Month: April 2020

  • SBP sets up direct helpline to facilitate banking consumers

    SBP sets up direct helpline to facilitate banking consumers

    KARACHI: State Bank of Pakistan (SBP) has facilitated consumers of banks by setting up direct helpline for quick disposal of complaints amid difficult situations due to coronavirus.

    In a statement issued on Monday, the central bank said it had taken additional measures to facilitate bank customers that are faced with extraordinary challenges arising out of COVID-19 situation in the country.

    They can now approach SBP through its helpline service in case their queries or complaints are not being responded by banks.

    The SBP also encourages public to use digital payment services as much as possible to help banks providing their services with minimal staff to ensure their safety.

    SBP has taken notice of phone calls to banks’ customers by fraudsters seeking personal information taking advantage of the current conditions. Following are the details of measures taken.

    To facilitate banking consumers, SBP has advised all banks to ensure that their call centers/helplines are available 24/7 for instant customer support.

    Banking consumers are encouraged to approach banks through helpline for queries or lodging complaints. In case complainants do not get an appropriate response from banks, they may approach SBP helpline at 021-111-727-273, which will remain available during office hours.

    To cater to the needs of the public for facilitation and guidance, SBP has enhanced its helpline capacity by deploying more agents at its call center.

    The general public is encouraged to take appropriate safety measures in the context of the coronavirus and use alternate delivery channels where possible.

    SBP recognizes that the employees of banks and other financial institutions are providing services amid the difficult working conditions arising due to COVID-19.

    For the protection of bank employees and customers, work place safety and to meet the operational challenges in serving the bank customers, banks have been advised to implement guidelines issued by World Health Organization, the Government of Pakistan and the Provincial Governments in letter and spirit.

    Nevertheless, bank employees and customers still facing difficulties or having concerns over arrangements may bring this to the notice of SBP.

    For this purpose, queries, concerns, complaints may be emailed to SBP at [email protected].

    SBP has time and again advised the general public through various channels of communication not to disclose or share any personal information about their bank accounts or credit/debit cards including CNIC number, debit or credit card number, passwords, PINs and one-time password (OTP), etc. on incoming phone calls or messages.

    It has been brought to the notice of SBP that fraudsters, imitating as officials of SBP, bank or any other government agency, have been attempting to seek personal information from the public on the pretext of verification of account due to emergency conditions under COVID-19 pandemic.

    It is reiterated that SBP, banks or any other agency are not collecting information from banking customers regarding their bank accounts or cards.

    The SBP never asks for any personal information directly from bank customers. The general public is, therefore, advised again not to disclose personal information on incoming calls.

    Details of any such call or message received by the public may also be reported to SBP Helpline at 021-111-727-273 or emailed at [email protected]

  • Nausheen Amjad appointed FBR chairperson

    Nausheen Amjad appointed FBR chairperson

    ISLAMABAD: Ms. Nausheen Javaid Amjad, a BS-22 officer of Inland Revenue Service (IRS) has been appointed as the chairperson of Federal Board of Revenue (FBR) and a notification will be issued shortly, sources said on Monday.

    Ms. Nausheen has been appointed as the chief of revenue body on the recommendations of senior tax officers. A vacuum was created after Shabbar Zaidi went on leave for an indefinite period.

    She was serving as acting chairperson since January 31, 2020 after Shabbar Zaidi was granted leave on health grounds.

    Last week a summary for the cabinet was sent for the appointment of FBR chairman.

    Selection Committee for selection of senior officers has unanimously recommended that Ms. Nausheen Javaid Amjad presently posted as Member (Admin) FBR may be appointed as Chairperson FBR.

    Syed Muhammad Shabbar Zaidi, Chartered Accountant, was appointed as Chairman FBR, on May 10, 2019 for a period of two years, on honorary / pro bono basis.

    In view of the above, Establishment Division proposed the following:

    1. The honorary / pro bono appointment of Syed Muhammad Shabbar Zaidi, as Chairman FBR may be terminated with immediate effect.

    2. Ms. Nausheen Javaid Amjad (BS-22/IRS) presently posted as Member (Admin), may be transferred and appointed as chairperson FBR with immediate effect.

  • FBR extends suspension of customs officials

    FBR extends suspension of customs officials

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the suspension period for further three months in case of two customs officials.

    Through a notification, the FBR extended the suspension period of the following inspectors BS-16 of Model Customs Collectorate (Enforcement and Compliance), Lahore for further period of three months with effect from March 30, 2020:

    01. Muzaffar Hussain, Inspector

    02. Khalid Pervaiz Bhutta, Inspector

    Both the customs officials were suspended on December 30, 2019 for inefficiency and misconduct.

