Pkrevenue.com

Month: February 2020

  • Sectoral analysis shows massive decline in sales tax from OMCs

    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.

  • FBR to initiate action against non-filers after date expiry

    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.

  • KTBA suggests automatic stay against recovery on 10% tax payment

    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.”

  • FBR issues precautionary measures against coronavirus

    FBR issues precautionary measures against coronavirus

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued precautionary measures for tax officials to protect themselves against coronavirus and educate taxpayers and general public for prevention.

    The FBR said that with the recent outbreak of coronavirus (COVID-19) in China, its subsequent spread across the globe and education of two confirmed cases in Pakistan, it is imperative that in line with the direction of the federal government, all officers and staff of FBR be educated on the cases, symptoms and prevention measures to protect themselves as well as to educate the taxpayers and general population about the same.

    A compendium of causes, symptoms and prevention; complied from research of World Health Organization, the Center of Disease Control and Prevention (CDC-USA) and Ministry of National Health Service, Islamabad is summarized as under:

    Causes: The coronavirus spreads primarily from person to person contact. CDC-USA attributes it to close contact (6 feet or less) with a person already infected. Prime cause of infection is through the airborne (water) droplets during sneezing and coughing of an already infected person.

    Touching an area where an infected person has sneezed or coughed may also be avoided. Furthermore, it may spread from consuming uncooked or undercooked animal organ meat.

    Summarized, Coronavirus spreads in similar way to flu. Persons at a higher age bracket and persons with weak/weakened immune system are at most risk.

    Symptoms: The Coronavirus may manifest symptoms within 2 to 14 days after being contracted. As such, a non-symptomatic person may also be carrying the virus. Common symptoms include combination of: fever, cough and shortness of breath/breathing difficulties.

    Most persons infected with Coronavirus experience only mild symptoms and recover. However, in more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.

    Prevention: As a matter of general day to day precautions, measures should be taken, included: use of face masks on mouth and nose; Use of alcohol-based hand sanitizers; avoiding close contact with any person showing symptoms of Coronavirus; covering mouth and nose with hand or elbow while sneezing or coughing; washing of hands with soap for at least 20 seconds; and ensuring that meat is thoroughly cooked.

    It is recommended to try and avoid close personal contact with people with a recent travel history from the countries, included: China, South Korea, Italy, Japan and Iran.

    Testing: The ministry of national health services, Islamabad has procured testing kits for Coronavirus and provided the same to various laboratories across Pakistan. Following places are recommended for testing of Coronavirus:

    National Institute of Health, Islamabad (free of cost)

    Shaukat Khanum Labs (Across Pakistan)

    Agha Khan Labs (Across Pakistan)

    Dow University of Health Sciences, Karachi.

    General instructions to Heads of field formations:

    Foregoing in view, heads of all field formations are requested to ensure:

    Display of precautionary measures including the causes, symptoms and prevention for Coronavirus at conspicuous places;

    Placement of alcohol-bases hand sanitizers at all places of public interaction, both for FBR employees and general public;

    Wearing of facemasks at all places of public interaction;

    Use of disinfectants to wipe surfaces (Desks, tables and counters etc.) and objects (telephones and keyboards etc.) of common use on daily basis.

    Reference to travel advisory before proceeding abroad on official work;

    Politely discourage personal greetings in form of hugs and handshakes

    Discontinuation of biometric attendance till culmination of Coronavirus threat.

  • IR offices to observe extended working hours on Feb 28 for revenue collection

    IR offices to observe extended working hours on Feb 28 for revenue collection

    KARACHI: The offices of Inland Revenue will observe extended working hours on Friday, February 28, 2020 to facilitate taxpayers in payment of due taxes and filing of tax returns.

    The Federal Board of Revenue (FBR) in an office orders issued to Large Taxpayers Units (LTUs) Corporate Regional Tax Offices (CRTOs) and RTOs, directed to observe extended working hours till 10:00PM on Friday February 28, 2020 to facilitate the taxpayers in payment of duties and taxes and filing of Income Tax Returns / Statements.

    The chief commissioners have been directed to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on February 28, 2020 to the respective branches of SBP on the same date so as to account for the same towards the collection for the month of February 2020.

    The SBP also issued instructions that NBP branches as well as field offices of the SBP Banking Services Corporation, shall observe extended banking hours up to 8:00PM on February 28, 2020.

    The NBP branches will settle their transactions on same day i.e. February 28, 2020 with respective SBP BSC offices for which purpose a special clearing will be arranged at 5:00PM by the NIFT on February 28, 2020.

    The NBP shall settle their transactions with SBP BSC field offices/head office latest by 10:00PM on February 28, 2020.

    The SBP further said that in order to eliminate the issue of spillover receipts, NBP shall ensure that no instrument containing receipts of the government, shall unattended at any NBP branch and shall be settled in the value date of February 28, 2020 through special clearing.

  • IMF board to decide $450 million disbursement to Pakistan in April

    IMF board to decide $450 million disbursement to Pakistan in April

    KARACHI: The Executive Board of the International Monetary Fund (IMF) will decide disbursement of $450 million in early April 2020, a statement said on Thursday.

