ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that a new mechanism of settlement of cases has been introduced to facilitate taxpayers. The FBR said that before Finance Act, 2020, a taxpayer aggrieved with an assessment order could file an appeal before the appellate authority and the same time could also avail alternate dispute resolution mechanism.
(more…)Day: August 13, 2020
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Foreign exchange reserves eases to $19.518 billion
KARACHI: The liquid foreign exchange reserves of the country have declined by $45 million to $19.518 billion by week ended August 07, 2020, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $19.563 billion by week ended July 30, 2020.
The official reserves of the SBP slipped by $73 million to $12.469 billion by week ended August 07, 2020 as compared with $12.542 billion a week ago.
The central bank attributed the decline in foreign exchange reserves to scheduled payment of external debt.
However, the foreign exchange reserves held by commercial banks increased by $28 million to $7.049 billion by week ended August 07, 2020 as compared with $7.021 billion a week ago.
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Tax incentive package: over 4,800 projects of construction industry to get registration
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that it had received overwhelming response to construction industry package and over 4,800 projects have prepared drafts to get registration in the IRIS system.
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Stock market ends down by 182 points on profit taking, GIDC decision
KARACHI: The stock market fell by 182 points on Thursday owing to profit taking and the decision of the apex court regarding payment of Gas Infrastructure Development Cess (GIDC).
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,291 points as against the previous day’s closing of 40,473 points showing a decline of 182 points.
Analysts at Arif Habib Limited said that the market opened on a positive note on the opening bell with +70 points and 2.8 million shares.
The index tumbled afterwards as Supreme Court announced the decision on GIDC, which required industries to pay Rs. 457 billion on account of GIDC over a period of 2 years. Investors took it as cue to book profits, which brought the index down by 575 points during the session.
E&P, O&GMCs and Tech stocks largely remained unharmed, among which TRG and UNITY hit upper circuits. Fertilizer, Cement and Banking sector stocks remained under pressure throughout the session.
Vanaspati sector led the volumes with 110 million shares, courtesy of UNITY (including the trading volume of its Right Shares).
This was followed by Technology (81.1 million) and O&GMCs (72.8 million). Among scrips, UNITY led the volumes with 60.1 million, followed by HASCOL (50.6 million) and UNITYR2 (50.6 million).
Sectors contributing to the performance include Fertilizer (-201 points), Inv Banks (-27 points), Banks (-19 points), Textile (-19 points), Technology (+31 points), O&GMcs (+29 points), Power (+22 points) and E&P (+18 points).
Volumes declined from 591.3 million shares as against 556.1 million shares (-6 percent DoD). Average traded value also declined by 14 percent to reach US$ 115.2 million as against US$ 133.7 million.
Stocks that contributed significantly to the volumes include UNITY, HASCOL, UNITYR2, WTL and TRG, which formed 41 percent of total volumes.
Stocks that contributed positively to the index include TRG (+37 points), HUBC (+22 points), BAHL (+20 points), SNGP (+15 points) and HASCOL (+13 points). Stocks that contributed negatively include FFC (-114 points), ENGRO (-44 points), MCB (-27 points), EFERT (-26 points) and DAWH (-24 points).
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Rupee strengthens by 15 paisas on inflows
KARACHI: The Pak Rupee gained another 15 paisas against dollar on Thursday owing to inflows of export and workers remittances.
The rupee ended Rs167.93 to the dollar from previous day’s closing of Rs168.08 in interbank foreign exchange market.
Currency analysts said that the rupee gained value for the third consecutive day. They said that the inflows of export receipts and workers remittances helped the rupee to gain value.
They further said that lower demand for import payment also helped the local unit.
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SBP allows transfer of up to $200,000 as payment for foreign digital services
KARACHI: State Bank of Pakistan (SBP) has allowed banks to release a maximum amount of $200,000 per year as payment for digital services provided by foreign companies.
The central bank on Thursday issued a new mechanism for payments to globally recognized digital service provider companies against acquisition of digital services by local companies for ease of doing business in the country.
The SBP amended Foreign Exchange Manual and allowed general permission to banks to release foreign exchange up to a maximum of USD 200,000/-, or equivalent in other currencies, per year, for each company/ firm/ sole proprietorship incorporated/ established in Pakistan on account of commercial payments, pertaining to digital services, in favor of digital service provider companies.
The release of payment is limited to foreign companies listed by the SBP, which are included:
1. Adobe
2. Affinity
3. Airtable
4. Alibaba Group
5. Amazon
6. Apple
7. AppLovin
8. Asana
9. Atlassian
10. Box
11. Calendly
12. Coursera
13. Digital Ocean
14. DocSend
15. DocuSign
16. Dropbox
17. Expensify
18. Facebook
19. Figma
20. FreshBooks
21. Front
22. GoDaddy
23. Google
24. Hootsuite
25. Hubspot
26. IBM
27. Instagram
28. Intercom
29. InVision
30. LinkedIn Corporation
31. Mailchimp
32. Marketo
33. Mendix
34. Microsoft Corporation
35. Optimizely
36. Oracle Corporation
37. Pilot
38. Pipe Drive
39. Poynt
40. Intuit/ QuickBooks
41. Red Hat/ OpenShift
42. Sketch
43. Salesforce
44. SAP SE / SAP
45. SEMrush
46. Shopify
47. Slack Technologies/Slack
48. Squarespace
49. Tencent
50. Trello
51. Twilio
52. Twitter
53. Udacity
54. Udemy
55. VMware
56. WhatsApp
57. WordPress
58. Xero
59. YouTube
60. Zapier
61. Zendesk
62. Zoom/ Video Communications
The SBP said that the ultimate beneficiary of remittances should only be the company (including their affiliates or associated entities).
