Pkrevenue.com

Month: November 2020

  • FBR connects with NADRA system to identify potential taxpayers

    FBR connects with NADRA system to identify potential taxpayers

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday signed a Memorandum of Understanding (MoU) with National Database Regulatory Authority (NADRA) to verify persons’ identity directly.

    A statement issued by the FBR said that on the directives of the Prime Minister to facilitate taxpayers the MoU had been signed to directly verify CNIC and other relevant documents.

    A FBR spokesman said that the connectivity would facilitate taxpayers as this would automatically feed tax refund data into withholding statements and tax returns.

    Further, it will reduce timing to comply with relevant laws, the spokesman added.

    The FBR hoped that this connectivity would also help the tax authorities to connect with other organizations.

    The connectivity with NADRA will help the FBR to identify such individuals who are out of tax net and concealing their incomes and assets, the spokesman said.

  • KTBA protests over ex-parte tax orders against COVID patients

    KTBA protests over ex-parte tax orders against COVID patients

    KARACHI: Karachi Tax Bar Association (KTBA) on Wednesday protested over ex-parte order passed by tax offices despite taxpayers, who tested positive for coronavirus, applied for adjournment.

    The KTBA in a letter sent to Member Inland Revenue (Operations) of Federal Board of Revenue (FBR), said that the field formations of FBR are not considering requests from taxpayers/authorized representatives (ARs) for adjournment of hearings/compliance and are adamant to proceed ex-parte/enforce personal hearings.

    “The bar has also received complaints from our members that in some of the cases, ex-parte orders have already been passed where taxpayers/ARs were observing self isolation and were quarantined for having contracted Covid-19 and were unable to attend hearing notices.”

    The KTBA believes such actions of passing ex-parte orders are totally against the spirit of facilitation and will be detrimental to the image of FBR. “Additionally, passing of such orders will not achieve any objective but would not also stand test of appeals.”

    The tax bar demanded the FBR of equity and fairness and urged the Member to direct field formations to refrain from passing orders where ARs / taxpayers have requested for adjournments and are isolated due to Covid-19 cases.

    The Member has also been urged to direct the field formations to recall all such orders passed ex-parte in the absence of taxpayer/ARs by taking recourse of Section 122A of Income Tax Ordinance, 2001 and Section 45A of Sales Tax Act, 1990 and oblige.

    As aware, coronavirus (Covid-19) pandemic has hindered the mobility of people severely across the world who now largely prefer to work/liaise online due to health reasons.

    Pakistan is no exception and is currently experiencing a second wave of this malaise. Keeping in view of the rising trend Covid-19 cases, provincial governments have already issued SOPs to minimize/limit social contact and to stop the spread of Covid-19 cases.

    It is worth mentioning have that the Government has very recently directed that 50 percent of the office staff shall work from home as the Covid-19 cases are rising rapidly.

    The tax bar also invited the Member’s attention that presently all the members of KTBA fraternity are heavily occupied in their National responsibility i.e. preparation and filing of tax returns for the Tax Year 2020.

    In this situation issuance of notices (audit, monitoring, amendments etc.) with a very short compliance date is against the principles of natural justice and fair play.

    It is also worth mentioning to add that Chief Commissioners Inland Revenue at Karachi had assured of their fullest cooperation and vowed to take immediate all the remedial action in the event of any mishandling for which we are grateful.

    The KTBA urged the Member to direct the field formations to strictly follow SOPs issued by the government to combat the spread of Covid-19 and also direct the officers to suspend issuance of all notices till December 08, 2020 (last date of filing of returns) and where ex-parte orders have been passed (where intimation / adjournments were available) recall such orders.

  • FBR sets up body to regulate jewelers, real estate agents

    FBR sets up body to regulate jewelers, real estate agents

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday approved a body to regulate transactions by jewelers, real estate agents and accountants under anti-money laundering (AML)/Counter Financing of Terrorism (CFT) laws.

    According to an office order, the FBR approved the operationalization of Directorate General of Designated Non-Financial Business and Professions (DNFBPs), with its headquarter at Islamabad within the existing sanctioned strength and budget grant of FBR with immediate effect.

    The Designated Non-Financial Businesses and Professions (DNFBPs) are real estate agents, jewelers and accountants.

    The FBR issued SRO 924(I)/2020 dated September 30, 2020 related to DNFBPs to comply with conditions under Finance Action Task Force (FAFT).

    Under the latest office order, the FBR sets up field formations at Islamabad, Quetta, Gilgit-Baltistan, Lahore and Karachi.

