Pkrevenue.com

Day: January 17, 2021

  • Import of CKD motor vehicles witnesses unprecedented growth

    Import of CKD motor vehicles witnesses unprecedented growth

    ISLAMABAD: The import of motor vehicles in Completely Knock Down (CKD) condition has witnessed a unprecedented growth of 4902 percent in December 2020 due to acceleration of manufacturing activities by auto industry in the country.

    According to Pakistan Bureau of Statistics (PBS), the import of motor vehicles in CKD/Semi Knock Down (SKD) condition increased to $107 million in December 2020 as compared with meagre $2.14 in the same month of the last year.

    The country’s car industry witnessed significant downfall during the last year due economic slowdown and adverse impact of coronavirus.

    The economy during the first half of the last year had witnessed consolidation and shown improvement in early 2020. However, the coronavirus which detected in last months of 2019 in China adversely affected the world as well as domestic economy.

    The car manufacturing in the country has witnessed growth during the first half of the current fiscal year. However, the pace of manufacturing grew at a faster pace in the last months of the first half of the current fiscal year.

    The car production is major component of Large Scale Manufacturing (LSM) as this industry grew by 1.97 percent in November 2020 over the corresponding month of the last year.

    Meanwhile, car sales, as reported by PAMA, increased by 15 percent YoY in December 2020 to 13,870 units.

    The same, including Lucky Motor Corporation (KIA, non-member of PAMA), is up by 20 percent YoY.

  • Adjustment of expenses allowed against property income

    Adjustment of expenses allowed against property income

    ISLAMABAD: The Federal Board of Revenue (FBR) has said that adjustment of expenses on property income has been allowed if a taxpayer opted to pay income tax under the head of individual income.

    Sources in FBR said that through Finance Act, 2016, a dual tax treatment was introduced for property income of individuals/A0Ps and companies.

    Individuals and AOPs had to pay fixed amount of tax on gross rentals at the rates specified in Division VIA of Part-I of First Schedule.

    However, certain deductions were allowable for computing property income in case of a company.

    A new sub-section (7) was added to Section 15A through Finance Act, 2019 to enable Individuals/A0Ps to opt for normal tax regime and claim deductions against gross rentals as provided in the law.

    But that option was available only to those individuals and AOPs who derived income from property in excess of Rs.4 million.

    The Finance Act, 2020 has removed this condition by making amendment in sub-section 7 of section 15A.

    Now all individuals/A0Ps are allowed to claim deductions against gross rental income if they opt to pay tax at rates given in Divisions I of Part-I of First schedule to the Ordinance.

    Furthermore, deduction in respect of administration and collection charges under clause (h) of Section 15A has been reduced from 6% to 4% of the rent chargeable to tax.

  • Transfer of foreign assets required to be declared in annual return

    Transfer of foreign assets required to be declared in annual return

    ISLAMABAD: A person makes transaction or transfer of foreign assets during a tax year is required to declare the same in annual return.

    Officials in the Federal Board of Revenue (FBR) said that according to Income Tax Ordinance, 2001 a person having foreign assets or foreign income is required to file annual return of income and wealth statement.

    The law also makes mandatory for the person to declare any foreign assets transferred to any other person during the tax year and the consideration for the said transfer.

    Section 116A of the Income Tax Ordinance, 2001 explains the return filing requirement for a person having foreign income and assets statement.

    Section 116A. Foreign income and assets statement.

    (1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—

    (a) the person’s total foreign assets and liabilities as on the last day of the tax year;

    (b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

    (c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

    (2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.