Day: February 28, 2020

FBR receives 2.45 million returns for TY2019, no date extension

ISLAMABAD: Federal Board of Revenue (FBR) has received 2.45 million income tax returns for tax year 2019 till evening of February 28, 2020, which is the last date for filing the returns.

A statement issued on Friday, the FBR said that the last date for filing income tax returns would not be extended further. The new active taxpayers list (ATL) for tax year 2019 will be updated by mid-night February 29, 2020.

The FBR said that those persons who were on the ATL-2018 but not filed their returns for tax year 2019 would not get their names on the new ATL.

The FBR said that it had received 2.45 million income tax returns for tax year 2019, which was 45 percent higher when compared with 1.68 million on the same date of the last year.

The FBR said that around 2.34 million individuals including salaried and business filed their returns for tax year 2019. Association of Persons (AOPs) filed 62,403 returns and companies filed 40,988 returns.

February 28, 2020
Dr. Najeebullah posted as Commissioner LTU Karachi

ISLAMABAD: Federal Board of Revenue (FBR) on Friday transferred Dr. Najeebullah, an officer of Inland Revenue Service (BS-19) as Commissioner, Large Taxpayers Unit (LTU), Karachi.

The FBR notified transfers and postings of IRS officers of BS-19 and BS-20.

Following officers have been transferred and posted:

01. Dr. Najeebullah (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (Zone-IV) Large Taxpayers Unit, Karachi from the post of Additional Commissioner, (IR) Large Taxpayers Unit, Karachi.

02. Zubair Bilal (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Multan from the post of SA to Chairman, Federal Board of Revenue (Hq), Islamabad.

03. Yasir Ali (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Corporate Zone) Regional Tax Office, Multan from the post of Director, Directorate of Intelligence & Investigation (Inland Revenue), Multan.

04. Zulfiqar Ali Memon (Inland Revenue Service/BS-19) has been transferred and posted as SA to Chairman, Federal Board of Revenue (Hq), Islamabad from the post of Commissioner, (OPS) (Zone-IV) Large Taxpayers Unit, Karachi.

The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

February 28, 2020
Stock market ends down by 104 points amid IMF staff-level agreement

KARACHI: The stock market fell by 104 points on Friday amid reports of Pakistan and International Monetary Fund (IMF) reached on a staff-level agreement.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) Index closed at 37,984 points as against 38,087 points showing a decline of 104 points.

Analysts at Arif Habib Limited said that the market continued the path to recovery after melting yesterday and then later staging a comeback.

The index went up by 220 points and also saw -329 points, closing the session -104 points. Cement and Steel sectors remained the outperformers, with further price gains following yesterday’s performance. Banking sector scrips generally faced selling pressure with NBP bearing lower circuit, whereas BOP could post only nominal gain.

Continuous slide in international crude prices kept the E&P, OMCs and Refinery sector under pressure.

Cement sector topped the volumes with 48.3 million shares, followed by Banks (26.1 million) and O&GMCs (23.4 million). Among scrips, HASCOL realized 18.5 million shares, followed by MLCF (17.6 million) and UNITY (14 million).

Sectors contributing to the performance include E&P (-130 points), Banks (-90 points), Power (-32 points), O&GMCs (-16 points), Cement (+73 points), Fertilizer (+54 points), Pharma (+18 points).

Volumes increased from 147.9 million shares to 201.6 million shares (+36 percent DoD). Average traded value also increased by 23 percent to reach US$ 55.7 million as against US$ 45.1 million.

Stocks that contributed significantly to the volumes include HASCOL, MLCF, UNITY, BOP and DGKC, which formed 36 percent of total volumes.

Stocks that contributed positively include ENGRO (+39 points), LUCK (+34 points), MEBL (+29 points), FFC (+18 points) and SEARL (+17 points). Stocks that contributed negatively include HBL (-46 points), PPL (-45 points), OGDC (-41 points), MCB (-35 points), and POL (-31 points).

February 28, 2020
Rupee ends down by two paisas against dollar

KARACHI: The Pak Rupee eased by two paisas against dollar on Friday in range bound trading activities, dealers said.

The rupee closed at Rs154.23 to the dollar from previous day’s closing of Rs154.21 in interbank foreign exchange market.

The currency dealers said that the market was remained dull during the day owing to lackluster demand from importers and corporate buyers.

However, slight demand was seen due to the last week day, they added.

The foreign currency market was initiated in the range of Rs154.21 and Rs154.24. The market recorded day high of Rs154.24 and low of Rs154.19 and closed at Rs154.23.

The exchange rate in open market witnessed depreciation in rupee value. The buying and selling of the dollar was recorded at Rs154.10/Rs154.40 from previous day’s closing of Rs154.00/Rs154.30 in interbank foreign exchange market.

February 28, 2020
Sectoral analysis shows massive decline in sales tax from OMCs

ISLAMABAD: Federal Board of Revenue (FBR) has conducted sectoral analysis to identify reasons behind shortfall in revenue collection. The analysis showed massive decline in sales tax from Oil Market Companies (OMCs) during July – January 2019/2020.

