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June 26, 2022: The amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT-enabled Services (ITeS).
According to a statement issued by FBR, the sector has been provided a reduced tax rate of 0.25% on their export proceeds which is a quarter of the 1% export tax rate provided to all other exporters of goods.
Meanwhile, the sector has been removed from the tax credit regime to simplify the tax filing system and to remove hassles of compliance that were earlier required to make them eligible for 100% tax credit to claim tax exemption.
The requirements of filing Withholding Tax Statements and Sales Tax returns have been liberalized for the sector and only those who are required under the law will file WHT Statements or the Sales Tax Returns.
For individuals having turnover up to Rs 100 m per year, there is no requirement to file WHT A Statement or to deduct tax.
The definition of IT and IT-enabled services as provided under the Income Tax Ordinance, 2001 has been liberalized by expanding its scope by making suitable amendments and all-inclusive, and “not limited to” definition has been provided.
IT and IT-enabled services exporters have been provided the facility of obtaining a Sales Tax refund in respect of any Sales Tax that has been paid as their input on computers, laptops, stationary other items, etc.
This facility is not available under the Provincial Sales Tax Law.
The demand of the IT Sector for reviving tax exemption for the Venture Capital Fund has been accepted and a new provision has been created for providing Income Tax Exemption to the Venture Capital Fund for three years.
June 26, 2022: The Ministry of Planning Development & Special Initiatives is all set to host Turn Around Conference (TAC) with an objective of gathering the nation together to find solutions to the country’s current socio- economic issues. These solutions would be aimed at short term results; if substantial these due deliverance compact ideas can be extended on to mid and long term objectives.
The conference will be held on June 28 at Convention Center which will be graced by Prime Minister Shahbaz Sharif as chief Guest. The prime objective of the conference is to engage all the relevant stakeholders which hold the development sector together from across the nation.
"The aim is to take input, understand and resolve hurdles in Economic Growth in order to place country’s economy back on track" , said the Federal Minister for Planning Development & Special Initiatives, Professor Ahsan Iqbal.
Currently, Pakistan is facing many external and internal challenges which are further compounded by the existing commodity super- cycle and geo-political situation. As the economic growth does not offer enough opportunities for national progress, short-term measures can act as a catayst for speeding up the growth.
Current Socio-economic landscape of Pakistan calls for tactical solutions to address Economic problems. Hence, A quick round of wider and inclusive consultations of experts belong from diversified fields can be helpful in providing solutions to come out of this economic quagmire.
The government has already taken necessary short-term actions to stabilize the economy and deal with the looming balance of payments crisis. However, the government’s focus is to ferret out the medium to long-term solutions to optimise country's economy to tap its full potential in line with Vision 2025.
Moreover, participation of stakeholders from all walks of life is ensured including representatives of Political Parties, Federal Ministries, Provincial Governments, National and International Private Sector Entrepreneurs, International Development and Financial Institutions, Academia, Think Tanks, Independent Experts, NGOs and other parts of Civil society of the country to produce result oriented and focused solutions for bringing a turnaround in the economy of Pakistan.
June 26, 2022: Britain, the United States, Japan and Canada will ban new imports of Russian gold as part of efforts to tighten the sanctions squeeze on Moscow for its invasion of Ukraine, the British government said on Sunday.
The ban will come into force shortly and apply to newly mined or refined gold, the government statement said ahead of a meeting of Group of Seven leaders in Germany on Sunday.
The move will not affect previously exported Russian-origin gold, it added.
Russian gold exports were worth 12.6 billion pounds ($15.45 billion) last year and wealthy Russians have recently been buying bullion to reduce the financial impact of Western sanctions, the government said.
"The measures we have announced today will directly hit Russian oligarchs and strike at the heart of Putin's war machine," Prime Minister Boris Johnson said in the statement.
"We need to starve the Putin regime of its funding. The UK and our allies are doing just that."
