Tahseen Rehman & Co. is firm of Chartered Accountants providing high quality audit, accounting, taxation and consultancy services to small and medium size businesses across Pakistan.
On Saturday 18th April 2020, FBR issued a circular for the extension in the last date of the payment of sales tax for the month of March 2020. The date has been further extended till April 27, 2020. The payment was previously due on April 15, 2020.
Also, there has been an extension in the last date for filing monthly sales tax returns for the month of March 2020 up to April 30, 2020. The returns were previously due on April 18, 2020.
The government has made an extension in the lockdown periodup to April 30, 2020, with an aim to contain the outbreak of COVID-19.
The FBR, in light of extension in lockdown, has facilitated the people by extending the dates of sales tax payment and filing of sales tax returns.
It is for the third time in a month that the State Bank of Pakistan has cut down the policy rate for 13.25% to 9%.
In a statement, the SBP said that due to the decline in growth and inflation expectations, the policy rate has been decided to further cut down by 200 Basis points to 9% in an emergency meeting of the Monetary Policy Committee (MPC).
Forward-looking real interest rates (the policy rate less expected inflation) get reduced to zero after this decision, and this is in the middle of the ranges across most emerging markets.
This action would be acting like a cushion to the impact of COVID-19 over growth and employment, as it is providing ease to borrowing cost and the debt service burden on households and firms, while financial stability is also being maintained.
Recovery to economic activity would also be ensured by this step after the pandemic is subsidized.
It is also highlighted by the MPC that this rate cut would be complemented with other supportive measures of the SBP for the economy, and these include concessional financing to companies (Check details) that do not layoff their employees, an extension of one year for repayment of principal, doubling the period of rescheduling of loan from 90 to 180 days and also the concessional financing to hospitals and medical centers. (Check details)
The worsening outlook of the coronavirus pandemic for global and domestic economic activity was noted by the MPC in the last meeting held on 24th March 2020.
In this situation, “MPC remains ready to take whatever further actions become necessary in response to the evolving economic impact of the Coronavirus.” said the MPC.
The global and domestic outlook is being further deteriorated and there is the expectation for the world economy to enter into the sharpest downturn since the great depression, contracting by as much as 3 percent in 2020 (As per the projections released this week by IMF).
In addition to all this, oil prices have been plummeted further, globally and the persistence of low prices is being suggested by the future markets.
Domestically, high-frequency indicators of activity―including retail sales, credit card spending cement production, export orders, tax collections, and mobility data from Google’s recently introduced Community Mobility Reports―suggest a significant slowdown in most parts of the economy in recent weeks.
Marked reduction in inflation momentum has also been shown by the CPI out-turn of March and the more recent weekly SPI released in April.
Before recovering to around 2 percent growth in the financial year 2020,the economy is being expected to contract by -1.50 percent in 2020. Expectation about inflation for the current year is close to previously announced 11-12 percent and would fall to 7-9 percent next year.
Due to some upside risks of inflation due to temporary supply disruption and food price shocks, these risks are unlikely to generate the second-round effects due to the weakness of the economy. Also, the inflationary impact of the recent exchange rate depreciation is expected to be contained given low import demand and falling global prices.
Workforce all across the world has been threatened by the outbreak of Coronavirus disease (COVID-19), same is the case in Pakistan as the COVID-19 is evolving in Pakistan at an alarming rate.
For the protection and well-being of the employees of the Securities and Exchange Commission of Pakistan (SECP) deputed at the Company Registration Offices (CROs) and facilitation centers, SECP has issued a circular (No. 13/2020) dated 14th April 2020 to explain the preventive measures that have been taken by the SECP.
Following list describes the preventive measures by SECP:
As per the advice of local authorities, Public dealing at the Company Registration Offices (CROs) and Facilitation centers has been stopped until further instruction.
As provided in Regulation 19 of the company (Registration Offices) Regulations, 2018, there is a stoppage in the inspection of documents and records of companies. However, respective CROs In-charges may allow online inspection in case of dire need, and may vary from case to case.
Time limit for the response has been enhanced to 30 days as the companies are being faced with difficulties in responding to the queries and letters of CROs.
On7th April 2020, the Federal Board of Revenue (FBR) issued a circular (no. 2020/64599-R) to elaborate the Speedy clearance of Genuine tax refunds as the prime minister’s package for the business community. The circular mentioned that certain field formations are processing the claims at their own will and they are not following the queue available in the refund processing system.
It has been reiterated in the circular that all filed formations should be following the queue strictlyand should be processing the claims according to the law and procedure.
In the circular, it was mentioned that all the CCIRs have been requested to monitor the refund process personally, and they should ensure that the sanction is of only genuine refund claims, the process is as per law and the queue is being followed strictly.