However, up to a maximum amount of USD 25,000/-, out of the total annual limit of USD 200,000/-, can be remitted to those digital service provider companies which are not listed in the Appendix V 147, against acquisition of digital services.
The remittances should only be made by an Authorized Dealer designated by the remitter for this purpose under acknowledgement to Foreign Exchange Operations Department (FEOD) SBP-BSC. No Authorized dealer will remit funds under this general permission unless it has been acknowledged as designated Authorized Dealer by the FEOD SBP-BSC.
The SBP said that the banks will ensure that it has satisfied itself with the genuineness and bonafides of the applicant, through appropriate CDD and customer risk profiling, specifically in light of AML/CFT regulations.
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Withholding tax rates on registration, transfer of motor vehicles updated
ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates on registration and transfer of motor vehicles for tax year 2021.
The FBR updated the withholding tax card 2020-2021 (up to June 30, 2020) incorporating amendments made to Income Tax Ordinance, 2001 through Finance Act, 2020.
The withholding tax rate under Section 231B on private motor vehicles
Under this section motor vehicle registration authority shall collection withholding tax from persons getting new locally manufactured motor at the time of vehicle transferred in their name at the time of registration of new motor vehicle.
The withheld tax shall be adjustable against liability.
The tax rate shall be increased by 100 percent for persons not appearing on the Active Taxpayers List (ATL).
The withholding tax rates under this section shall be:
Engine Capacity For ATL For Non-ATL Up to 850CC Rs7,500 Rs15,000 851CC to 1000CC Rs15,000 Rs30,000 1001CC to 1300CC Rs25,000 Rs50,000 1301CC to 1600CC Rs50,000 Rs100,000 1601CC to 1800CC Rs75,000 Rs150,000 1801CC to 2000CC Rs100,000 Rs200,000 2001CC to 2500CC Rs150,000 Rs300,000 2501CC to 3000CC Rs200,000 Rs400,000 Above 3000CC Rs250,000 Rs500,000 Withholding tax under Section 231B(1A)
Every leasing company, scheduled bank, investment bank development finance institution, non-banking finance institution, MODARBA (Sharia compliant or under conventional mode) shall collect withholding tax from lessee at the time of lease.
The withheld tax shall be adjustable.
The tax rate shall be 4 percent of the value of motor vehicle on leasing of motor vehicle to persons not appearing in the Active Payers’ List.
The withholding tax rates under Section 231B (2)
Motor Vehicle Registration Authority shall collect withholding tax from person transferring the ownership / registration at the time of transfer.
The withheld tax shall be adjustable against the liability.
The rate of tax under sub-section (2) of section 231B shall be as follows-
Engine Capacity For ATL For Non-ATL Up to 850CC Rs0 Rs0 851CC to 1000CC Rs5,000 Rs10,000 1001CC to 1300CC Rs7,500 Rs15,000 1301CC to 1600CC Rs12,500 Rs25,000 1601CC to 1800CC Rs18,750 Rs37,500 1801CC to 2000CC Rs25,000 Rs50,000 2001CC to 2500CC Rs37,500 Rs75,000 2501CC to 3000CC Rs50,000 Rs100,000 Above 3000CC Rs62,500 Rs125,000 The withholding tax rates under Section 231B (3)
Manufacturer of motor vehicle shall collect withholding tax from purchaser at the time of sale of vehicle.
The withheld tax shall be adjustable against tax liability.
The withholding tax rates under Division VII, Part IV of First Schedule of the Income Tax Ordinance, 2001 are as follow:
Engine Capacity For ATL For Non-ATL Up to 850CC Rs7,500 Rs15,000 851CC to 1000CC Rs15,000 Rs30,000 1001CC to 1300CC Rs25,000 Rs50,000 1301CC to 1600CC Rs50,000 Rs100,000 1601CC to 1800CC Rs75,000 Rs150,000 1801CC to 2000CC Rs100,000 Rs200,000 2001CC to 2500CC Rs150,000 Rs300,000 2501CC to 3000CC Rs200,000 Rs400,000 Above 3000CC Rs250,000 Rs500,000 -
FBR issues SOPs for over-ruling objections on refund claims
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued procedure for over-ruling objections raised by Fully Automated Sales Tax e-Refund (FASTER) in order to facilitate taxpayers in obtaining their stuck up amount.
The FBR issued Sales Tax Circular No. 01 of 2020 / IR-Operations to unveil the Standard Procedure for Over-Ruling the STARR objections on Sales Tax Refund claims.
The FBR said that in order to bring uniformity into the system, and avoid discretion and delays in the processing of refund there is need to issue rules for the purpose at the national level.
Accordingly, in suppression of all previous instructions, SOPs and guidelines on the matter, the new procedure has been laid down. Under the procedure an officer not below the rank of additional commissioner-IR shall over-rule the objections raised by the electronic system after completion of all legal formalities and scrutiny of record of objections.
The FBR issued details of objections usually pointed out by the electronic system on which the tax officer may over rule.
The FBR, however, said that the refund claimant shall furnish soft copies of all the scanned documents which are under dispute requiring over-ruling.
The revenue body further said that where, result of automated processing of refund claims through FASTER or ERS, the claimants are not satisfied with the outcome of automated processing including calculation of refund or carry forward amounts or amounts deferred, the claimant may apply to the FBR through concerned chief commissioner for processing of the refund claim or revision of Annexure – H mentioning the reason.
After scrutiny of the written request of the claimant, the Chief (Projects & Refunds) may allow reprocessing of the claim or revision of Annexure-H for necessary corrections.
The FBR said that the procedure for over-ruling has become applicable with effect from August 01, 2020.