Pkrevenue.com

Year: 2019

  • Sindh unveils Rs1,217bn budget for 2019/2020

    Sindh unveils Rs1,217bn budget for 2019/2020

    KARACHI: The Sindh government on Friday unveiled Rs1,217 billion budget for fiscal year 2019/2020.

    Announcing the budget for next fiscal year, Syed Murad Ali Shah, Chief Minister, Sindh said that the total receipts of the province for the financial year 2019-20 are estimated at Rs1,217 billion against an estimated expenditure of Rs1,217 billion.

    He said that as Federal Transfers, the province is expected to receive Rs835.375 billion. Receipts from Federal Government will account for 74.3 percent of the total receipts. He said that the federal government has failed to achieve its target in yesteryears.

    “We have adapted the figures communicated to us by the Federal Government. We strongly apprehend that Federal Government will not be able achieve its target unless drastic structural changes are introduced,” he said.

    Failure to achieve its targets will create financial problems for the Provincial Government during the next financial year 2019-2020. Our own provincial receipts are growing steadily and provincial revenue targets are increased from Rs243.082 billion in 2018-2019 billion to Rs355.4 billion for financial year 2019-2020, the chief minister said.

    On the current revenue side, the expenditure budget is estimated at Rs.870.217 billion which shows an increase of 12.5 percent over the current year allocation of Rs.773.237 billion. This increase in expenditure is primarily in the employee related expenses which could not have been avoided.

    Similarly, the impact of increasing utilities has been absorbed. Our austerity policy shall continue during the next financial year. We have introduced major cuts in operating expenses. However, it would not be done at the cost of social sectors.

    The Development portfolio for next financial year is Rs.283.5 billion which includes Rs.228 billion on account of Provincial and District ADP.

    He said that the injustice meted out to Sindh in the Federal PSDP. He said that overall size of the federal PSDP was Rs.951.0 billion with Rs.127.0 billion of Foreign Project Assistance (FPA).

    “Out of above portfolio, Sindh specific schemes are 50 both ongoing and new with an allocation of Rs.33.7 billion.,” Shah said and added: “total schemes included in the Federal PSDP 2019-20; which are by the Government of Sindh are 12 having an allocation of Rs.4.89 billion as compared to Rs.15.0 billion in 2018-19 and Rs.27.3 billion in 2017-18.”

  • World Bank approves $518 million for Pakistan’s efforts to raise domestic revenue

    World Bank approves $518 million for Pakistan’s efforts to raise domestic revenue

    ISLAMABAD: The World Bank on Friday approved a package of $518 million for two projects in support of Pakistan’s ambitious efforts to raise revenue and reduce compliance cost with a goal of providing better services to the people.

    The $400 million Pakistan Raises Revenue Project will support the Federal Board of Revenue’s (FBR) focus to create a sustainable increase in Pakistan’s domestic tax revenue. The project will assist in simplifying the tax regime and strengthening tax and customs administration. It will also support the FBR with technology and digital infrastructure and technical skills. This will enable more effective use of taxpayer information and more targeted compliance. The Government has set improving tax revenue with low compliance costs as a high priority.

    “Revenue mobilization plays an essential role in Pakistan’s fiscal sustainability,” said Muhammad Waheed, Task Team Leader of the Project. “The project will target raising the tax-to-GDP ratio to 17 percent by financial year 2023-2024 and widening the tax net from the current 1.2 million to at least 3.5 million active taxpayers.”

    Pakistan’s revenue performance has improved significantly from tax policy measures in recent years, rising from 9.5 percent of GDP in financial year 2011-2012 to 12.9 percent in financial year 2017-2018. This is still lower than the level needed by developing countries, of at least 15 percent of GDP, to fund basic government functions and provide services to people.

    “Creating fiscal space through revenue mobilization is critical to reduce the country’s budget deficit, enabling people of Pakistan to benefit from better public investments and services,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

    The $118 million Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management Project will support the Government of Khyber Pakhtunkhwa to increase its capacity for revenue collection and the management of the province’s resources. The project is anchored in the provincial government’s Public Financial Management Strategy (2017-2020) and will strengthen the government’s Public Financial Management system.

    While the government of Khyber Pakhtunkhwa has made progress in revenue mobilization and management of public finances, its revenues remain low. Enhancing the tax revenue could increase its capacity to provide better services to residents. It will also reduce its dependence on federal transfers, which accounted for 86 percent of provincial revenue in the financial year 2016-2017.