The latest initiative follows the London Bullion Market Association's (LBMA) March suspension of accreditation for six Russian precious metals refiners.
June 26, 2022 (MLN): The latest weekly roundup covers the latest economic and financial data releases over the past week to keep an eye on next week's trends.
- The Weekly Sensitive Price Indicator (SPI) for the Combined Group increased by 1.01% during the week ended Jun 26, 2022 while the SPI increased by 28.05% compared to the corresponding period from last year.
- State Bank of Pakistan (SBP) has received a $2.3 billion loan from a Chinese consortium.
- The government has imposed a super-tax of 10% on large-scale industries in a bid to support poor people under its poverty alleviation plan.
- The total liquid foreign exchange reserves held by the country dropped by $733 million or 4.9% WoW to stand at the lowest level of $14.2 billion since Jan 18, 2019, during the week ended on June 17, 2022, compared to $14.94bn in the previous week.
- The country’s overall nutrients offtake dropped by 21.8% to 302,000 tonnes during May 2022 compared to the same month last year.
- The National Electric Power Regulatory Authority (NEPRA) on Friday approved an Rs5.27 per unit increase in tariff for April under monthly fuel cost adjustment (FCA) for consumers of K-Electric.
- The State Bank of Pakistan (SBP) raised Rs155 billion on Wednesday, against the target of Rs150bn by selling fixed-rate Pakistan Investment Bonds (PIBs).
- The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the Technical Supplementary Grant (TSG) of Rs96.13 billion to the Power Division for payment to the IPPs as a second installment (60% payment).
- Central Directorate of National Savings (CDNS) on Tuesday attained the target of issuing Rs1100 billion fresh bonds in the last 11 months of the current fiscal year 2021-22, from July 1st to June 15, 2022.
- With the highest ever daily inflow of $57 million on June 21, 2022, the total deposits in Roshan Digital Account (RDA) have crossed $4.5 billion.
- The total deposits held by scheduled banks have shown a growth of around 18% YoY to around Rs21.15 trillion in May 2022, against Rs17.95tr in the same month of last year on account of strong overseas inflows.
- The Banking sector spread for May 2022 narrowed down by 41 basis points (bps) over the month which brings its latest value to 4.61% as compared to the prior month's spread of 5.02%.
- Automobile financing in Pakistan was recorded at Rs367 billion in May 2022.
- Total Power generation in the country increased by 13% YoY to 14,657 GWh in May 2022 at a cost of Rs13.15 per unit, compared to 13,010 GWh in May 2021 at the cost of Rs5.7 per unit.
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June 26, 2022: SBP welcomes the Federal Shariat Court’s Judgement of April 28, 2022 on Riba case, as has already been done by the Honorable Finance Minister. In particular, we appreciate the substantive part of the decision.
As the prime custodian and regulator of the financial and monetary framework of the Islamic Republic of Pakistan, SBP is deeply committed to ensuring compliance with the injunctions of Islam, in particular those pertaining to riba, while protecting the stability and security of the financial sector of the country that functions as part of the global financial system.
In this context, SBP has always remained at the forefront in promoting Islamic banking in the country. SBP is among the few regulators across the globe where comprehensive legal, regulatory and Shariah Governance frameworks have been successfully developed and implemented.
Currently, 22 Islamic Banking Institutions (5 full- fledged Islamic banks and 17 conventional banks having standalone Islamic banking branches) with a branch network of 3,983 branches along with 1,418 Islamic banking windows (Islamic banking counters at conventional branches) are operational across the country. The industry now accounts for 19.4 percent of the country's overall banking system in terms of assets while in terms of deposits the share is 20 percent (as of March 31, 2022).
In addition, SBP has also been taking measures to bring the legal and regulatory infrastructure in compliance with Shariah principles.
After detailed review of the judgment and based upon the advice of our Chief Legal Adviser and external counsel, we have sought guidance from the honorable Shariat Appelate Bench of the Supreme Court in terms of its implementation and practicalities involved.