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August 18, 2019: Securities and Exchange Commission of Pakistan (SECP) has approved the Regulations for Murabaha Share Financing (MSF) in persistence with its vision to develop and strengthen capital market, promote Shariah complaint financing and to stimulate liquidity in the securities market.
SECP has directed NCCPL to provide platform in relation to extending credit for share financing in compliance with Shariah principles and make necessary arrangements for system development and integration with CDC and PSX by September 2, 2019 to launch the MSF product at full scale for the investors.
MSF is primarily a sale transaction which is used to finance the purchase requirements of the investors in Shariah compliant manner. MSF product has been prepared after extensive consultations and under the guidance of Shariah Advisory Board of SECP and renowned Shariah scholars representing reputed Islamic banks. The product will allow financing only in Shariah compliant securities which fall under the PSX-KMI All Share Islamic Index. Under the MSF, financial institutions and securities brokers would be able to extend financing in Shariah compliant manner.
The introduction of MFS product would cater the needs of investors willing to avail Shariah compliant modes to finance their transactions. It will also pave the way towards realizing the untapped potential of Shariah complaint segment in the capital market. MSF product can be an attractive financing avenue for the Islamic banks operating in Pakistan due to limited availability of Shariah compliant investment options in capital market and excess liquidity available with such banks.
Aug 18, 2019: The Federal Board of Revenue (FBR) in one year of the Pakistan Tehreek-e-Insaf (PTI) has increased 60 percent collection of (Inland Revenue) IR Domestic Taxes.
The FBR while broadening the Tax Base (Inland Revenue Policy) had achieved 99.2 percent target of taxes collection during the month of July 2019 by the IR-Operations Wing, which was Rs 234 billion against the target of Rs 236 billion of the assigned target, according to the one year performance report of the PTI government shared by Special Assistant to Prime Minister on Information and Broadcasting Firdous Ashiq Awan here on Sunday.
The filing of returns of income for tax year 2018 had reached to the total number of 2,404,371 as compared to 1,486,756 returns filed for the tax year 2017 indicating a growth of 62 percent over the last year.
During Fiscal year 2018-19 the number of new tax payers who filed returns of income was 348,140 as compared to 146,096 filed during 2017-18 registering an increase of 137 percent.
“In July 2019 the collection of sales tax is Rs. 123.4 billion which is 26.4 percent higher than the collection of sales tax in July 2018 which was Rs 97.6 billion. Similarly, Federal Excise Duty (FED) collection in July 2019 is 20 percent higher than the collection in July 2018,” it added.
However, the tax collected under the Income Tax (other than Amnesty) in July 2019 was Rs 85.2 billion which is 42 percent higher than the collection of Income Tax in July 2018.
During last one year 6,451 high net worth cases were identified on the basis of economic transactions. Specialized units had been created within Regional Tax Offices (RTOs) for fast track processing of these cases. As a result of which 2,989 returns had been enforced. Moreover, the demand created was Rs 4,915 million and the tax recovered was Rs 1,648 million.
“Rs 189 million have been paid by the taxpayers who availed the amnesty on the basis of the action taken by the specialized units,” the report revealed.
Benami Transactions (Prohibition) Rule, 2019 were also issued by the IR-Operations Wing which created authorities to function under the Benami Act.
The report while narrating the Customs Operations Performance mentioned that the initiatives made included introduction of Devices Identification, Registration and Blocking System (DIRBS) was made, establishment of National Targeting Centre (NTC), Border Management Initiatives for Effective anti-smuggling and Appraisement, creation of Directorate of Cross Border Currency Movement (CBCM), launch of Authorized Economic Operator Programme. The Customs Operations Performance also noted exemption of Custom Duty on import of Plant and machinery by Greenfield projects and industry through supplementary budget, exemption or Reduction of Custom Duty (CD) on industrial inputs, Export Facilitation through Reduction in retention period, Extension of exemption for erstwhile federally administered tribal areas (FATA region), automation and simplification, Increasing coverage of regulatory duty (RD) regime, increase in pitch of Additional Customs Duty, installation of scanners at various customs stations in Pakistan to facilitate and secure imports and exports.
However, the further core initiatives taken were optimum compliance to the provisions of Trade Facilitation Agreement (TFA) to attract Foreign Direct Investment (FDI); generate economic activity; create employment opportunities and promote exports.
It also included successful deployment of the National Customs Enforcement Network (nCEN) [a system developed by the World Customs Organization (WCO)] in Data Center of FBR in collaboration with the Department for International Development (DFID) and WCO free of cost.
