Latest news with #Rs12.35
Express Tribune
17-03-2025
- Business
- Express Tribune
Top-listed firms paid Rs1.22tr in taxes in 2024
In direct tax contributions, Pakistan's top-listed companies collectively added Rs1.22 trillion in the calendar year 2024 (CY24)a 2.2% year-on-year (YoY) increaseaccounting for 23.6% of the country's total direct tax collection. Auto assemblers emerged as the frontrunners, registering a staggering 62% surge in tax contributions, followed by fertilisers (19%), investment banks (15%), commercial banks (12%), textiles (10%), and cement (9%). Amid these trends, the government revised its tax collection target for FY25 downward to Rs12.35 trillion (from Rs12.97 trillion) following International Monetary Fund (IMF) negotiations. While total tax revenues soared 27% YoY to Rs10.47 trillion in CY24, direct tax collection alone jumped 33% to Rs5.16 trillion. However, not all sectors thrived. Refineries, chemicals, Oil Marketing Companies (OMCs), and Exploration and Production (E&P) firms faced tax contribution declines, reflecting sector-specific challenges. With KSE-100 companies delivering a significant share of national revenue, Pakistan's capital market remains a vital force in the country's fiscal landscape. "The numbers are in, and the tax game is strong," wrote Arif Habib Limited (AHL) analyst Muhammad Iqbal Jawaid in a research report. The government has now recalibrated its tax collection target for FY25 to Rs12.35 trillion, down from Rs12.97 trillion, after negotiations with the IMF. Under this revised target, the direct tax collection aim for FY25 adjusts to Rs5.25 trillion, from Rs5.51 trillion. For context, fiscal year 2004's direct tax revenue stood at Rs4.53 trillion. On a calendar-year basis, total tax collection in CY24 reached Rs10.47 trillion, marking a stellar 27% YoY increase. Direct tax collection alone surged 33% YoY to Rs5.16 trillion. During the first half of fiscal year 2025 (1HFY25), direct tax collection stood at Rs2.78 trillion, reflecting a strong 29% YoY growth. KSE-100 companies played a vital role, contributing Rs687 billion in the first half of fiscal year 2025, accounting for 24.71% of total direct tax collection and growing by 10% YoY. However, not all sectors experienced growth, as some witnessed a decline in tax contributions. Refineries saw the steepest drop at 47%, followed by chemicals at 30%, OMCs at 27%, and E&P firms at 18%. Despite these downturns, KSE-100 companies continued to play a critical role in tax revenue generation, reinforcing the capital market's importance in the broader economic framework. Calendar year 2024 was a challenging year for banks, with a series of tax policy changes significantly impacting the sector. Initially, banks were required to maintain a 50% advances-to-deposits ratio (ADR) to avoid penal taxes ranging from 10% to 16% on investment income. However, a late-year policy revision increased the corporate tax rate for banks from 49% to 54%, incorporating a 10% super tax. As a result, the sector's total tax contributions grew by 12% YoY. In the E&P sector, tax contributions rose 35% YoY in 1HFY25. However, this increase was primarily due to the absence of a key tax benefitthe reversal of depletion allowance taxationwhich had been available in 1HFY24 but was not present in the latest period, amplifying the tax charge. The fertiliser sector saw a strong boost in tax contributions, growing 19% YoY in CY24, driven by a surge in profitability. Urea and DAP prices increased by 39% and 9% YoY, respectively, leading to higher pre-tax earnings and, consequently, higher tax payments. Similarly, the cement sector benefited from lower interest rates in the first half of fiscal year 2025, which allowed manufacturers to generate higher taxable income, resulting in a solid 34% YoY increase in tax charges. On the other hand, the OMC sector faced declining tax contributions, slipping by 10% in 1HFY25. This drop was primarily attributed to a decline in the retail prices of motor spirit (MS) and high-speed diesel (HSD), which squeezed revenues and, in turn, reduced tax obligations for the sector. Despite some sectoral weaknesses, the strong tax contributions from KSE-100 companies reinforce their critical role in Pakistan's tax revenue framework. With evolving government policies and macroeconomic shifts, sectoral tax contributions remain an important area to watch in the coming months.
