Pkrevenue.com

Month: June 2019

  • FBR acquires information of account holders having deposits Rs0.5 million from SBP

    FBR acquires information of account holders having deposits Rs0.5 million from SBP

    ISLAMABAD: Federal Board of Revenue (FBR) to acquire information of bank account holders having deposits above Rs0.5 million from the State Bank of Pakistan (SBP), sources said on Tuesday.

    The details of account holders would be obtained for the purpose of broadening of tax base.

    The exercise started after a letter was received by the FBR from the office of Prime Minister. Prime Minister Imran Khan expressed concerns over narrow taxation base, low tax-to-GDP ratio, systematic aberrations in the taxation system and has desired that concerted efforts should be put in to increase taxation base.

    In this regard Member Inland Revenue (Operation) issued directives to all the Chief Commissioners and Director General Broadening of Tax Base for taking following measures.

    01. Data of banks account holders above the threshold of Rs500,000 should be examined with the assistance of the State Bank of Pakistan (SBP).

    02. Data of all industrial and commercial power connections should be obtained from Distribution Companies (DISCOs) and meaningfully extrapolated to ensure filing of tax returns by all concerned.

    03. Information about all owner/tenants living in houses of two kanals or more should be obtained.

    04. Information about all persons owning luxury vehicles of 2400CC and above should be scrutinized objectively.

    Information about frequent foreign travelers should be analyzed.

    The tax offices have been directed that in addition to the above, existing base line data of all the above areas/indicators along with the targets set by field formations for the tax year 2019/2020 need to be shared by June 11, 2019 as directed by the prime minister.

    The prime minister will review the performance of FBR in the context of the broadening and widening tax base on monthly basis.

  • Low property values causing huge tax losses in Pakistan

    Low property values causing huge tax losses in Pakistan

    KARACHI: A large sum of tax revenue has been lost due to unrealistic declaration of property values at the time of transaction.

    The World Bank in its recent report on Pakistan pointed out significant size of exemptions and concessions granted by the country every year.

    “Substantial exemptions also apply to property taxes, whereby properties below a certain size are exempted regardless of location, while revenue is also lost due to unrealistically low valuations used for taxation purposes,” the World Bank said in its recent report on Pakistan Revenue Mobilization Project.

    The report pointed out that The Capital Gains Tax (CGT) returns negligible receipts due to the zero rate applied to capital gains from the sale of immovable property after more than four years of ownership, and rates of 5-10 percent for properties sold after one to four years of ownership.

    The World Bank said that the efforts of tax authorities to broaden the tax base would involve scaling back the extensive tax expenditure from exemptions.

    “Multiple exemptions and discounted rates to select industries, economic actors, and economic activities (e.g. sugar, textiles, and fertilizer industries; ‘associations’ in the real estate sector; imports for infrastructure projects under the China- Pakistan Economic Corridor) are granted in each year’s budget law, which distort competition and economic actors’ incentives.”

    The report said that in FY2017/18, Pakistan’s tax expenditure (i.e., tax revenue foregone due to exemptions and concessional rates) was estimated at 2 percent of GDP, primarily due to exemptions from General Sales Tax (GST) and customs duties.

  • SECP to facilitate startups under PM’s Kamyab Jawan Program

    SECP to facilitate startups under PM’s Kamyab Jawan Program

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has assured to provide all necessary measures for the nascent companies to be registered in communication, tourism and postal sectors under Startup Pakistan Programme of Prime Minister’s Kamyab Jawan Programme.

    This assurance was given by Farrukh Sabzwari, Chairman, SECP at a meeting with Muhammad Usman Dar, Special Assistant to the Prime Minister on Youth Affairs at a meeting on Monday.

    The meeting discussed preferential treatment for the registration of new startup companies through an online process under Prime Minister’s Kamyab Jawan Programme.

    It would not only promote entrepreneurship culture in the country but would also empower youth both socially and economically.

    Muhammad Usman Dar appreciated commitment of Security and Exchange Commission of Pakistan in facilitating and promoting business activities in the country for the creation of employment opportunities for the youth.