  • Immunity under Section 111 is Tax Amnesty

    Immunity under Section 111 is Tax Amnesty

    KARACHI: Granting immunity from Section 111 of Income Tax Ordinance, 2001 is an amnesty, senior tax officials at Federal Board of Revenue (FBR) said. This section of the ordinance deals with unexplained income or assets. This section is powerful tool against concealed or black money.

    This was made part to the ordinance as deterrence against tax evasion. However, respective governments frequently granted immunity from this section to classes of persons to whiten their ill-gotten money at the cost of genuine taxpayers.

    PTI’s ruling government, which was very vocal against amnesty schemes and its chairman and sitting Prime Minister Imran Khan in the past on many occasion vowed to tighten noose around tax evaders instead giving such amnesties.

    In contrast the PTI government in its less than two years granted a general amnesty in 2019 and now is going to grant blanked amnesty to construction sector despite realizing it was parking lot for black money.

    It is lamentable the ministry of finance late last month issued Medium Term Budget Strategy Paper for year 2020-2023 in which it is clearly written: “Amnesty schemes will no longer be offered, and exemptions will be curtailed.”

    Prime Minister Imran Khan on April 03, 2020 announced a package for construction industry and said: “those investing in the construction sector during the year 2020, would not be asked any queries about the source of their income.”

    The story not ends here as the government is going beyond and reverting its decision and announced a fixed tax regime for builders and developers. The fixed tax regime is disaster for taxation system and in the last budget the government itself reinstated minimum tax regime in order to realize income tax from true income.

    The Medium Term Budget Strategy Paper 2020/2023 also pointed out eliminating the final tax regime. “Gradual phasing out of Final Tax Regime will help in taxing real income,” it added.

    Prior to Finance Act, 2019, persons involved in certain transactions were not required to pay tax on their actual income. Instead, the tax collected or deducted on such transactions was treated as their final tax liability.

    “Since the tax deducted was final tax, therefore, such persons were not subjected to detailed scrutiny through audit,” according to Income Tax Circular 09 of 2019.

    It further said the actual tax potential from such transactions is not realized due to presence of final tax regime.

    Tax experts believed that the government was considered only one sector for granting amnesty and allowing immunity from questioning source of income. Granting such amnesty to a particular sector is against fundamental right and may be challenged in the court of law.

  • Business community demands cut in tax rates to half for three months

    Business community demands cut in tax rates to half for three months

    KARACHI: Business community has demanded the government of reducing tax rates to half for at least three months in order to provide relief to industry and dilute impact of coronavirus.

    (more…)
  • Highlights of tax amnesty for construction sector

    Highlights of tax amnesty for construction sector

    KARACHI: Federal Board of Revenue (FBR) to offer many incents through amendment to income tax law in order to comply with the announcement of the prime minister to grant tax amnesty to construction sector.

    According to highlights released by Arif Habib Limited, the following incentives to be offered by the FBR:

    1. Special tax provisions for builders and developers

    2. Exemption from provisions of section 111 of the Income Tax Ordinance 2001, on construction activity

    3. Rationalization of the Capital Gains Tax (CGT)

    4. Valuation of Real Estate / Plots

    5. Rationalization / Reduction in Sales Tax on Construction Material

    6. Exemption of taxes on first house

    7. Establishment of special taxes.

    The analysts said that the domestic construction sector has faced enormous challenges in recent times due to changes in the regulatory environment (influenced by the ruling government, FATF etc.) including provision of money trail, assessment of income and increase in valuation of real estate.

    Moreover, regulations such as CNIC requirement, restriction on sale of construction material to non-registered clients of over PKR 10mn etc.) also hindered construction activity.

    The government has recognized the importance of the housing and construction sector and has addressed some of these concerns under the “Special Incentive Package for the Construction Industry” to revive the real estate sector.

    The Government intends to dilute the impact of Covid-19 outbreak on domestic employment and has therefore introduced this package to mitigate its impact to some extent.

  • KCCI demands suspension in sales tax on services collection for six months

    KCCI demands suspension in sales tax on services collection for six months

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the Sindh government to suspend the sales tax collection by Sindh Revenue Board (SRB) for six months.

    (more…)
  • Weekly Review: Market to celebrate amnesty to black money

    Weekly Review: Market to celebrate amnesty to black money

    KARACHI: The stock market likely to maintain bullish trend during the next week owing to tax amnesty announced by the prime minister for construction sector.

    Analysts at Arif Habib Limited said that the index to continue the rally as investors celebrate the government’s proactive stance to keep the economy afloat during the lockdown.

    The government’s incentives package for the construction industry to keep economic activity upbeat should help sustain the positivity in the cement/engineering sector while oil scrips should be dictated by the developments regarding an emergency meeting of OPEC+ called by Saudi Arabia and its outcome.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.8x (2020) compared to Asia Pac regional average of 10.2x and while offering DY of around 8.8 percent versus around 3.1 percent offered by the region.