    The FBR has assigned additional responsibilities to customs and Inland Revenue officials to operate the Directorate General of DNFBPs.

    Dr. Bashirullah Khan (IRS/BS-20) has been assigned additional responsibility of Director General, Directorate General of DNFBPs.

    Other officials who have been given additional charge as Director of Directorate General of DNFBPs are included: Asem Iftekhar, (IRS/BS-20) Karachi, Zafar Iqbal Khan (IRS/BS-20) Islamabad, Irfan Javed (PCS/BS-20), Quetta, Rashid Habib Khan (PCS/BS-20) Gilgit Baltistan, Ahmad Kamal (IRS/BS-20) Lahore and Muhammad Tahir (PCS/BS-19) Director (HQ) DNFBPs Islamabad.

    RELATED STORY

    FBR issues SRO to regulate accountants, jewelers, real estate agents under AML/CFT

  • FBR decides punitive action against non-filer companies, individuals

    FBR decides punitive action against non-filer companies, individuals

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to take punitive measures against corporate entities for not filing income tax returns.

    (more…)
  • Assets of baking system increase by 7.8pc amid COVID challenges: SBP

    Assets of baking system increase by 7.8pc amid COVID challenges: SBP

    KARACHI: The assets of banking system increased by 7.8 percent during first half (January – June) 2020 despite challenging economic conditions prevailing during the period due to COVID-19 outbreak, State Bank of Pakistan (SBP) said on Wednesday.

    The SBP issued Mid-Year Performance Review (MPR) of the Banking Sector for the year 2020.

    The review comprehensively covers the performance and soundness of the banking sector for the period January to June 2020 (H1CY20).

    The expansion in assets was backed by banks’ investments, which increased by 22.8 percent (or Rs2.0 trillion). The surge in deposits provided the necessary funding support to finance the robust rise in investments.

    Advances, on the contrary, observed mild downtick owing to the economic slackness caused by the disruption inthe business activities after the outbreak. Sans SBP supportive measures, though, the contraction in advances could have been much higher.

    The review also highlighted that the policy measures rolled out by SBP facilitated the banking sector in conserving the capital, enhancing the lending capacity and increasing the loss absorption ability.

    As a result, despite some increase in credit risk, banking sector demonstrated improved profitability and enhanced resilience.

    The Non-performing loans (NPLs) ratio increased from 8.6 percent as of end December 2019 to 9.7 percent as of end June 2020.

    However, net NPLs to loans ratio, which is a better measure of credit risk, increased only marginally from 1.7 percent to 1.9 percent.

    The earnings marked visible improvement as profitability jumped by 52 percent on YoY basis. This improvement resulted from higher interest income, deceleration in interest expenses and rise in non-interest income.

    With better profitability, the soundness of the banking sector further strengthened as Capital Adequacy Ratio (CAR) increased to 18.7 percent in June-20 from 17.0 percent in December 2019.

    The review also includes the results of the 6th wave of SBP’s Systemic Risk Survey (SRS) conducted in July-August, 2020, which represents the views of the market participants.

    The survey results indicate that—at present and for the next six months—the respondents consider global risks and domestic macroeconomic risks to be important.

    Notably, the policy measures taken by SBP to mitigate the implications of COVID-19 have been very well received by the stakeholders.

  • Stock market gains 44 points amid rang bound trading

    Stock market gains 44 points amid rang bound trading

    KARACHI: The stock market gained 44 points on Wednesday amid range bound trading during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 41,197 points as against 41,153 points showing an increase of 44 points.

    Analysts at Arif Habib Limited said that the market traded range bound today between +177 points and -253 points, closing the session +44 points.

    International crude oil prices (+3.5 percent) helped E&P sector to post hefty price gains, however, market’s fear of unknown that emanates from developing political wrangling between the Opposition and the Incumbent Govt. kept the increase in Index in check.

    Cement Sector stocks saw selling pressure on the expectation of decline in monthly dispatches based on the first week of November. Fertilizer, O&GMCs and Banking sector stocks remained subdued due to somber investor sentiment.

    Overall volumes also dropped over the day due to investor sentiment. Among scrips, BIPL topped the volumes with 31.5 million shares, followed by TRG (25 million) and KEL (16.3 million).

    Volumes declined from 355.9 million shares to 244.3 million shares (-31 percent DoD). Average traded value also declined by 43 percent to reach US$ 54.6 million as against US$ 95.5 million.

    Sectors contributing to the performance include E&P (+130 points), Banks (+35 points), Technology (+22 points), Cement (-62 points) and Power (-11 points).

