Daily Archives: November 24, 2020

Withholding Tax reduced to ZERO for IT & ITeS Exports in Special Technology Zones (STZs)

Withholding Tax reduced to Zero for Information Technology and Information Technology enabled Services (IT & ITeS) Exports in Special Technology Zones (STZs)  Reform ID  F080    Reform Description   Before:  There were no special tax exemptions for Information Technology and Information Technology enabled Services (IT & ITeS) sector to enhance its exports.   After:  Now, custom duties have been exempted to facilitate the exports of…

Scope of Long-Term Financing Facility (LTFF) expanded

Long-Term Financing Facility (LTFF) Scheme extended to all sectors, with revised limit of Rs. 5000 Million  Reform ID  F079    Reform Description   Before: Long Term Financing Facility (LTFF)/ Islamic Long Term Financing Facility (LTFF) was restricted to few sectors and limit was up to Rs. 2,500 million which was regarded as insufficient.  After: The scope of LTFF/ILTFF has been extended to all sectors…

Fresh Meat included in Export Finance Scheme (EFS)

Fresh Meat Products included in Export Finance Scheme (EFS)  Reform ID  F088    Reform Description    Before: Previously, only frozen meat products were included in the Export Finance Scheme and short term financing facility was not allowed for fresh meat products.  After: Now, fresh meat products have also been added in the Export Finance Scheme along with frozen food products.   Sector  …

Import of Small Quantity Materials made easier

Import of Small Quantity of Material made easier on Open Account Basis  Reform ID  F077    Reform Description   Before: Import of material in small quantities was subjected to stringent regulations under the Foreign Exchange Manual.   After:  Industry friendly policies have been introduced to allow small quantity import of material on an open account basis.   Sector   All Sectors  Beneficiaries  All Businesses  Jurisdiction/Location   Federal (Entire…

Local Banks allowed to IssueCross Border Corporate Guarantees to their Foreign Branches or to other Foreign Commercial Banks

Local Banks allowed to Issue Cross Border Corporate Guarantees to their Foreign Branches or to other Foreign Commercial Banks  Reform ID  F076    Reform Description  Before: Foreign subsidiaries were unable to secure direct financing from banks to meet their working capital.   After: The Authorized Dealer (Banks) have been allowed to open standby letter of credit to facilitate the offshore…

Payment to Foreign Digital Service Provider Companies made easier

Payments against Digital Services Obtained made easier   Reform ID   F074   Reform Description   Before:  Procedure for payment to foreign vendors against digital services obtained was lengthy and involved approval from SBP for each transaction above USD 100,000.    After: Now State Bank has allowed payment up to USD 400,000 to 62 white listed companies without obtaining approval from State Bank.  Sector   IT & ITeS …

Measures Taken to Enhance Digital Banking Channels

Enhanced Provision of Banking Relationships & Digital Banking Channels  Reform ID   F073   Reform Description  Before: There were restrictive arrangements for cloud outsourcing arrangement for banking sector.   After: Enhanced banking relationships with digital banking options to cater to the requirements of IT & ITeS and other sectors.  Sector   IT & ITeS  Beneficiaries  Banking channel users, Banking and Financial Services Businesses  Jurisdiction/Location   Federal (Entire Pakistan)  Department  SBP …