ISLAMABAD: Federal Board of Revenue (FBR) granted fifth extension for filing income tax return for tax year 2019 up to January 31, 2020.
The FBR issued Income Tax Circular No. 18 of 2019 for extension in date of filing income tax returns/statements for tax year 2019.
The FBR said that the date of filing of return of total income / statements of final taxation for individuals and associations of persons for the tax year 2019 which was due on September 30, 2019 and extended up to December 31, 2019 has been extended up to January 31, 2020.
The FBR further said that the date of filing of return of total income/statements of final taxation for companies for the tax year 2019, which was due on September 30, 2019 and extended up to December 31, 2019, in respect of those companies who have paid 90 percent of the admitted tax liability on or before September 30, 2019, has been allowed further extension up to January 31, 2020.
The date of filing of return of total income/statements of final taxation for companies for tax year 2019, which was due on December 31, 2019 has also been extended up to January 31, 2020.
ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs2,080 billion during first half (July – December) 2019/2020 as compared with Rs1,795 billion in the corresponding half of the last fiscal year, showing a growth of 16 percent.
FBR chairman Syed Shabbar Zaidi in a tweet message said that the revenue body collected Rs2,080 billion up to December 31, 2019 posting 16 percent growth.
On the basis of above data, the FBR collected Rs463 billion during December 2019 as compared with Rs411 billion in the same month of the last year, posting 12.65 percent growth.
The FBR was required to collect Rs2,198 billion during first half of the current fiscal year as per revised performance criteria of International Monetary Fund (IMF).
Considering the performance criteria the FBR’s revenue shortfall was at Rs118 billion during first half of the current fiscal year.
According to Country Report Pakistan released by IMF on Monday the actual performance criteria for revenue collection was Rs2,367 billion during first half (July – December) of current fiscal year, which has been revised downward by Rs169 billion to Rs2,198 billion.
As per IMF documents the FBR failed to achieve the first quarter (July – September) 2019/2020 target of Rs1,071 billion and its collection was at Rs964 billion.
The actual revenue collection target for current fiscal year was Rs5,550 billion. However, the indicative target as per IMF documents has also been revised downward to Rs5,238 billion.
The FBR has to raise revenue collection to Rs3,520 billion by March 2020 in order to ensure the desired target for current fiscal year.
As per IMF documents: “Tax revenue is now expected to be 0.5 percent of GDP lower than originally expected: while domestic collection is envisaged to remain strong, growing by over 25 percent y-o-y over FY 2020, growth in trade-related tax revenues is expected to remain subdued as declining imports continue to weigh on collections—more than 40 percent of total tax revenue in Pakistan is collected at the import stage.”
The FBR has been given revised Indicative Targets for end December 2019 including net tax collection to recognize the faster than expected external adjustment negatively impacting customs revenue, besides net accumulation of tax refund arrears to capture the authorities plan to reflect the end-June stock of tax refund arrears.
KARACHI: The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) posted a return of 10 percent during year 2019.
Analysts at Arif Habib Limited said that KSE-100 index posted a return of 9.9 percent YoY during CY19 while USD-based return clocked-in at negative 1.4 percent.
First positive return after two years of consecutive negative returns, the analysts said.
Barring the last couple of months, CY19 was nothing short of a horror story for the equity market with a dominating bearish trend. During the year, the KSE-100 index crashed to a 5-Yr low of 28,765 points on August 16, 201919, which was a 22 percent contraction since December 2018 and a 31 percent decline on a YoY basis.
Stringent conditions attached with the USD 6 billion IMF bailout package such as 40 percent higher FBR tax revenue target, currency depreciation, cap on sovereign guarantees, electricity and gas tariff hikes were the sources of pessimism during the outgoing year.
Meanwhile, tension on the border with India following the air combat in Feb’19 had its own adverse effects on the overall sentiment.
Albeit, the domestic equity bourse showed a sharp inflection post its low in August 2019.
Till date, since its low the market has shown a remarkable rebound of 42 percent, and in effect turning the CY return positive.
Undoubtedly, dirt cheap valuations across the index and over-selling were pivotal factors for the impressive market performance but we see the economy entering into stabilization mode as a more sustainable and important reason.