  • FBR advised to stop issuing revision in sales tax rates on petroleum products

    FBR advised to stop issuing revision in sales tax rates on petroleum products

    KARACHI: Federal Board of Revenue (FBR) has been advised to stop practice of issuing revision in sales tax on petroleum products on monthly basis.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in tax proposals for budget 2019/2020, presented suggestions regard powers to issue notifications for change in rate of sales tax – Section 3(2)(b) of Sales Tax Act, 1990.

    According to the present law the federal government may, by notification in the official Gazette, declare higher or lower rates of sales tax in respect of any taxable goods, provided that the bill for such change has been passed by the Majlis-e-Shoora.

    From 1 July 2016 to date, there have been around half a dozen notifications for changing the rates of sales tax on petroleum products.

    The rates have varied from zero percent to 36.5 percent during this period.

    The Supreme Court of Pakistan took a suo motu notice for a similar notification on June 21, 2013 and held that the federal government had no authority to levy and recover sales tax without getting the respective bill passed from the National Assembly.

    Given the Supreme Court’s verdict on the subject matter, questions arise as to whether the frequent changes in the rates of sales tax for petroleum products are maintainable under law.

    Moreover, so many changes on such frequent notice are in itself a challenge for industries which have to go through a lengthy systematic implementation process, each time such rates are notified.

    Therefore, the OICCI recommended that that changes in sales tax rates are legally vetted by the Parliament and this monthly practice of issuing notifications at the government’s behest is abolished.

  • FBR extends dates for payment, return filing of sales tax, federal excise

    FBR extends dates for payment, return filing of sales tax, federal excise

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the last date for payment of duty and tax and filing of sales tax and federal excise returns for the month of May 2019.

    The FBR issued notification on Monday addressing all chief commissioners of Inland Revenue regarding extension in the date for submission of sales tax and federal excise return for the tax period of May 2019.

    The dates have been extended considering the Eid holidays which are falling on June 04 to June 07, 2019.

    The FBR extended the date of submission of Annexure-C and Annexure-I of the sales tax and federal excise return up to June 15, 2019, the date of payment of sales tax and federal excise duty up tot June 18, 2019 and the date of submission of sales tax and federal excise return up to June 21, 2019 for the tax period May 2019 due to Eid-ul-Fitr holidays.

    Earlier, tax practitioners requested the FBR to extend the dates.

    A letter has been sent on Friday to FBR Chairman Syed Muhammad Shabbar Zaidi for urgent consideration and for extension of time for e-filing of sales tax annexure ‘C’ and sales tax returns for the tax period May 2019.

    The Pakistan Tax Bar Association (PTBA) in its letter to FBR chairman informed that the last date for e-filing of sales tax annexure ‘C’ of sales tax returns and filing of sales tax return for the month May 2019 is June 10, 2019 and June 15, 2019, respectively. However, due to Eid Holidays due from June 04 to June 08, 2019, all the business houses will remain closed.

    The PTBA further said that the first word day after Eid and weekly holidays shall be June 10, 2019 which will be the last day of filing of Annexure “C”. Therefore it would not be practically possible to submit annexure “C” and Sales Tax Return in time.

    In view of above, the PTBA requested to extend the last date of e-filling of Sales Tax annexure “C” and e-filling of sales tax return up to June 18, 2019 for the tax period May 2019 to facilitate the taxpayers to fulfill their legal obligations properly.

  • SRB extends dates for tax deposit and return filing

    SRB extends dates for tax deposit and return filing

    KARACHI: Sindh Revenue Board (SRB) has extended the last date for payment of sales tax on services and filing of sales tax return for month of May up to June 18 and June 21, 2019, respectively, a notification said on Monday.

    The decision to extend the dates was taken considering the Eid holidays that are falling on June 04 to June 07, 2019.

    The SRB said that it had permit the registered persons, including the withholding agents covered by the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2011, to:

    i. e-depost the amount of Sindh sales tax for the tax period May 2019, on or before Tuesday, June 18, 2019; and

    ii. e-file their tax returns for the tax period May 2019, on or before Friday June 21, 2019.