According to official documents, the collection of sales tax from OMCs was at Rs13.56 billion during first seven months of current fiscal year as compared with Rs18.94 billion in the corresponding period of the last year, showing 28 percent decline.

The fall in sales tax collection from OMCs is much higher than the decline in domestic sales of the oil market companies. The domestic oil sales fell by 10 percent to 10.14 million tons during the period under review as compared with 11.3 million tons in the same period of the last fiscal year.

The analysis also revealed that the collection of sales tax from iron and steel products declined by 29 percent to Rs4.93 billion as compared with Rs6.92 billion in the same period of the last fiscal year.

Similarly, the collection of sales tax from sales of motor cars fell by 43 percent to Rs2.22 billion during first seven months of the current fiscal year as compared with Rs3.86 billion in the corresponding period of the last fiscal year.

Reportedly, the FBR is facing huge shortfall in revenue collection to achieve current fiscal year revenue target. The FBR was assigned Rs5.55 trillion target at the start of current fiscal year. However, this target was revised downwards to Rs5.238 trillion.

The FBR provisionally collected Rs2,400 billion during first seven months of current fiscal year as compared with Rs2,067 billion in the same period of the last fiscal year.

The revenue authority is required another Rs2,828 billion in remaining five months to achieve the collection target.

The FBR conducted analysis of 11 sectors, which included: OMCs, Iron and Steel Products; natural gas; auto parts; motor cars; motor cycles; tea; ceramic tiles; pickle in oil; printing industries; and storage batteries.

All the above sectors have shown decline in sales tax during the period under review.

February 28, 2020
FBR to initiate action against non-filers after date expiry

KARACHI: Federal Board of Revenue (FBR) to initiate proceedings against persons failed to file income tax returns for tax year 2019 after expiry of return filing date i.e. February 28, 2020.

Sources in Federal Board of Revenue (FBR) on Thursday said that FBR unlikely to further extend the return filing date. The return filing date for tax year 2019 is expiring today i.e. Friday, February 28, 2020.

The sources said that tax authorities would identify persons who had filed their income tax returns for tax year 2018 but failed to file their returns for tax year 2019 despite grant of several extensions.

They said that the FBR would enforce returns and initiate legal proceedings against non-compliant taxpayers.

The last date for filing annual returns was September 30, 2019 for salaried persons, business individuals and Association of Persons (AOPs). While the last date for filing income tax returns for corporate entities was December 31, 2019.

The FBR while considering difficulties faced by taxpayers granted several extensions for filing tax returns and last was granted up to February 28, 2020.

The sources said that those persons who failed to file their returns would face penalty as prescribed under the Income Tax Ordinance, 2001.

Under Section 114 of Income Tax Ordinance, 2001 following persons/companies are required to file annual returns:

(a) every company;

(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

(ac) any non-profit organization as defined in clause (36) of section 2;

(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

(i) has been charged to tax in respect of any of the two preceding tax years;

(ii) claims a loss carried forward under this Ordinance for a tax year;

(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

(v) owns a flat having covered area of two thousand square feet or more located in a rating area;

(vi) owns a motor vehicle having engine capacity above 1000 CC;

(vii) has obtained National Tax Number; or

(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

(x) every resident person being an individual required to file foreign income and assets statement under section 116A.

(1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

February 28, 2020
KTBA suggests automatic stay against recovery on 10% tax payment

KARACHI: Karachi Tax Bar Association (KTBA) has suggested an automatic stay should be granted where a taxpayer paid 10 percent of the defaulted amount.

The stay should be granted till the decision by the Commissioner Inland Revenue (Appeals), the KTBA said in a letter sent to Member Inland Revenue (Policy) on Thursday.

The tax bar through the letter submitted its observations on the draft rules recently notified by the FBR related to third party recovery.

Through the draft rules, it is proposed that recovery may not be made where the taxpayer has voluntarily paid 10 percent of the tax demand until the decision of the appeal filed with the commission inland revenue (appeals).

“The condition to consider only voluntary payments, while issuing recovery notice, is contrary to the proviso to section 140(1) of Income Tax Ordinance, 2001 where the term ‘tax paid’ has been used which invariably includes any recoveries made by the department as well.”

It is therefore, suggested that where partial recovery up to 10 percent of the tax demand has already been made, the taxpayer should be entitled to automatic stay against any further recovery till the decision by the Commissioner Inland Revenue (Appeals), the KTBA said.

The KTBA observed that notice of recovery issued under Section 140 has to be complied with immediately. Meanwhile, Rule 210D proposes for dispute resolution relating to execution, discharge or satisfaction of a recovery notice.

A combined reading of the provisions suggests that the recovery could be affected before institution of any dispute with the Commissioner Inland Revenue.

“A minimum three working days time may be allowed for payment of the outstanding demand (after due date of service of recovery notice) to enable the defaulter to raise any genuine concerns arising from execution, discharge or satisfaction of such a notice.”

February 28, 2020