Analysts at Topline Securities said that KSE-100 index during 4Q2019 recorded growth of 8,656 points/27 percent; which is the highest quarterly gain achieved by index since 3QCY09 to close at level of 40,735.
The recovery in equities was mainly led by improved macroeconomic factors which included 1) declining bond yields leading investors towards equities, 2) stable PKR/USD exchange rate, 3) Positive first quarterly review by IMF, 4) foreign investment in local debt securities, 5) anticipation of policy rate cut in 1H2020 & 6) current account surplus of USD70 million recorded in month of October.
Political uncertainty as always remained a key concern during the quarter. Departure of ex-prime minister Nawaz Sharif to London, conditional extension to COAS for 6 months by supreme court and decision of death penalty to ex president Musharraf by special court were the main highlights.
KARACHI: State Bank of Pakistan (SBP) has directed financial institutions to ensure biometric verification of branchless banking customers by March 31, 2020.
In a circular issued on Tuesday directed all banks and microfinance banks to complete biometric verification of all level-1 accounts by March 31, 2020. In case biometric verification is not performed, the financial institutions shall convert all these accounts to Level – 0 with effect from April 01, 2020.
The transaction limits for Level – 1 accounts are as follow:
a. Rs. 50,000 per day [This limit shall not be applicable on: (i)credit from employers for salaried persons against proof of employment and (ii) payment to trusted merchants including schools and hospitals etc.]
b. Rs. 200,000 per month
The transaction limits for Level-0 accounts are as follow:
a. Rs. 25,000 per day
b. Rs. 50,000 per month
c. Rs. 200,000 per year
d. Rs. 200,000/- maximum balance limit
The financial institutions operating branchless banking are required to follow regulations related to Know Your Customer (KYC)/Account Opening requirements and conditions:
For Level-0 accounts:
a) Verification of customer identity from NADRA
b) Pre-screening the name and CNIC against proscribed/designated persons and entities as per the Statutory Notifications issued by Federal Government from time to time.
c) Call Back Confirmation or generation of One-Time Password (OTP) for verification in remote account opening.
For Level-1 accounts:
a) Biometric Verification of customer from NADRA
b) Pre-screening the name and CNIC against proscribed/designated persons and entities as per the Statutory Notifications issued by Federal Government from time to time.
c) Call Back Confirmation or generation of One-Time Password (OTP) for verification in remote account opening.
The SBP said that financial institutions shall keep all necessary record obtained through CDD measures, account files and business correspondence and results of any analysis undertaken, for at least ten years following the termination of the business relationship.
The central bank further said that the financial institutions shall ensure that documents, data or information collected under the CDD process is kept up to date and relevant, by undertaking reviews of existing records.
KARACHI: State Bank of Pakistan (SBP) on Tuesday updated guidelines for banks related compliance on notification issued under United Nations Security Council (UNSC) Resolutions.
The SBP issued circular addressing chief executives and presidents of banks, development financial institutions and microfinance banks, referring to the guidelines on Compliance of Government of Pakistan’s Notifications issued under United Nations Security Council (UNSC) Resolutions, issued vide BPRD Circular No. 03 of 2015 as amended from time to time.
The SBP said that in order to further enhance the understanding of Targeted Financial Sanctions regimes for Terrorism Financing and Proliferation Financing, under UNSC Resolutions, and to further align said regimes with the requirements embodied in FATF Recommendations, SBP has decided to update the subject guidelines.
KARACHI: The stock market fell by 153 points on Tuesday as the last day of 2019 while trading in narrow range during the day.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,735 points as against 40,888 points showing a decline of 153 points.
Analysts at Arif Habib Limited said that the market traded in a narrow range throughout the session with index swinging +110 points to -199 points.
Similar to yesterday, market maintained a slow pace with continued selling pressure in Banks and Oil chain. Cement sector also faced selling.
Overall, the benchmark index returned 10 percent over the year and managed to close the year above 40,000 level. Power sector led the volumes with 22.5 million shares, followed by Vanaspati (21.5 million) and Banks (19.3 million).
Among scrips, UNITY registered trading volume of 21.5 million, followed by KEL (13.8 million) and FFL (10.2 million).