  • SBP issues Rs360 billion worth fresh currency notes on Eid-ul-Fitr

    SBP issues Rs360 billion worth fresh currency notes on Eid-ul-Fitr

    KARACHI: The State Bank of Pakistan (SBP) has issued Rs360 billion worth fresh currency notes on the occasion of Eid-ul-Fitr, said a statement on Monday.

    The SBP said that through 16 field offices of its subsidiary SBP-Banking Services Corporation (SBP-BSC), provided fresh banknotes of various denominations aggregating to Rs360 billion, including Rs61 billion of Rs100 and below denominations, via cash counters of banks and SMS service (8877) to general public during Ramazan.

    Out of Rs61 billion, Rs54 billion were issued through the SMS service which was available in 142 cities through more than 1,700 commercial bank branches and 16 field offices of SBP BSC.

    The service catered to more than 3 million people before Eid-ul-Fitr.

    State Bank has also issued a sufficient quantity of fresh notes of higher denominations to banks for smooth ATM operations during the Eid Holidays.

    In this regard, special teams of SBP and SBP BSC officials shall inspect and monitor the working of ATMs across Pakistan to ensure uninterrupted availability of cash to the general public during the Eid holidays.


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  • SBP issues instructions for bank account biometric verification of Pakistanis living abroad

    SBP issues instructions for bank account biometric verification of Pakistanis living abroad

    KARACHI: The State Bank of Pakistan (SBP) on Monday issued instructions for biometric verifications of bank account holders of Pakistanis living abroad.

    The banks are conducting biometric verification of existing customers in compliance of Anti Money Laundering/ Counter Finance Terrorism (CFT) Regimes.

    a. Non-resident Pakistanis (NRPs) as defined in Income Tax Ordinance, 2001 – Chapter 5, Division II, Section 82:

    For customers who fall under the definition of NRP, the bank/ DFI may obtain a signed undertaking from the customer invariably containing the following:

    • Customer’s NRP status along with proof (i.e. copy of valid passport, visa, exit stamp, resident permit, etc.)

    • Copy of valid ID document (CNIC/ NICOP)

    • Account number(s) of the customer’s account(s) maintained with the bank as per customer record

    • Undertaking by the customer to inform the bank of any change in residency status

    The bank/ DFI, after verification of the customer’s signature from its record, shall accordingly update/ reflect the NRP status in the customer profile.

    For such customers, as an alternative to biometric verification, the bank/ DFI may conduct fresh NADRA Verisys using the information provided by the customer.

    b) Resident Pakistanis temporarily outside Pakistan:

    For customers who do not qualify under the definition of NRP, but are currently/ temporarily outside Pakistan for any reason, the bank/ DFI may obtain reasonable evidence/ proof from the customer regarding his/ her absence from the country (i.e. copy of valid passport, visa, exit stamp, resident permit, etc.) and the expected date of return.

    For such customers, as an alternate to biometric verification, the bank/ DFI may conduct fresh NADRA Verisys using the information provided by the customer.

    The bank/ DFI may retain the NADRA Verisys in place of biometric verification until the customer returns, subject to reasonable time limit (not more than six months) to be defined by banks/ DFIs. Biometric verification of such customers shall be done immediately upon the customer’s return to the country.

    c) Joint Accounts- where one account holder is outside Pakistan (NRP/ temporarily):

    For joint account holders, treatment of biometric verification should be done according to the status of respective individual. Biometric verification should be conducted for the joint account holder who is resident Pakistani, while for other joint account holders, the relevant procedure described at (a) and (b) above should be adopted.

    The SBP said that it is again advised that as per the Frequently Asked Questions (FAQs) on Use of Biometric Technology issued by SBP vide BPRD Circular Letter No. 20 dated June 14, 2017, banks/ DFIs may operate accounts on the basis of NADRA Verisys in genuine cases (as provided in FAQ No. 8), provided the bank/ DFI is satisfied and proper reason/ proof is recorded/ retained by the bank/ DFI.

    For such cases in line with Para-3 above, in the absence of biometric verification, bank/ DFI may ensure that requisite identification document has been obtained, marked as ‘original seen’ by their staff and verified through NADRA Verisys. Moreover an undertaking should be obtained from the customer declaring that the particulars provided to the bank/ DFI are correct and that their staff has verified the same. The declaration should be endorsed by the Branch Manager and should be available in the bank’s centralized record.

