The Pakistani Rupee (PKR) strengthened against the US Dollar on Friday, gaining 13 paisas, buoyed by improved inflows of remittances and reduced demand for import payments. The rupee closed at PKR 156.83 to the dollar, compared to the previous day’s closing rate of PKR 156.96 in the interbank foreign exchange market.
(more…)Year: 2019
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NCCPL to collect capital gain tax on disposal of securities on June 28
KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Friday announced that it will collect Capital Gain Tax (CGT) on disposal of securities for the month of May on June 28, 2019.
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Owners of undeclared 13,193 luxury vehicles warned of harsh punishment
KARACHI: Federal Board of Revenue (FBR) has warned the owners of luxury motor vehicles of harsh punishment in case they are remained non compliant and failed to declare these vehicles under Asset Declaration Scheme.
In this regard the Regional Tax Office (RTO)-II Karachi has obtained details of 13,193 luxury vehicles from Excise and Taxation department Sindh.
The owners of such vehicles have been living luxurious life without paying due taxes. The break up is under: Hilux/Vigo 9230; Land Cruisers 1605; Prado 1970; Audi 45; Mercedes Benz 272; and BMW 71.
The owners have been informed by the RTO-II regarding the opportunity provided by Assets Declaration Ordinance 2019 to disclose such vehicles and other undeclared or Benami Assets by the June , 2019 to avoid confiscation and imprisonment up to seven years.
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Untaxed money, assets will find no hiding: CCIR RTO-II
KARACHI: People will find no place to conceal their untaxed money from next month as Federal Board of Revenue (FBR) planned a comprehensive plan to bring all taxable income into tax net, Badaruddin Ahmad Qureshi, Chief Commissioner Inland Revenue (CCIR), Regional Tax Office (RTO)-II, Karachi at a press conference on Thursday.
He said that FBR had gathered information of people having taxable income through various sources including transactions of immovable properties, motor vehicle registrations, banking transactions, air travel, education fee etc.
He further said that the information of Pakistanis, having offshore investments on which tax was not paid, had also received.
Further, the Benami law, which was passed by the Parliament in 2017 and the FBR issued rules in February 2019, is also in vogue.
So in this scenario a person will not able to hide his illegal money or assets in future, the chief commissioner added.
Qureshi said that the present Asset Declaration Scheme was introduced in this background as the government wanted to give last chance to people having illegal money and assets to declare at nominal tax rates before launching stern action.
The CCIR said that the declaration scheme would end by June 30 and there would be no further extension.
“This is the last chance. People should avail this opportunity. The FBR will launch drive against tax evaders from July 01,” he added.
He said that the RTO-II Karachi had also collected information from various sources and one of those were details of luxury motor vehicles.
“There are 13,000 motor vehicles of 2400CC engine capacity in the city and their owners are not on the tax roll,” the chief commissioner said, adding that those persons would be served notices from July 01, 2019 and tax authorities would compel them to file their return and pay duty and taxes besides declaring their assets.
To a question about the progress of amnesty scheme, he said that the response was slow but historically people avail opportunity on the last dates, he said and hoped large number of declaration would be received.
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Foreign exchange reserves decline to $14.64 billion
KARACHI: The foreign exchange reserves of the country have declined by $188 million to $14.639 billion by week ended June 14, 2019 as compared with $14.826 billion by June 03, 2019, State Bank of Pakistan (SBP) said on Thursday.
The official reserves of the central bank declined by $203 million to $7.604 billion by week ended June 14, 2019 as compared with $7.807 billion as of June 03, 2019.
The SBP said that the official reserves had been declined due to external debt servicing and other official payments.
The foreign exchange reserves held by commercial banks increased by $15 million to $7.034 billion as compared with previous level of $7.02 billion.
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Prime Minister assures business community of considering sales tax zero rating
KARACHI: Prime Minister Imran Khan has assured business community of considering restoration of sales tax zero rating for export sector.
A delegation of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) met Prime Minister Imran Khan on Thursday in Islamabad to discuss anomalies in the Finance Bill 2019.
On FPCCI demand of restoration of SRO 1125(I)/2011 allowing five export oriented export sectors at zero rate, the prime minister assured to consider it sympathetically, said a statement issued by the FPCCI.
The FPCCI delegation was led by S.M. Muneer, leader of the business community and Former Chief Executive TDAP and Former President, FPCCI and consisting of Aqil Karim Dhedi; Engr. Daroo Khan Achakzai, President, FPCCI and Zubair F. Tufail, Convener of the FPCCI Budget Advisory Council – held a detailed meeting with the Prime Minister Imran Khan and Abdul Hafeez Shaikh, Advisor to the PM on Finance which lasted for 2 hours and discussed / briefed them about the hardships of the business community emanated from some harsh measures of the Finance Bill, 2019 that would give serious blow to trade and industry, especially export sector in the wake of exorbitant policy rate of 12.25 percent coupled with the massive devaluation of Pak-Rupee versus dollar in the last few months withdrawal of zero rated regime from export industrial sectors etc.