Sectors contributing to the performance include Banks (-17 points), E&P (-32 points), Inv Banks (-19 points), Autos (-11 points), Power (+17 points), Technology (+10 points).
Volumes increased from 165.8 million shares to 177.1 million shares (+7 percent DoD). Average traded value also increased by 7 percent to reach US$ 45.7 million as against US$ 42.8 million.
Stocks that contributed significantly to the volumes include UNITY, KEL, FFL, SILK and HASCOL, which formed 34 percent of total volumes.
Stocks that contributed positively include FFC (+34 points), KAPCO (+7 points), HUBC (+7 points), INIL (+7 points) and SHEL (+6 points). Stocks that contributed negatively include ENGRO (-44 points), UBL (-36 points), HBL (-32 points), DAWH (-19 points), and PPL (-17 points).
KARACHI: The Pak Rupee gained seven paisas against dollar on Tuesday to close the year 2019. The local currency appreciated despite demand for import and corporate payments, dealers said.
The rupee ended Rs154.85 to the dollar from previous day’s closing of Rs154.92 in interbank foreign exchange market.
Currency dealers said that the rupee witnessed pressure during the day due to demand for import and corporate payments.
However, inflows and positive economic indicators helped the rupee to close the year with gain.
The foreign currency market was initiated in the range of Rs154.90/Rs154.95. The market recorded day high of Rs154.92 and low of Rs154.85 and closed at Rs154.85.
The exchange rate in open market witnessed no change in the local currency. The buying and selling of the dollar was recorded at Rs154.70/Rs155.00, the same previous day’s level, in cash ready market.
KARACHI: State Bank of Pakistan (SBP) on Tuesday issued orders to microfinance banks (MFBs) to ensure verification of customers in order to mitigate various risks arising from money laundering and financing terrorism.
A circular issued by the central bank referred it previous instructions issued through Circular No. 02 dated October 05, 2018 to mitigate various risks arising from money laundering and financing of terrorism.
As stipulated under Regulation M-1, ongoing Customer Due Diligence (CDD) is an essential aspect of effective KYC/CDD procedures and applies to all customers to whom the MFB is offering any type of service(s).
Accordingly, it is reiterated that MFBs must ensure strict observance of all applicable instructions including identification and verification of customers and their beneficial owner(s) and obtain information on the purpose and intended nature of business relationship.
The monitoring mechanism in place at MFBs should be adequately resourced and strengthened to ensure that the transactions being conducted in the accounts are consistent with the MFB’s knowledge of their customer, business, risk profile and the source of funds.
With the objective to know the ultimate beneficial ownership of accounts/ transactions, the MFBs shall enhance their efforts to obtain relevant information and examine background and purpose of all complex, unusual large transactions and unusual patterns of transactions, which do not commensurate with customer profile or have no apparent economic or visible lawful purpose.
MFBs are also advised to refer to the SECP Circular No. 16 of 2018 dated August 29, 2018 (https://www.secp.gov.pk/laws/circulars/) through which the Commission has directed all companies to enhance their efforts to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. natural persons or individuals who ultimately own or control the company.
Therefore, MFBs may also seek such ultimate beneficial ownership information from their relevant customers during the CDD process.
Moreover, with the view to further strengthen the measures already in place and mitigate the money laundering and terrorist financing risks, MFBs are advised to immediately take following steps:
a) Ensure optimal utilization of biometric technology and carry out biometric verification of the existing customers (if already not done) as per following timelines and thresholds:
Priority
Category of Customers
Threshold
Timeline
High Priority
Listed /Public Limited Companies
Account turnover exceeding PKR 1,000 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
31st January, 2020
Private Limited Companies
Account turnover exceeding PKR 500 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
All customers except Public/Private Limited Companies
Account turnover exceeding PKR 250 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
Medium Priority
Listed /Public Limited Companies
Account turnover from PKR 500 million to PKR 1000 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
31st March, 2020
Private Limited Companies
Account turnover from PKR 250 million to PKR 500 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
All customers except Public/Private Limited Companies
Account turnover from PKR 100 million to PKR 250 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
Normal
All other accounts not covered in the above categories
30th June, 2020
Note
Biometric verification of persons authorized to open and operate the account of legal entities or legal arrangements shall be conducted.