Express Tribune
14-03-2025
- Business
- Express Tribune
PSX rallies on Moody's upgrade, IMF relief
The new flat 15% CGT rate for filers and 20% for non-filers will be applicable to only those shares that are bought and sold on and after July 1, 2017. PHOTO: FILE Listen to article The Pakistan Stock Exchange (PSX) closed on Friday on a bullish note as investor confidence remained strong, driven by expectations of a favourable International Monetary Fund (IMF) review and an optimistic earnings outlook. The KSE-100 index gained nearly 450 points, or 0.38%. Market sentiment was further lifted by Moody's upgrade of Pakistan's banking sector outlook and reports of the IMF lowering the tax collection target for FY25 to Rs12.35 trillion, easing fears of a mini-budget. This played a key role in sustaining the rally at the PSX. Looking ahead, analysts anticipate a continued bullish momentum, with 115,000 standing as a key support level and prospects of reaching all-time highs. "Stocks closed bullish on a strong earnings outlook. Investors also weighed Moody's upgrade of Pakistan's banking outlook to positive and reports of the IMF slashing tax collection target for FY25 to Rs12.35 trillion, dispelling fears of a mini-budget," said Arif Habib Corp MD Ahsan Mehanti. At the end of trading, the benchmark KSE-100 index posted a surge of 441.93 points, or 0.38%, and settled at 115,536.17. Arif Habib Limited (AHL) said in its daily report that on Friday 52 stocks advanced, while 40 declined. The top contributors to the index gains were Mari Petroleum (+4.85%), Fauji Fertiliser Company (+1.03%) and Systems Limited (+0.57%) whereas Pakistan Petroleum (-0.83%), PSO (-0.95%) and Lucky Cement (-0.49%) emerged as the biggest drags. In a significant development, it said, Pakistan and the IMF agreed to revise downward the macroeconomic and fiscal framework for the current fiscal year. As part of the revision, the annual tax collection target has been reduced from Rs12.97 trillion to Rs12.35 trillion. According to AHL, the market sentiment remains highly positive, with the KSE-100 index continuing its upward trajectory. The index structure looks strong, with all-time highs now within reach. The 115,000 level is emerging as a key support, suggesting that bullish momentum could accelerate further. Overall, it was a solid week for the KSE-100, which gained 1% week-on-week and hit a high of 115,700, it added. Topline Securities, in its market review, said that the KSE-100 index extended gains as expectations that Pakistan would clear its first review of the $7 billion Extended Fund Facility of the IMF continued to garner investor interest. The top positive contribution to the index came from Mari Petroleum, Fauji Fertiliser Company, Engro Fertilisers, Systems Limited, Air Link Communication and Pak Elektron as they cumulatively contributed 426 points. Traded value-wise, Mari Petroleum (Rs2.68 billion), PSO (Rs2.19 billion), Maple Leaf Cement (Rs1.07 billion), DG Khan Cement (Rs875 million), Fauji Cement (Rs848 million) and Lucky Cement (Rs612 million) dominated the trading activity, Topline added. Muhammad Hasan Ather of JS Global said that the KSE-100 index saw a rally, with the benchmark index closing at 115,536, up 0.4%. The rise was driven by a strong buying momentum in key sectors such as auto, cement, commercial banks and exploration & production. "Looking ahead, the market is expected to remain positive, supported by investor confidence and sectoral strength," he said. Overall trading volumes were recorded at 360.5 million shares compared with the previous session's 382.8 million. The total traded value stood at Rs21 billion, reflecting a decline from Rs25.4 billion in the last session. Shares of 435 companies were traded. Of these, 195 stocks closed higher, 169 fell and 71 remained unchanged. Pakistan International Bulk Terminal was the volume leader with trading in 42.7 million shares, gaining Rs0.50 to close at Rs9.92. It was followed by The Bank of Punjab with 36.1 million shares, losing Rs0.36 to close at Rs13.09 and Fauji Foods with 25.6 million shares, gaining Rs0.84 to close at Rs16.06. During the day, foreign investors sold shares worth Rs166.2 million, according to the NCCPL.
