Tag: TAX

March 30, 2020: The Economic Coordination Committee (ECC) of the Cabinet Monday approved the fiscal stimulus package of Rs. 1.2 trillion aimed at addressing the ongoing challenges that emerged due to Covid-19 (Coronavirus) outbreak.

The ECC meeting was chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Cabinet Division, according to press statement issued by the finance ministry.

The purpose of the meeting was to fulfill the necessary requirements for different relief measures already announced by the prime minister for public due to the ongoing Coronavirus Pandemic, the statement added.

The ECC approved a Supplementary Grant of Rs. 100 billion for the Residual/Emergency Relief Fund in terms of article 84(a) of the constitution for provision of funds for mitigating the effect of COVID-19.

The special package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the committee.

The package would provide cash grants to 12 million families under the regular “kafalat program” and Emergency Cash Assistance on the recommendation of the district administration.

The assistance would be provided for four months and besides the BISP beneficiaries, it would be one time dispensation, it said, adding the cash would be provided either in one installment of Rs 12000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs. 6000/- each.

The Poverty Alleviation Division was asked to present both options with feasibilities.

The partner banks should be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under "Ehsaas Cash Assistance Package in Response to COVID-19" Pandemic.

After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs. 200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak.

It was estimated that around three million workers would fall in this category and they would have to be paid a minimum wage of Rs.17500 per month.

The estimated cost of this provision for daily wagers comes around to Rs. 52.5 billion a month. The provincial labour departments would ensure the delivery of assistance to the laborers while the provision of funds should be the responsibility of the federal government.

The committee directed that immediate consultation with the provincial labor departments( mentioned under the provincial rules of business) should be carried out for providing timely assistance to those who were in need.

The ECC approved Rs. 50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates.

USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division.

The corporation had further planned to procure essential items within 2-3 week, the statement added.

It was directed that USC should engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.

The ECC also approved Rs.75 billion for Federal Board of Revenue (FBR) to enable it to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years. The amount would help approximately 676055 beneficiaries by improving their liquidity position.

The ECC also allowed reduction of different taxes and duties on import and supply of different food items for alleviating the adverse impact of COVID -19 on different sections of the society.

Rate of advance tax on the import of different pulses was reduced to 0% from 2%. Individuals and associations of persons (AoPs) providing tea, spices, dry milk and salt to USC without a brand name would pay 1.5% withholding tax instead of 4.5%.

Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5% withholding tax instead of 4.5% earlier.

Additional customs duty(ACD) @ 2% on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) had also been exempted.

ECC approved the supplementary grant of Rs. 30 billion to Ministry of Commerce to payback duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slow down due to worldwide outbreak of Corona epidemic.

The committee was briefed SBP is working on payment of claims worth Rs. 49 billion out of which around 40 billion will be paid by June 2020.

The ECC approved a supplementary grant of Rs. 6 billion for Pakistan Railways to meet its expenses, the statement said, adding the Railways had suspended its passenger train services around the country since 19-3-2020.

The approved amount should be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers.

Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended, the statement concluded.

APP

March 30, 2020 (MLN): The foreign net outflow continued to increase to $76.53 on March 27, 2020 from Pakistan’s sovereign debt securities and equity as fears of a global recession over COVID-19 spread heightened risk aversion.

According to the daily SCRA data published by SBP, the local market witnessed total inflows of $1.43 million on the said day whereas foreigners withdrew $74.65 million from T-bills and $3.31 million from local equities, aggregating the outflow of $77.96 million.

This month so far, international investors detached $1.65 billion (net) from T-bills, whereas, $81.37 million and $45.397 million (net) have been withdrawn from equities and PIBs respectively, bringing the total net outflows to arrive at $1.78 billion.

Cumulatively, from July to date, foreigners have poured $3.43 billion in T-bills, out of which $1.98 billion has been withdrawn, indicating $1.44 billion still parked in T-bills.

With regards to PIBs, the total foreign inflow from July 2019 to date has been recorded at $60.5 million, out of which $45.42 million has been extracted so far.

This suggests that since July, cumulatively foreigners invested $3.49 billion in Government Securities (T-bills and PIBs) out of which $2.03 billion has been withdrawn, bringing the total net inflows to settle at $1.46 billion.

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March 30, 2020 (MLN): Profits and dividends repatriated by Pakistani sectors during February 2020 stood at $27.3 million, showing a decrease of 75% as compared to the previous month and 64% as compared to the same period of last year.  

During the period Jul-Feb FY2020, the profit repatriation declined by merely 2.1% to $973.9 million over the same period of last year.

According to the latest data released by the State Bank of Pakistan (SBP), the Oil and Gas exploration sector made the highest repatriation of profits during the period at $20 million, owing to a rise in oil prices in the international markets. However, this amount was 68% lower against the profits repatriated in the previous month and 44% against profits repatriated in the same period of last year.

The profits repatriated by the remaining sectors were meager against that of the leading sector. The Power Sector hardly took the second lead, as it managed to repatriate only 3.4 million, which is surprisingly elevenfold greater as compared to the previous month and 44% as compared to the same period of last year.  

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March 30, 2020 (MLN): The price of 24 Karat-Gold plunged up by Rs 4,400 to close at Rs 96,600 per tola due to a decrease in demand for safe-haven metals in local markets. The precious yellow metal of 24-Karat had closed at Rs 101,100 per tola in the previous session.

According to the Karachi Sarafa Association, the silver prices edged higher by Rs 14.30 to peg at Rs 950 per tola as compared to Rs 935.7 during the last trading day.

In the global markets, the price of per ounce gold was traded at $1,620.

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March 30, 2020: The Central Development Working Party (CDWP) Monday approved two projects worth Rs 466.264 million and recommended four projects valuing Rs 133 billion to Executive Committee of National Economic Council (ECNEC) for consideration.

Secretary Planning Zafar Hasan, senior officials from federal and provincial governments also participated in the meeting while representatives from provincial governments participated through videoconference.

Projects related to Health, Physical Planning and Housing, Transport and Communication and Water Resources were considered during the meeting.

Health-related project from Government of Punjab namely ‘Punjab Human Capital Investment project” worth Rs. 52.8 billion was referred to the Executive Committee of the National Economic Council (ECNEC).

The project envisages increasing the access to quality health, education and social protection services among poor and vulnerable households in 11 districts of Punjab.

In the physical planning and housing sector, the CDWP approved construction of Admin Block, Magazine Quarter Guard, Barracks, MT Shed, Horse Stable and Parade Ground in Diplomatic Enclave, Islamabad worth Rs 280 million.

The Committee also cleared Position Paper titled “Construction of 4 Nos, B type Police Station in Various Sector of Islamabad” worth Rs 185.416 million.

Two Position papers related to Transport and Communications were presented namely “Peshawar Northern Bypass” worth Rs 21.338 billion and “Up-gradation, widening and construction of Surab- Hoshab Road N-85 (454 km)” worth Rs 28.823 billion both were referred to ECNEC for further approval.

The project “Khyber Pakhtunkhwa Irrigated Agriculture Improvement Project” worth Rs 30048.747 million was also referred to ECNEC for further approval.

APP