

As per the handout, the portal will also be beneficial for tax collectors in having a ‘360-degree view’ of taxpayers’ business activities across the country in order to maximize revenue potential and tax compliance. By all standards, this is a giant leap forward in taxpayers’ facilitation and at the same time, a significant step in the harmonization of taxes between federal and provincial governments.

Source: Pro Pakistani

Muhammad Azfar Ahsan, a seasoned strategic engagements and communications specialist in the corporate sector, has been appointed as the Chairman Board of Investment (BoI) and State Minister, ProPakistani has confirmed with its sources.

He will be replacing Atif A. Bokhari, who quit the board to join Askari Bank Limited as Chairman and President. Azfar has not been notified yet, and if sources are to be believed, then his notifications would surface later this week.

Azfar Ahsan is the founder of Nutshell Conferences, Nutshell Communications, and Pakistan Corporate Group. Over the last few years, he expanded his business and strengthened its relationship with multinational and local companies in the public and private sectors.

He helped introduce various influencers and investors in Pakistan through his conferences, which eventually built a positive image among the foreigners and investors fraternity.

Recently, he set up Nutshell Communications and hired renowned specialists in the Public Relations industry. Within a short span of time, the agency has signed big companies as clients, including K-Electric, TCS Group, Jaffer Brothers, FrieslandCampina Engro Pakistan, Martin Dow, and Hive.

Azfar is a member of the Board of Directors of the Institute of Financial Markets of Pakistan, a subsidiary of Securities and Exchange Commission of Pakistan (SECP), RYTS Global (Rytsglobal.com), and Make-A-Wish Foundation Pakistan. He is also a member of the Advisory Board of the Shaukat Khanum Cancer Hospital project in Karachi and Vice-President of the Marketing Association Pakistan, an apex body of marketing in Pakistan. He also served as the Chairman of MARCON, Pakistan’s flagship marketing event, in 2009.

Over the last twenty years, Azfar has managed dozens of community projects all over Pakistan in the fields of health and education. In 2019, the Canada Pakistan Business Council, in recognition of Azfar’s services, conferred him with the ‘Global Outreach Award,’ which was presented to him at their Annual Gala and Awards Night in Toronto, Canada, in the presence of 500 Canadian nationals and Pakistani diaspora.

In December 2020, the US State Department selected and featured Azfar in the list of eighty selected alumni of the International Visitors Leadership Program (IVLP) out of 225,000 participants from around the globe.

Source: Pro Pakistani