    Stocks that contributed significantly to the volumes include BIPL, TRG, KEL, ASC and POWER, which formed 42 percent of total volumes.

    Stocks that contributed positively to the index include OGDC (+55 points), PPL (+37 points), HBL (+36 points), POL (+25 points) and TRG (+16 points). Stocks that contributed negatively include LUCK (-25 points), ENGRO (-17 points), MLCF (-9 points), CHCC (-8 points) and KEL (-8 points).

  • Dollar eases to Rs158.49 as rupee further strengthens

    Dollar eases to Rs158.49 as rupee further strengthens

    KARACHI: The Pak Rupee made 20 paisas gain against dollar on Wednesday owing to rising coronavirus cases and lockdown discourage lowered demand for import payments, dealers said.

    The rupee ended Rs158.49 to the dollar from previous day’s closing of Rs158.69 in interbank foreign exchange market.

    The dealers said that the rising number of coronavirus cases and as a result of imposition of lockdown across the world dampened the demand of the foreign currency for import payment.

    The dealers said that positive sentiments, however, remained prevailed due to improved economic indicators including inflows of foreign remittances and export receipts.

    The rupee hit an all-time low of Rs168 on August 26, 2020.

    According to Pakistan Bureau of Statistics (PBS) the exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.

    Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.

    The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.

  • FBR bars creation of new units to resolve HR shortage

    FBR bars creation of new units to resolve HR shortage

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday restrained tax offices from creating new units/ranges for resolving shortage of human resource.

    A circular issued by the FBR stated that a meeting of Inland revenue-Operations and Admin Wings of FBR was held on November 04, 2020 in which various requirements of IR field formations were discussed.

    It was observed that field formations had increased the number of units and ranges without taking into consideration the notified sanctioned strength of the field offices.

    “Needless to say, with increase of just one extra unit, there raises a requirement of support and technical staff, this leads to an unending shortage of human resource for the organization,” it added.

    The FBR directed the tax offices to avoid creating new unit/range unless prior approval of the board is obtained.

    The FBR also directed all the chief commissioners to share details of existing units and ranges to enable the tax authorities to notify the sanctioned strength.

  • KTBA expresses concerns over delay in form issuance for taxpayer profile update

    KTBA expresses concerns over delay in form issuance for taxpayer profile update

    KARACHI: Tax practitioners on Tuesday expressed serious concern over delay by Federal Board of Revenue (FBR) in issuing forms for mandatory profile update by taxpayers.

    Karachi Tax Bar Association (KTBA) in a letter sent to Member Inland Revenue Operations discussed the delay by the FBR in issuing forms for mandatory profile update by taxpayers.

    The KTBA said that Section 114A of the Income Tax Ordinance, 2001 was introduced through Finance Act, 2020.

    The profile update has been made mandatory for taxpayers to electronically update certain information including bank accounts, utility connections, details of business premises etc.

    The deadline for electronically filing the taxpayers profile form in case of persons already registered before September 30, 2020 is on or before December 31, 2020. In case of a person registered after September 30, 2020 the registration must be within 90 days of the registration.

    Further, failure to file the form would not only entail punitive penalty but the taxpayers would also be excluded from the Active Taxpayers List (ATL).

    Till today the form as required to be filed under Section 114A has not been prescribed let alone its availability on IRIS.

    The KTBA pointed out the gravity of the situation, as updating the profiles of almost 2.5 million taxpayers and that too with the comprehensive information is a stupendous and time consuming exercise for the counsels of the taxpayers and that too at the time when the counsels of the taxpayers are engrossed in filing the tax returns as well as wealth statements, the last date of which is falling due on December 08, 2020.

    It is a must exercise to be undertaken like in any developed tax regime in the world, yet the non-availability of prescribed forms and the facility of the same on IRIS is highly unexpected and rather damaging. “The is coupled with the fact that with limited functionality on IRIS in these times of return filing, it is feared that IRIS may malfunction disrupting the timelines to be adhered for filing the income tax return and updation of taxpayer’s profile together.”

    The KTBA urged Member IR Operations to immediately take measures to prescribed the form as required under Section 114A of the Ordinance and also give directions to provide the same in IRIS for updation of taxpayer’s profile with the directions to field offices not to issue penalty notices as the delay is not on part of the taxpayers.

  • Rate of advance income tax on education fee

    Rate of advance income tax on education fee

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax to be collected by educational at the time of preparing fee challan during tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated the rate of collection of tax under section 236I of Income Tax Ordinance, 2001, which shall be 5 percent of the amount of fee.

    Following is the text of Section 236I under which the advance tax to be collected by educational institutions:

    236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.