The FPCCI delegation particularly emphasized and discussed ten major demands out of which eight proposals have been accepted by the Prime Minister, the major one such as doing away with raid on any premises; reduction in tax rates for service sector; routing taxation and business related policy through Federal Government/Cabinet instead of FBR, as directed by the Supreme Court; lack of personal interaction and minimal possibility of abuse of discretionary powers by the tax officials; conduction of audit once in a three years etc.
Moreover the issues of retailers, wholesalers and real estates were also discussed in details.
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KSE-100 gains 340 points on improved sentiments
KARACHI: The stock market gained 340 points on Thursday on improved sentiments.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,996 points as against 34,656 points showing an increase of 340 points.
Analysts at Arif Habib Limited said that market moved up today after sustaining losses for the past three sessions. E&P sector took cue from rising crude prices and were further helped by Iran’s taking down of US drone.
Besides the positivity in E&P sector, Cement stocks also increased on the back of recent price hikes in cement price / bag. Total volumes hit around 163 million shares, however, most of it came from Summit Bank (19 million), WTL (17 million), JSCL (10 million) and PAEL (10 million).
Technology sector led the volumes table with 29 million shares, followed by Banks (24 million) and Cement (22 million).
Sectors contributing to the performance include Fertilizer (+69 points), Banks (+62 points), E&P (+44 points), Cement (+44 points) and Autos (+25 points).
Volumes increased significantly from 99.4 million shares to 163 million shares (+64 percent DoD). Average traded value also increased by 31 percent to reach US$ 28.8 million as against US$ 21.9 million.
Stocks that contributed significantly to the volumes include SMBL, WTL, JSCL, PAEL and MLCF, which formed 41 percent of total volumes.
Stocks that contributed positively include FFC (+21 points), EFERT (+21 points), ENGRO (+20 points), POL (+20 points) and HUBC (+19 points). Stocks that contributed negatively include NESTLE (-14 points), PAKT (-11 points), NCPL (-3 points), JLICL (-2 points) and KAPCO (-2 points).
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Rupee ends flat against dollar
KARACHI: The Pakistani Rupee held steady against the US Dollar on Thursday, closing at Rs156.96 in the interbank foreign exchange market, a marginal change from the previous day’s close of Rs156.97.
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FBR outlines action in post July 01 scenario; urges people to avail asset declaration scheme
ISLAMABAD: Federal Board of Revenue (FBR) has outlined course of action in scenario of post July 01, 2019 and some of motives are visible in the Finance Bill 2019.
In a statement issued on Thursday, the FBR said that the primary objective of the government is to improve confidence/trust level between the taxpayer and the tax department.
For that purpose some steps have already been undertaken which have been duly appreciated by the taxpayers.
“However, major corrective actions will be taken from July 1, 2019. Tone and purpose (for the same) have been identified in the Finance Bill 2019 and others will be disseminated in the procedures, circulars and the administrative reforms which will be made in the Federal Board of Revenue post-July 1, 2019.”
The primary theme of these actions is:
a) Automation of business process
b) Lack of personal interaction
c) Minimal possibility of abuse of powers and discretion by the tax authority
In this process the first step being ‘Return Filing’ and the ‘Sales Tax Registration’, being automated without any personal intervention/interaction.
The FBR said that in the Finance Bill, 2019 it has been ensured that the functions of ‘Audit’ which should an exception on risk-based criterion, and not a norm, shall be undertaken by a person different from the persons involved in enforcement.
Accordingly, the process of audit and enforcement will be segregated in due course. This is a major redressal, the FBR said.
Furthermore detailed explanatory circulars will be issued that there should not be any possibility of abuse of section 122(5A) of the Income Tax Ordinance, 2001 and any other similar provisions in the relevant statutes.
“It is also being ensured that first appeal stage be completely divorced from enforcement function.”
Furthermore, the government is fully committed to ensure the concept of ‘Self Assessment Procedure’ in the true spirit and relevant steps are being undertaken to ensure that there is no possibility of harassment of the taxpayers.
It is reiterated that the primary objective of the government is to create the confidence/trust amongst the honorable taxpayers. “It will be ensured that same actions materialize and concrete visible results are apparent. “
On the other side, in the past tax efforts of the tax department were concentrated on the ‘Information Furnished’ by the taxpayers and there was not sufficient/independent ‘Data/Information’ of the economic transactions undertaken available with the government.
The Government is concentrating its efforts to gather relevant information and is trying to further accelerate the process of gathering the data / information of the economic transactions including those being transactions in banking channels, electricity and gas connections, land records and other consumption data relating to expenses on travel, children education etc. as recorded in NADRA etc. and any other possible means in accordance with the international best practices.
In these circumstances it will be difficult, rather impossible, for any person to undertake the economic transactions which remains outside the purview of fiscal/financial system of the country.
“In these circumstance it is reiterated that any mis-apprehension about the manner of the operations of FBR in post July 1, 2019 and the availability of data with the government be dispelled with,” the FBR said.
