BRAZIL – Brazilian financial analysts lowered their economic growth forecast for 2020 from -5.89 percent to -6.25 percent, marking the 16th consecutive adjustment, the Brazilian Central Bank said on Monday.
According to the bank’s weekly poll of economists at leading Brazilian financial institutions, analysts maintain their growth projection for 2021 at 3.5 percent.
Inflation forecasts for this year declined slightly from 1.57 to 1.55 percent, and from 3.14 to 3.1 percent for next year. Both are included in the government’s official inflation target of 4 percent for 2020 and 3.75 percent for 2021, with variations of 1.5 percent up or down.
The projected interest rate for Brazil remains stable at 2.25 percent for this year, but analysts raised their estimates for next year from 3.29 to 3.38 percent.
Latin America’s largest economy is expected to see a trade surplus of 45.5 billion US dollars in 2020, and 45 billion dollars in 2021.
Foreign direct investment is estimated to reach 64 billion dollars this year, and the next 75 billion dollars.
KARACHI: Tax collection from exports fell sharply by 25 percent year-on-year in April because the lockout hurt foreign trade for almost two months before easing recently.
Karachi’s Big Tax Payers Unit data on Wednesday showed that income tax collection from exports fell to Rs402 million in April compared with Rs538 million in the corresponding month of the last fiscal year.
The country’s exports were badly affected because the government imposed lockouts after a coronavirus outbreak. Exports recorded a 54 percent decline in April, according to the Statistics Bureau of Pakistan. Exports were recorded at $ 957 million in April compared with $ 2.09 billion in the same month last year.
Exporters lost their foreign orders due to the global pandemic while lockdown added to the insult with local manufacturing activity that was almost halted. There is a decrease in easing foreign trade cargoes because transportation is prohibited. However, income tax collection from exports recorded a 27 percent increase during the first 10 months of the current fiscal year 2019/20. Collection of income tax from exports increased to Rs5.65 billion in the July-April 2019/20 period compared to Rs4.45 billion in the same period last fiscal year.
Sources link the increase in income tax with better income in terms of rupees. The value of rupees decreased significantly against the US dollar during the period compared to the same period last fiscal year, which increased export earnings.
Exports recorded a 3.92 percent decline to $ 18.41 billion during the July-April period compared with $ 19.16 billion in the same period last fiscal year. However, in terms of rupees, exports witnessed a growth of 12.71 percent to Rs2.88 trillion. That compared to Rs2.56 trillion in the same period last fiscal year.
The Federal Board of Revenue collects a one percent tax from exports on foreign revenues, which is a waiver of final obligations, from exporters. Commercial banks and foreign exchange companies are required to collect one percent income tax on behalf of the tax authorities from exporters upon the realization of foreign exchange earnings.
Sources said tax collection from exports could further witness a decline in the coming months due to COVID-19 side effects. Economic activity began to return to normal when the government loosened the lock after standard procedures to prevent transmission of the virus locally.
The International Monetary Fund (IMF) warns Pakistan against high uncertainties related to exports.
“Externally, the global downturn, including in Pakistan’s main export markets (China, the European Union and the US), will reduce Pakistan’s export demand, especially textiles, and lead to more limited financial flows,” the IMF said in a report. Pakistan is currently implementing IMF reforms under an extended $ 6 billion funding facility to avoid a balance of payments crisis.
Commissioner Roger Goodell will not be paid during the coronavirus pandemic as part of the reduction initiated by the leadership of the NFL.
Some outlets reported widespread salary reduction provisions confirmed by memos sent to the team on Wednesday. The NFL reduction includes leave for employees who will still receive full medical benefits.
“We hope business conditions will improve and allow salaries to be returned to their current levels, even though we don’t know when that will be possible,” Goodell wrote in the memo.
Goodell’s salary is no longer a public record due to changes in tax status for the NFL. His last salary was added with an incentive of more than $ 40 million.
The salary reduction came into force in May and included manager-level staff receiving a 5 percent reduction, the director’s salary being cut 7 percent and 10 percent for the vice president. The senior vice president took a 12 percent reduction and the executive vice president lost 15 percent.
Any employee with a base salary of less than $ 100,000 is not affected by the reduction and the NFL decides not to reduce salary below $ 100,000 as a result of this reduction, the memo said.
Furloughed employees are mainly based in the New York NFL office. Goodell wrote in the memo that the league was not sure when the employee would return.