  • Internet disconnected, information sharing banned at FBR for budget 2019/2020

    Internet disconnected, information sharing banned at FBR for budget 2019/2020

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed several restrictions to prevent unauthorized access to documents of budget 2019/2020 till June 11, 2019. This restriction included inactive internet connection and ban on transferring any file.

    In an office order issued on Monday, the FBR said that internet connections, except for Chairman and Members FBR shall become inactive on June 10 and June 11, 2019 till conclusion of Budget Speech of the Finance Minister.

    Internet connection of Coordinators/ Deputy Coordinators (if needed) will only be made active with prior approval of Chief Management/ Coordinator Budget.

    The FBR said that due to budget announcement on June 11, 2019 restrictions on the access of servers/information system running at FBR HQ will come in force on June 10, 2019 from 8:00 am till the end of budget speech as per following details:

    E-Dox:

    a. Message and Engagement will be disabled and would not be accessible for the internal users of FBR House.

    b. Users located in the FBR house premises would only be limited in routing/ marking their correspondence in the wings located within FBR House. However, external users such as Regional Tax Offices (RTOs), Large Taxpayers Units (LTUs) and Mode Customs Collectorates (MCCs) would be able to mark their correspondence to the internal user/Wing of FBR.

    c. All training versions of the e-Dox system would be inaccessible during the budget days.

    d. Held desk for e-Dox will be closed.

    HRIS:

    a. Access to the system for correction of disposition list, online application of leave and other facilities will be completely banned for field formations.

    b. Help desk for HRIS will be closed.

    e-FBR portal:

    a. FBR e-portal/server will remain accessible for authorized users outside FBR HQ premises but no one within FBR HQ will be allowed to access FBR e-portal during budget exercise.

    STARR & SALES TAX SYSTEMS:

    a. STARR & Sales Tax System / Server will remain inaccessible for FBR HQ users, however, authorized users / outside FBR HQ premises will be allowed to access the system/server.

    PRAL & FBR Network:

    a. While the local networks of PRAL HQ/CDA Block II offices and FBR HQ will remain operational individually, transfer to any files/documents from FBR HQ Network to PRAL HQ/CDA Block II offices network and vice versa will be banned.

    b. Internet services in FBR HQ will remain unavailable in FBR HQ till conclusion of budget speech by the finance minister.

  • Share market falls on concerns over budgetary measures

    Share market falls on concerns over budgetary measures

    KARACHI: The stock market lost around 470 points on Monday, the last session before week-long Eid holidays, due to concerns over measures to be announced in the budget 2019/2020 on June 11, 2019.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 35,505 points as against 35,975 points showing a decline of 470 points.

    Analysts at Arif Habib Limited said that the last trading session before Eid and budget ended negative for the bourse.

    Although clarity on EMOF and SEF was given by ECC last week, but investors’ seemed concerned over Budget, which is likely to adopt tough budgetary measures to bring fiscal discipline.

    Besides, rapidly falling international crude prices brought selling pressure in E&P sector that accentuated the impact on market.

    Banking sector led the volumes table with 39 million shares followed by Technology (24 million). Amongst scrips, BOP scored 25 million shares followed by WTL amongst Technology scrips with 20 million shares. MLCF ranked amongst top 10 volume scrips for the second consecutive day, amidst selling pressure.

    Sectors contributing to the performance include E&P (-205 points), Fertilizer (-80 points), Cement (-57 points), O&GMCs (-40 points), Textile (-33 points), Banks (+22 points).

    Volumes declined significantly from 199 million shares in last trading session to 124.6 million shares (-37 percent DoD).

    Average traded value also declined by 47 percent to reach $31.7 million as against $ 60.3 million.

    Stocks that contributed significantly to the volumes include BOP, WTL, MLCF, OGDC and KEL, which formed 50 percent of total volumes.

    Stocks that contributed positively include HBL (+61 points), MCB (+51 points), EFUG (+7 points), ABOT (+6 points) and HASCOL (+6 points). Stocks that contributed negatively include PPL (-80 points), POL (-62 points), OGDC (-42 points), EFERT (-32 points) and LUCK (-31 points).