    Following a 3-week rout of the KSE-100 Index, the bourse finally rebounded this week with a 12.5 percent return WoW – highest ever weekly return.

    Optimism in the bourse was sourced from the federal government announcing a series of measures to mitigate risks to the economy from the COVID-19. Banks and E&P rallied as valuations had reached dirt cheap levels. Towards the end of the week President Trump’s announcement of a possible agreement between Saudi Arabia and Russia to cut production sent oil prices soaring (WTI up 18 percent WoW) and thereby E&P stocks.

    The KSE-100 closed at 31,622 points (up by 12.5 percent / 3,512 points WoW).

    Sector-wise positive contributions came from i) Commercial Banks (764 points), ii) Oil & Gas Exploration Companies (550 points) and iii) Cement (537 points). Scrip-wise positive contributions were led by HUBC (290 points), LUCK (227 points), and UBL (186 points).

    Foreign selling continued this week clocking-in at USD 36.1 million compared to a net sell of USD 13.7 million last week. Selling was witnessed in E&Ps (USD 13.5 million) and Commercial Banks (USD 8.0 million).

    On the domestic front, major buying was reported by Individuals (USD 13.0 million) and Funds (USD 10.3 million). Average Volumes settled at 228 million shares (up by 52 percent WoW) while average value traded clocked-in at USD 46 million (up by 66 percent WoW).

  • PM announces tax incentive package for construction industry

    PM announces tax incentive package for construction industry

    ISLAMABAD: Prime Minister Imran Khan on Friday announced a comprehensive tax incentive package for construction industry and allowed opening of activities in this sector from April 14, 2020.

    According to state-run media the prime minister announced the opening of construction sector from April 14 to help the country’s daily wagers and laborers, affected by continued lockdown due to COVID-19 outbreak, to earn their livelihoods.

    Talking to media-persons, he said the government’s decision taken in coordination with the provinces, was also aimed at reviving economic activities in the country, badly hit by the situation arising out of the coronavirus outbreak.

    The prime minister also announced various incentives for the construction sector including tax incentives, waivers and subsidies in the areas of sales tax, capital gain tax, withholding tax etc.

    Giving details of the decisions, he said that those investing in the construction sector during the year 2020, would not be asked any queries about the source of their income.

    Secondly, the Prime Minister said, the government had also decided to bring the construction sector in the fixed-tax regime under which the rate of tax on land would be levied on the basis of per square yard and per foot.

    He, however, added that those investing in the prime minister’s housing programme would be given 90 percent tax rebate and they would be required to pay just 10 percent of the total calculated tax amount on their projects.

    Imran Khan said that it has also been decided to waive-off withholding in cement and steel sectors.

    Besides, he said, that in coordination with the provincial governments of Punjab, Khyber Pakhtoonkhwa and Sindh, it has also been decided to bring the sales tax in construction sector to 2 percent through consolidation of all taxes.

    The Prime Minister further said that Capital Gain Tax on the sale of house was also being done away with.

    He also announced Rs. 30 billion subsidy for Naya Pakistan Housing Programme, adding, further subsidy would be given on its progress.

    The Prime Minister said the government has also decided to give construction sector the status of industry.

    It has also been decided to establish the Construction Industry Development Board (CIDB) to help promote the construction industry in the country, he added.

    The Prime Minister said all the decisions regarding the COVID-19 were being taken in coordination with the provinces. However, he added, any of the provinces could make changes as per their requirements.

    He said since the Rs. 1200 billion’s stimulus package announced by the federal government to provide financial relief to the poor and daily-wagers in the wake of lockdown due to Coronavirus outbreak, the government had decided to open the construction sector.

    The prime minister said with the agriculture sector, which was already open, providing jobs to people in villages, the opening of construction sector, the main source of employment in urban areas, was very much needed.

  • FBR monitors tax refund repayments to ensure transparency

    FBR monitors tax refund repayments to ensure transparency

    ISLAMABAD: Federal Board of Revenue (FBR) has initiated the monitoring to ensure transparency in repayment of tax refunds.

    An office order circulated to all Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs), the FBR said that the prime minister had announced relief package for the industry which included tax refunds of Rs100 billion to industrial sector.

    The FBR said that presently huge amount of sales tax refund claims were laying pending for replication/processing in each RTO/LTU.

    The revenue body further said that in this emergency situation the genuine businesses/industries need liquidity to pay salaries to their employees.

    The FBR directed the tax offices to process the sales tax refund claims immediately on urgent basis and sanction the admissible amount to the refund claimant as per law.

    The FBR directed Chief Commissioner of RTOs/LTUs to monitor the process in order to maintain transparency and fairness.

    The chief commissioners have also been directed to report the refund release to FBR on daily basis.