The FBR had also made strategic planning reforms (Recent Initiatives) were establishment of Tax Intelligence Unit (TIU) and Market Monitoring & Intervention (MMI) under the Trust Fund for Accelerated Growth and Reforms (TAGR) Project. It also had launch of Domestic Resource Mobilization (DRM) Project, creation of Tax Policy Unit within the Ministry of Finance, Plaza Mapping at Lahore, Karachi and Islamabad.
The FBR had also introduced a Currency Declaration System and Advanced Passenger Information System at major airports of the country.
Moreover, forensic audit in Sugar, Tobacco and Steel Industries to address leakages and tax evasion was also being carried out along with the implementation of Tobacco Track and Trace System
Realizing the significance of Information Technology in the field of revenue, Virtual One Stop Shop (VOSS) auto Issuance of NTN, introduction of Alternate Delivery Channel (ADC) for payment of tax through internet banking and automated teller machine (ATM).
It had also introduced FBR Maloomat which provides the asset information available with FBR to potential taxpayers and also a mobile application (Tax Asaan) was also launched.
The new website of FBR has been launched in the month of April, 2019 where the work on Urdu version of the official website is in progress.
“Success of the new website can be gauged from the fact that, in a short period of time FBR’s website is now ranked in top 25 websites in Pakistan according to Alexa & SimilarWeb ranking system,” it added.
Performance Management Delivery Unit (PMDU) of FBR progress mentioned that out of total 12,322 complaints received by FBR, 8,435 had been resolved and 3,494 complaints were new complaints and 425 complaints were in-process. The citizen satisfaction percentage was 53 percent, the report noted.
August 18, 2019: China Power Hub Generation Company (CPHGC) – a joint venture between The Hub Power Company Ltd. (HUBCO) and China Power International Holding – has successfully declared the Commercial Operations Date (COD) of its 1320MW imported coal power plant and integrated jetty with coal transhipment capacity of 4.2 MTPA.
The CPHGC project is a part of the early harvest energy projects under China Pakistan Economic Corridor (CPEC) framework and has been developed as per schedule and within projected costs.
The Plant will add 9 billion kWh of electricity to the national grid every year, meeting electricity needs of 4 million households in the country. The Project’s two units achieved synchronization with the National Grid on December 28, 2018 and May 28, 2019, respectively, while the Integrated Coal Jetty became operational in December 2018 with arrival of the first shipment of coal.
“The successful completion of CPHGC project has fortified the dream of energy independence of Pakistan. Since the synchronization earlier in May, we conducted extensive testing of the systems to make sure we deliver quality while keeping HSE as our top-priority. I am glad that this Pak-China synergy has resulted in engineering excellence and has fulfilled our promise of providing Pakistan with affordable and ample energy” said Mr. Khalid Mansoor, CEO HUBCO.
The Pakistani principal of the project, The Hub Power Company Limited currently produces over 2920 MW through its four plants spread over Baluchistan, Punjab and Azad Jammu & Kashmir. HUBCO has four projects listed in the CPEC out of which three are under-construction namely Thar Energy Limited (TEL) and Thalnova Power Thar (Pvt.) Ltd. and Sindh Engro Coal Mining Company (SECMC) at Thar Block II. The power generation capacity of the Company will enhance to over 3580MW after completion of the aforementioned power projects.
Aug 18: The ambitious plan of connecting Pakistan's railway network from China and Afghanistan to Gwadar deep sea port under China Pakistan Economic Corridor (CPEC) has been declared strategically important by both the countries.
The plan will help commercially viable transportation of goods from China and Central Asian States to the port city besides boosting trade and tourism activities in the country.
The already agreed CPEC project for up-gradation of existing Main Line 1 (ML-1) railway track from Peshawar to Karachi will be materialized in the first phase, while the then new railways lines would be laid across the country to boost trade activities under CPEC.
According to the plan, a new 1,059 kilometer railway line from Havelian in Pakistan's province of Khyber Pakhtunkhwa to Kashghar in Chinese province of Xinjiang would be laid to connect both the countries through railways.
Another 1328 kilometer long new railway line from Jacobabad and Quetta via Basima to Gwadar is also planned to be established at a cost of $4.5 billion to connect the port city with rest of the country and China.
Similarly Pakistan Railways has also plan to lay a new 560 km railway track from Quetta to Kotla Jam on ML-2 via Zhob and D.I. Khan.
New railway line from Peshawar to Torkham in Afghanistan is also part of the plan however in a fresh development, an official source in ministry of planning and development told this scribe that the railway network would be extended deep in the country to Kabul and then Mazar Sharif so that the Central Asian states could be connected via railway line with Gwadar.