    The IMF issued the press release stating:

    “Following discussions between International Monetary Fund (IMF) staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and reforms needed to complete the second review of the authorities reform program supported under the EFF.

    “The agreement is subject to approval by the IMF management and consideration by the Executive Board, which is expected in early April. Completion of the review will enable disbursement of SDR 328 million (around US$450 million).”

    Earlier on February 14, 2020, the IMF issued the following press release:

    “An International Monetary Fund (IMF) mission, led by Ernesto Ramirez Rigo, visited Islamabad during February 3-13, to initiate discussions on the second review of the authorities’ economic reform program supported under the Extended Fund Facility (EFF) arrangement.

    “At the conclusion of the visit, Mr. Ramirez Rigo made the following statement:

    “The IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies. The mission and the authorities made significant progress in the discussions on policies and reforms. In the coming days progress will continue to pave the way for the IMF Executive Board’s consideration of the review.

    “The macroeconomic outlook remains broadly as expected at the time of the first review. Economic activity has stabilized and remains on the path of gradual recovery. The current account deficit has declined, helped by the real exchange rate that is now broadly in line with fundamentals, while international reserves continue to rebuild at a pace considerably faster than anticipated. Inflation should start to see a declining trend as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary. Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated.”

  • Stock market makes recovery after massive intra-day fall

    Stock market makes recovery after massive intra-day fall

    KARACHI: The stock market ended by a decline of 251 points on Thursday after making recovery from significant fall earlier in the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 38,087 points as against 38,338 points showing a decline of 251 points.

    Analysts at Arif Habib Limited said that the market made a strong comeback after losing 1420 points earlier in the session.

    The recovery extended into MoC and closed the session -251 points. Concerns relating to Coronoa were on investors’ minds that caused the selling pressure, which was also aggravated by Moody’s report on banking sector, relaying negativity on the banking sector.

    Recovery however, also came in banking sector, followed by Cement which has recently been showing decent progress in terms of dispatches. Cement sector led the volumes with 39.4 million shares, followed by Vanaspati (29.1 million) and O&GMCs (28.8 million).

    Among scrips, UNITY topped with 29.1 million shares, followed by HASCOL (17.5 million) and MLCF (15.1 million).

    Sectors contributing to the performance include E&P (-131 points), O&GMCs (-50 points), Food (-42 points), Autos (-25 points), Insurance (-25 points), Banks (+61 points) and Cement (-27 points).

    Volumes increased from 147.9 million shares to 248.9 million shares (+68 percent DoD). Average traded value also increased by 44 percent to reach US$ 64.7mn as against US$ 45.1 million.

    Stocks that contributed significantly to the volumes include UNITY, HASCOL, MLCF, BOP and TRG, which formed 35 percent of total volumes.

    Stocks that contributed positively include UBL (+62 points), HBL (+30 points), MCB (+21 points), LUCK (+16 points) and ENGRO (+16 points).

    Stocks that contributed negatively include PPL (-55 points), OGDC (-46 points), POL (-31 points), BAHL (-25 points), and NESTLE (-24 points).

  • Pakistan’s foreign exchange reserves flat at $18.743 billion

    Pakistan’s foreign exchange reserves flat at $18.743 billion

    KARACHI: Pakistan’s liquid foreign exchange reserves were flat at $18.743 billion by week ended February 21, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $18.747 billion by week ended on February 14, 2020.

    The official reserves of the central bank increased by $87 million to $12.592 billion by week ended February 21, 2020 as compared with $12.505 billion a week ago.

    However, reserves held by commercial banks fell by $91 million to $6.151 billion by week ended February 21, 2020 as compared with $6.242 billion a week ago.

  • Rupee gains four paisas on lower import payment demand

    Rupee gains four paisas on lower import payment demand

    KARACHI: The Pak Rupee gained four paisas against dollar on Thursday owing to lower demand for import and corporate payments.

    The rupee ended Rs154.21 to the dollar from previous day’s closing of Rs154.25 in interbank foreign exchange market.

    Currency dealers said that due to fears of coronavirus and stuck up import consignments at the ports discouraged importers to buy the foreign currency.

    Reportedly, huge number of consignments of China origin was stuck up at ports due to formalities attached to coronavirus threat.

    The exchange rate in open market witnessed appreciation in rupee value. The buying and selling of the dollar recorded at Rs154.00/Rs154.30 as compared with previous day’s closing of Rs154.10/Rs154.40 in cash ready market.

  • FBR allows sales tax return filing up to February 28

    FBR allows sales tax return filing up to February 28

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed taxpayers to file their monthly sales tax and federal excise returns up to February 28, 2020.

    The FBR on Thursday issued a notification for extension in date of submission of sales tax and federal excise return for the tax period of January 2020.

    The notification said that the FBR further extended the date of submission of sales tax and federal excise return up to February 28, 2020 for the tax period of January 2020, which was due on February 18 and was extended up to February 26, 2020.