In case of customers whose eligible identity documents are other than biometrically verifiable documents, re-validation/ verification of identity shall be done based on documents, data or information obtained from customer and/or from reliable and independent sources having regard to MFB’s own assessment of materiality and risk.
Submit compliance status in respect of biometric verification of their existing/legacy portfolio of customers within 15 days of aforesaid timelines.
Furthermore, MFBs are advised to adhere to the following instructions regarding biometric verification of existing customers presently outside Pakistan:
Type of Customer
Treatment
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 MFB 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 identity document.
• 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 MFB, 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 MFB 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 MFB 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 MFB may conduct fresh NADRA Verisys using the information provided by the customer.
The MFB 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 MFB. 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.
Moreover, MFBs may operate accounts on the basis of NADRA Verisys in genuine cases, in line with Frequently Asked Questions (FAQ No. 8, Annexure – I) on Use of Biometric Technology, provided MFBs are satisfied and proper reason/ proof is recorded/ retained by them.
For such cases in line with Para-7 above, in the absence of biometric verification, MFB 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 MFB 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.
KARACHI: Today i.e. December 31, 2019 is the last date for filing income tax returns for tax year 2019 and Federal Board of Revenue (FBR) may not able to reach 2.74 million returns of tax year 2018.
The income tax return filing for tax year 2018 has increase to a new record level of 2.74 million by December 29, 2019, as shown in the Active Taxpayers List (ATL) issued on December 30, 2019.
The FBR received 1.8 million tax returns for tax year 2019 by December 12, 2019 and it is apparently difficult for the revenue authorities to reach the record level in 18 days.
Tax experts said that the FBR had set a target of 3.5 million returns for tax year 2019. To achieve this number the FBR has to extend the return filing date.
The last date for filing of income tax return other than companies was September 30, 2019 since then the FBR granted four extensions to facilitate taxpayers.
All the taxpayers including companies to file their returns by mid-night December 31, 2019.
It is interesting to note that no tax body or business associations have asked the FBR to further extend the date beyond December 31, 2019.
The income tax return filing reached to a new record high of 2.74 million as people making compliance to avoid 100 percent additional tax on persons not appearing on Active Taxpayers List (ATL).
Sources in Federal Board of Revenue (FBR) attributed the record increase in return filing to the amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.
In the last budget 2019/2020 a new Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which persons not appearing on ATL would liable to pay 100 percent more withholding tax on certain transactions.
The ATL for tax year 2018 issued on March 01, 2019 in which 1.59 million names were appeared of those taxpayer, who filed their returns by due date.
However, later the FBR granted extension in date for filing returns due to introduction of a tax amnesty scheme.
The extension for filing income tax returns for tax year 2018 was granted up to August 09, 2019.
The return filing up to August 09, 2019 for tax year 2018 jumped up to 2.5 million from 1.59 million returns, which were part of the first ATL issued March 01, 2019.
The insertion of Tenth Schedule to Income Tax Ordinance, 2001 speed up the return filing by taxpayers in order to avoid higher tax rate on certain transactions.
Previously, people filing their annual income tax returns after due date were not allowed to appear on the ATL. However, another provision was added to the main statute under which persons by paying penalty can include their name to ATL.
KARACHI: In case a person unable to file annual return and wealth statement by due date the he/she has right to get extension in date on various grounds by furnishing an application to Commissioner Inland Revenue.
Section 119 of the Income Tax Ordinance, 2001 provided the procedure to get date extension in filing annual return and wealth statement.
Section 119: Extension of time for furnishing returns and other documents.
(1) A person required to furnish —
(a) a return of income under section 114 or 117;
(c) a statement required under sub-section (4) of section 115; or
(d) a wealth statement under section 116,
may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.
(2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, or statement to which the application relates.
(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, 3[ ] or 4[ ] statement to which the application relates by the due date because of —
(a) absence from Pakistan;
(b) sickness or other misadventure; or
(c) any other reasonable cause,
the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.
(4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:
Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.
(6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.