All these new railway projects have been put in the long term plan of CPEC which is supposed to be completed by 2030.
"In order to effectively eventuate ML-1 project, it has been decided to break the project into three packages," an official in railway ministry said.
The ministry of railways has already submitted the PC-1 of package 1 worth of $2.389 billion to the Planning Commission.
"Keeping in view the importance of the project, Prime Minister Imran Khan has directed the concerned authorities to start work on the project as early as possible, therefore the PC-1 of first package of the project is expected to be considered by the Central Development Working Party (CDWP) later this month which would refer to the Executive Committee of National Economic Council (ECNEC) for final approval," a high official in planning ministry told this scribe.
He said once approved by the ECNCEC, this project would be presented before the the 9th annual meeting of Joint Coordination Committee on CPEC between Pakistan and China to be held in October this year for finalizing financing modalities.
The scope of work includes up gradation and doubling of ML-1 from Karachi to Peshawar and Taxila to Havelian (1872 km) including provision of modern signaling and telecommunication systems, conversion of level crossings into under passes/fly overs and fencing of track.
CPEC project leader in Ministry of Railways Basharat Waheed said that on completion of ML-1, Pakistan Railways will reap up the advantages of increase in speed from 65-105 km/hour to 120-160 km/h, increase in line capacity from 34 to 171 trains each way per day, increase in Freight Volumes from 6 to 35 million tons per annum by 2025, increase in passenger trains (ex-Karachi) from 20 to 40 each way per day and increase in railway share of freight transport volume from less than 4% to 20%.
Journey time from Karachi to Lahore will be reduced from existing 18 hours to only 10 hours while that from Islamabad to Lahore will be reduced from four and half hours to two and half hours, he added.
He said financing for the project would be arranged through loan by the government of China. Share of Chinese Loan and government of Pakistan Investment would be 85%:15%.
Loan will be on favourable terms at around 2% with grace period of 8-10 years. As per Business Plan, the loan will be paid back in 20 years, after project completion, from railway earnings.
Meanwhile according to official documents available with APP, the project will create around 20,000 direct jobs for local people while it will also create over 150,000 indirect jobs in the country.
Aug 18, 2019: The federal government has so far released Rs 15.4 billion for various ongoing and new social sector uplift projects under its Public Sector Development Programme (PSDP) 2019-20, as against the total allocation of Rs 701 billion.
Under its development program, the government has released an amount of Rs 10.2 billion for federal ministries, whereas Rs 4.6 billion for special areas, according to a data released by Ministry of Planning, Development and Reform.
Out of these allocations, the government released Rs 4.4 billion for Higher Education Commission out of its total allocation of Rs 29 billion.
Under annual development agenda, the government also released Rs 4.27 billion for Pakistan Atomic Energy Commissionfor which an amount of Rs 24.4 billion was allocated under PSDP 2018-19.
Similarly, Rs 750 million were released for Communication Division (other than NHA) as the government earmarked Rs 9.8 billion in its PSDP 2019-20.
SUPARCO received Rs 365.8 million out of its total allocation of Rs 6.03 billion whereas Revenue Division received Rs 198.15 million out of total allocation of
Rs 1.9 billion.
The government also released Rs 4.6 billion for Azad Jammu and Kashmir (AJK) block and other projects out of its allocations of Rs 27.26 billion.
The Planning Commission of Pakistan follows the specific mechanism for release of funds. During first quarter (July-September) it releases 20 percent of development funds, in second quarter (October-December) 20 percent, third quarter (January-March) 30 per cent and fourth quarter (April-June) 30 percent.
Meanwhile the Planning Commission has clarified that a news item published in certain sections of media regarding authorization of PSDP funds during 2019-20 that the Ministry of Planning, Development and Reform has processed all demands received for authorization till August 16, 2019 against PSDP allocation.
In a statement, the Planning Commission said "As per Release Strategy issued by the Finance Division on July 15, 2019, 20 percent of the PSDP allocation has to be authorized for PSDP funded projects".
Accordingly, Ministry of Planning, Development and Reform has to authorize Rs. 89 billion during the first quarter which is 20% of Pak rupee earmarked in current PSDP.
Out of this demand of Rs. 56 billion was received from all federal entities. This Ministry has authorized Rs. 22.6 billion to different ministries/division which meet SOP/codal formalities for release authorization. The remaining was not authorized mainly due to non-fulfillment of codal formalities.
The amount would be released as soon as Ministries fulfill the formalities. It would not be out of place to highlight that during last financial year Ministry of Planning, Development and Reform authorized releases of 97% of PSDP 2018-19.