The FBR said that the Assets Declaration Scheme 2019 which is simple to be availed in order to live in a peaceful, comfortable, and a civilized manner for the betterment of Pakistan. It is considered that the context of the aforesaid paragraphs will be considered with respect to the decision for declaration under the Scheme to be made by June 30, 2019.
The Assets Declaration Scheme 2019 will expire on June 30, 2019. It is reiterated that all persons having un-disclosed and un-declared assets and un-disclosed expenditure are strongly advised to avail the scheme.
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SBP issues procedure for repatriation of foreign shares of Pakistan companies under asset declaration scheme
KARACHI: State Bank of Pakistan (SBP) on Thursday issued procedure for repatriation of foreign assets held in the form of shares of a company incorporated in Pakistan, under Asset Declaration (Procedure & Conditions) Rules, 2019.
The central bank said that in terms of Sub-Rule 6 of Rule 4 of the Assets Declaration (Procedure and Conditions) Rules 2019, issued by Federal Board of Revenue (FBR) vide S.R.O. 578(I)/2019 dated May 25, 2019, where foreign assets are shares of a company incorporated in Pakistan held by a declarant, whether beneficially or otherwise, it may be declared, in terms of Assets Declaration Ordinance 2019, subject to their repatriation into Pakistan and conversion into non-repatriable basis.
In order to facilitate the declaration of shares of a company incorporated in Pakistan, under clause 4(6) of the above mentioned Rules, held by the declarant, whether beneficially or otherwise, on repatriable basis, the SBP allowed these shares to be repatriated into Pakistan and also notify the following procedure for conversion of these shares from repatriable basis to non-repatriable basis and transfer in the name of the declarant:
Shares registered with SBP on repatriable basis:
i. The owner of shares (i.e. the person in whose name the shares are already registered with SBP) will submit its application, duly forwarded by the respective company (the company whose shares are held by the non-resident on repatriable basis) through the AD (bank), to SBP for cancellation of registration of shares.
ii. The application shall explicitly state that the shares are beneficially owned by the declarant (Name, Father Name, Residential Address, CNIC/Passport No.) who wants to declare them under the Assets Declaration Ordinance 2019.
iii. The application shall also state that the request has been made to the company/company registrar/Central Depository Company of Pakistan Limited (CDC), as the case may be, for transfer of these shares in the name of the declarant on non-repatriable basis after cancellation of the registration by SBP, with an advice to confirm SBP upon transfer of these shares.
iv. The application will be submitted along with following original documents:
A. Original shares registration letter(s), earlier issued by SBP on registration of shares of the company in favor of the applicant on repatriable basis.
B. A clear undertaking from the applicant that no repatriation of capital and profit/dividend accruing thereon will be claimed at any stage.
C. Letter from company secretary, confirming that:
a. Underlying shares (the shares whose registration is to be cancelled) are still held by the applicant.
b. Applicant has requested to the company/company registrar/CDC for transfer of the shares in the name of the declarant on non-repatriable basis after cancellation of the registration by SBP.
v. Upon receiving such request through AD, SBP will cancel the registration letter and inform the AD and the company along with an endorsement to FBR.
vi. Upon transfer of shares in the name of declarant, the company/company registrar or CDC, as the case may be, will confirm SBP that the shares have been transferred in the name of declarant on non-repatriable basis.
Shares acquired through Special Convertible Rupee Accounts (SCRA) under Para 9 of Chapter 20 of Foreign Exchange Manual:
i. The legal owner (i.e. Foreign Portfolio Investor in whose name the Unique Identification Number has been registered) of the shares shall approach the AD (SCRA maintaining bank) with the request on the format attached as Form-I, that the shares are beneficially owned by the declarant i.e. natural person(s) (Name, Father Name, Residential Address, CNIC /Passport No.) who wants to declare them under the Assets Declaration Ordinance 2019.
ii. The request shall also state to transfer the shares from the depository (CDC) account of legal owner to depository (CDC) account in the name of the declarant as a local/domestic shareholder (local securities account details will be provided) and delink the said holdings from SCRA in banks’ books. This will be applicable only to shares of Foreign Portfolio Investors, which are currently safe kept under the participant ID of the AD. The said transfer between the two accounts should be in accordance with the procedure prescribed by CDC for this purpose.
iii. The AD will issue a certificate to SBP on the format attached as Form-II, that shares have been transferred to the declarant CDC sub-account in line with the instruction received from the client, excluding it from SCRA regime with copy to CDC and FBR for their information and necessary action. CDC will also confirm that consequent upon the request of the legal owner, the shares have been transferred in the name of declarant on non-repatriable basis.
All procedural aspects in respect of above declaration including, but not limited to, (i) conversion of shares from repatriable basis to non-repatriable basis whether with CDC or otherwise and (ii) transfer and registration of shares from the name of present legal owner to the declarant shall be completed on or before June 30, 2019; and the declarant shall disclose the details of such shares, including name and number of such shares and their face value in his/her asset declaration under Assets Declaration Ordinance, 2019, the SBP said.