    “Mobilizing domestic revenue is crucial to improving human development outcomes in Khyber Pakhtunkhwa,” said Raymond Muhula, Task Team Leader of the Project. “This project will support the government’s priority to increase its own source revenue and to better manage its resources.”

  • Dollar hits record high at Rs155.85 in interbank

    Dollar hits record high at Rs155.85 in interbank

    KARACHI: The dollar appreciated by Rs2.94 to make a new record high on Friday owing to weak economic indicators and high debt repayments during next two years.

    The rupee ended Rs155.85 to the dollar from previous day’s closing of Rs152.91 in interbank foreign exchange market.

    The interbank foreign exchange market initiate in the range of Rs153.50 and Rs153.75. The market recorded day high of Rs156.50 and low of Rs153.95 and closed at Rs155.85.

    Currency experts said that the statement of the adviser to the prime minister regarding interest payment earlier in the day against foreign loan pressurized the local currency.

    The exchange rate in open market also witnessed depreciation of the local currency.

    The buying and selling of the dollar was recorded at Rs156.00/Rs157.50 from previous day’s closing of Rs152.50/Rs153.50 in cash ready market.

  • Dollar hits new high at Rs153.71 in early trade

    Dollar hits new high at Rs153.71 in early trade

    KARACHI: The US Dollar appreciated to record high at Rs 153.71 in early trade on Friday owing to high demand for import.

    The dollar is being trade at Rs153.71 after witnessing 80 paisas in interbank foreign exchange market.

    The exchange rate was closed yesterday at Rs152.91 to the dollar in Interbank Foreign Exchange Market.

  • KTBA discusses impact of SRO 1125 withdrawal

    KTBA discusses impact of SRO 1125 withdrawal

    KARACHI: The tax practitioners have discussed impact of abolishing SRO 1125(I)/2011 under which sales tax zero rating was available for export sector.

    These were discussed at post budget seminar organized by Karachi Tax Bar Association (KTBA) in collaboration with Pakistan Tax Bar Association (PTBA) on Thursday.

    Adnan Mufti at Shekha & Mufti Chartered Accountants explained changes in indirect taxes in his presentation.

    He said zero rated and reduced rates tax regime for 5 export oriented sectors i.e. textile, leather, carpets, sports and surgical goods was introduced from 1st January 2012 vide SRO 1125. Thereafter 19 amendments were made from time to time in SRO 1125.

    He highlighted following impacts would emerge after abolishment of SRO 1125:

    a) Goods which were notified under SRO 1125 now would restored at standard rate of sales tax i.e. 17%.

    b) Supplies of finished articles of textile, textile made ups, leather and artificial leather made by retailers would be subject to sales tax @ 15% subject to integration with FBR online system where data is transmitted to the FBR’s computerized system in real time. Mode and manner to be prescribed by FBR.

    c) Zero rating on import of plant & machinery (not manufactured locally) by textile industry would be abolished and will be subject to sales tax @ 10%;

    d) Ginned cotton, one of the major raw material of textile sector, will become subject to sales tax @ 10% under Eight Schedule. It was previously zero rated under SRO 1125 for textile sectors and exempted under Sixth Schedule for others;

    e) Zero rating facility on “raw cotton” stands transposed with tax exemption under Sixth Schedule;

    f) Zero rating facility on furnace oil, diesel oil, coal, electricity and gas will be withdrawn.

    He explained in details about the overall changes brought in the indirect measures through Finance Bill 2019.

    The changes in tax structure will have inflationary impact on sugar, milk, soft drinks, garments, shoes, cooking oil, cement, etc. costlier than before. Customs Duty on more than 1,650 raw materials and industrial inputs reduced – paper industry to enjoy more benefits.

    He said that restoration of trust was much needed for a tax revenue target of Rs5555 billion.

    Practical measures for boosting exports, employment, protection of local industry missing. Imports of luxury items like chocolate, eatable, shaving razors, heavy cars, etc. should have been banned. Revenue hit for the initial short run should be absorbed for a long term sustainability.

    Machinery parts and accessories used in the textile sector will be free from CD; it’s a mismatch since zero rating for textiles has been abolished in sales tax.

    FED imposed on cars; mismatch vis.a.vis sugar, milk, cooking oil, etc.

    CD waived on 18 medicinal inputs as well as on medicines for certain rare diseases. We should expect cheaper medicines in the next fiscal year.

  • KPT issues Cyclone Vayu safety warning

    KPT issues Cyclone Vayu safety warning

    KARACHI: Karachi Port Trust (KPT) on Thursday issued safety warning for ships in the wake of depression created due to ‘Cyclone Vayu’.