“We do not know how long the leave will last, but we hope that we will be able to return the employee to return to work in a few months,” he wrote.
– Field Level Media
Tax collection from car registrations fell 40 percent in July-March
KARACHI: Withholding tax collection from new car registrations fell sharply by 40 percent in the first nine months of the current fiscal year 2019/20, official data showed on Tuesday, as the auto sector was hit by slowing economic activity.
Tax collection from new car registrations totaled Rs700 million during the July-March period FY2020 compared to Rs1.162 billion in the same period last fiscal year.
Tax collection from motor vehicle diversion also fell by around 14 percent in the period under review. The collection amounts to Rs782 million compared to Rs905 million, according to the Karachi Regional Tax Office (RTO-II), which has jurisdiction over collecting withholding taxes on registration and removal of motor vehicles by the provincial motor vehicle registration authority.
The government took a number of steps during this period to bring the economy back on the path of stabilization. Growth slowed to 3.3 percent last fiscal year from 5.5 percent a year earlier.
The size of the economy is likely to shrink further this fiscal year because the locking of new coronaviruses has nearly stopped economic activity. In July-March, slowing economic activity and higher prices weighed on car sales, according to a source in RTO-II.
Data from the Pakistan Association of Automotive Manufacturers showed that car sales fell 47 percent to 97,664 units during July-March 2019/20. Car sales reached 185,023 units in the same period last fiscal year. In March, car sales witnessed a 70 percent decline to 6,830 units. That compared with 22,783 units in the same month last year.
Sources said since sales witnessed a massive decline in March, tax collection for April will also decline. The sources also link the reduction in tax collection from car purchases with the introduction of new 100 percent additional tax provisions on non-compliant taxpayers.
Through the Financial Law, 2019 tenth schedule was introduced to the Income Tax Ordinance, 2001 where a taxpayer who fails to file income tax returns on the due date or not on the tax net is subject to a 100 percent higher tax rate at the time of making certain transactions.
In accordance with the withholding tax rates applicable to motorized vehicles, a minimum engine capacity of up to 850cc attracts Rs7,500 to taxpayers who are included in the list of active taxpayers (ATL) and Rs15,000 for those not on the ATL. The sources said increasing the number of reporters on income tax returns also reduced income collection under the head.
The ATL 2019 weekly for returns submitted until April 5 shows that the Federal Revenue Board (FBR) received around 2.6 million returns. The FBR received an income tax return of 2.59 million until March 22, 2020.
Tax collection grew 29 percent to Rs84 billion in nine months
KARACHI: Regional Tax Office (RTO) -II Karachi posted a 29 percent growth in revenue collection during the first nine months of the current fiscal year 2019/20, official data showed on Tuesday.
The tax office collected Rs84 billion in July-March FY2020 compared to Rs65 billion in the same period last fiscal year. Sources said the tax office witnessed slower revenue growth in March because it was locked in most countries to stop the spread of the corona virus.
However, revenue growth for three quarters was unprecedented despite a sharp decline in tax deductions from cash withdrawals. The tax office witnessed a setback in revenue collection at the head of cash withdrawals from banks, which fell 62 percent. It collected Rs6 billion during July-March compared to Rs15.9 billion in the same period last year.
The advance tax remains in effect until February 2019. Through the Financial Supplementary Act (Second Amendment), 2019, the tax application is withdrawn for people who comply with the filing of income tax returns.
Then through the Finance Act, 2019, withholding tax on cash withdrawals is limited to people who don’t appear on the list of active taxpayers. Karachi’s RTO-II also witnessed a reduction in tax cuts under many other heads because of changes in the law.
However, increased tax collection can be attributed to the expansion of tax office tax efforts. The tax office is taking steps to bring professionals and the economic sector into the tax net. Karachi’s RTO-II recently issued a notification to doctors, teachers and fashion designers to file income tax returns and declare their wealth.
The collection of the head of the tax office revealed that he collected Rs79 billion as income tax during the first nine months of the current fiscal year compared with Rs60.62 billion in the same period last fiscal year, showing 31 percent growth.
The office collects Rs5 billion as sales tax during the period reviewed compared to Rs4.4 billion in the same period last fiscal year. The tax office collected Rs7.5 billion during March 2020 compared with Rs6.7 billion in the same month in 2019, showing a 12 percent growth.
In previous months, the tax office revenue collection growth was in the range of 40 percent and 60 percent. Sources said the collection would be affected due to ongoing locking.