    In an alert the KPT informed that the deep depression had developed 1500 nautical mile south of Karachi and more likely would be upgraded to cyclone within next 24 hours.

    “It is expected this will fall on land likely between Kandla (India) and Karachi on June 15 and June 16 with strong winds up to 45 knots and gusting up to 88 knots.”

    It is strongly suggested that all ships to double up the mooring arrangement for safety of ships and port structure.

  • FBR asks police to provide agreements of rented properties

    FBR asks police to provide agreements of rented properties

    KARACHI: Federal Board of Revenue (FBR) has issued notices to police stations to acquire information about rented residential and commercial properties located in Karachi.

    The notices have been sent to Station House Officers (SHOs) under Section 176 of the Income Tax Ordinance, 2001 to provide the information of rented houses and commercial premises.

    The FBR asked the SHOs to provide information of rented agreements including address of premises, rental agreement and type of properties such as commercial or residential, according to a copy of notice made available to PkRevenue.com.

    The notices have been sent by Broadening of Tax Base (BTB) Wing of Regional Tax Office (RTO)-II Karachi stating that in terms of Section 176 of the Income Tax Ordinance, 2001, the SHOs are required to furnish such information as may be required by the commissioner Inland Revenue or an authorized person relevant to any tax leviable under the Ordinance.

    It further said that as per Section 3 of the Sindh Information of Temporary Residents Act, 2015, the property dealer, landlord and tenant, shall, within 48 hours from the time of delivery of possession of the rented property premises to the tenant, provide information about the tenant to the policy through the fastest means of communication.

    The RTO-II asked police to provide required information by June 17, 2019. The tax office also warned of imposing penalty for non-compliance.

  • FBR warns of harsh action against undeclared assets from July 01

    FBR warns of harsh action against undeclared assets from July 01

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday warned people of harsh action for possessing undeclared assets from July 01, 2019.

    The revenue body said that those people having undeclared cash, assets and expenditures should declare by availing tax amnesty scheme.

    FBR reiterates that the closing date for Assets Declaration Scheme is 30th June, 2019.

    Therefore, it is advised to the persons intending to avail this scheme to ensure that the following reliable data relating to undeclared and undisclosed assets and expenditure is available with FBR:

    a) Data of industrial and commercial gas and electricity consumers from various DISCOs and gas distribution companies has been procured to identify the persons who are chargeable to tax but have not been paying their due taxes.

    b) That there is complete cooperation between the banks and the FBR on the availability of data relating to withholding taxes and other relevant information especially related to non-filers.

    c) That FBR in collaboration with NADRA is providing access to the concerned persons (confidentially) for the transactions undertaken in the past in order to let the people know the transactions undertaken by them. This data will be available through secure channels from NADRA on demand subject to certain fee.

    d) That it is planned that bearer certificates such as bearer prize bonds will be converted into registered prize bonds over a period of time as specified by the State Bank of Pakistan in coming months.

    e) FBR is in contact with the land record authorities and relevant District Collectors with regard to shops and establishments for identifying the business establishments within their respective areas.

    f) That administrative setup is being placed for operation of the Benami Law and it is expected to be fully operational from July 1, 2019.

    In the light of the aforesaid points, it is advised that the concessions and benefits laid down in the Scheme be availed.

    Furthermore in the Finance Bill 2019 it has been further reassured that no proceedings will be initiated against persons who declare their assets under the Assets Declaration Scheme and complete confidentiality shall be maintained with respect to assets declared in the scheme.

  • Foreign exchange reserves slip to $14.827 billion

    Foreign exchange reserves slip to $14.827 billion

    KARACHI: The total foreign exchange reserves of the country have slipped by $63 million to $14.827 billion by week ended June 03, 2019 as compared with $14.89 billion as on May 31, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The official foreign exchange reserves of the SBP reduced by $55 million to $7.807 billion by week ended June 03, 2019 as compared with $7.862 billion on May 31, 2019.

    The central bank said that its reserves were declined due to payments on account of external debt servicing.

    The reserves held by commercial banks also fell by $8 million to $7.019 billion from $7.027 billion.

  • Stock market gains 465 points on buying activities

    Stock market gains 465 points on buying activities

    Karachi: The Pakistan stock market recorded a significant gain of 465 points on Thursday, driven by robust buying activities and positive investor sentiment. The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 35,403 points, up from the previous close of 34,660 points.

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