Day: January 23, 2021

Procedure for registration of FBR informer

ISLAMABAD: A person can share information of tax evasion and get monetary reward for the disclosure from Federal Board of Revenue (FBR) provided that the informer should be registered with a tax authority for the purpose.

According to Income Tax Rules, 2002 a procedure has be laid down for registration of an informer.

According to the rules, any person desirous of getting himself registered as an informer may make an application to the Chief Commissioner for registration.

The application shall be in the prescribed form and shall be verified in the prescribed manner.

The application shall be accompanied by the following documents, namely:

(a) copy of the Computerized National Identity Card of the applicant;

(b) copy of national tax number (NTN) certificate; and

(c) a duly sworn in affidavit stating therein that the information being provided is correct and nothing has been concealed there from and that in case any incorrect information is provided or any information is concealed he shall be liable to penal action under the laws for the time being in force.

The rules also explain the procedure for submission of information and further action thereupon.

An informer shall submit any information regarding concealment or evasion of tax leading to detection or collection of taxes, fraud, corruption or misconduct that is in his possession to the Chief Commissioner giving precise details of the alleged act along with all supporting evidences that are in his possession:

Provided that no information shall be entertained unless it gives precise details of the alleged act and is accompanied with the supporting evidences.

On receipt of the information, the Chief Commissioner shall scrutinize the information and forward it to the concerned Commissioner.

On receipt of the information from the Chief Commissioner, the concerned Commissioner shall conduct such further enquiry as he may deem fit and submit his report to the Chief Commissioner.

On completion of the enquiry, the concerned Commissioner shall take such further action as may be required under the tax laws or any other law for the time being in force, as may be necessary on the basis of the facts of the case, and furnish his report to the Chief Commissioner.

Notwithstanding anything contained in these rules, an informer, who −

(a) has knowingly provided false information under these rules; or

(b) has provided the information under these rules with the intention to intimidate or blackmail a person, or to bring him into disrepute, or to otherwise cause him financial loss, shall be liable to punishment and fine under the tax laws and other laws for the time being in force.

January 23, 2021
Exchange company license may be revoked on false information

KARACHI: The State Bank of Pakistan (SBP) has said it can revoke license of any exchange company in case the central bank has been provided with false, misleading or inaccurate information by or on behalf of the exchange company.

According to Exchange Company Manual, the SBP has the right to revoke a license of an exchange company at any time.

Before a license is revoked, the Exchange Company shall be served with a notice mentioning therein the reasons for such revocation and instructions for the company to explain its position in writing within 30 days from the date of issuance of notice.

The SBP said that license of an Exchange Company can be revoked by the central bank if:

(a) The State Bank is provided with false, misleading or inaccurate information by or on behalf of the Exchange Company.

(b) It appears to the State Bank that the Exchange Company has violated these or any other regulation, instruction or circular issued by the State Bank or if any of the conditions of license has not been fulfilled or is incapable of fulfillment.

(c) The interests of the customers of Exchange Company are in any way threatened, whether by the manner in which the company is conducting or intends to conduct its affairs or for any other reason.

(d) The Exchange Company did not commence its exchange business within three months from the date of issuance of license by the State Bank.

(e) Deliberate obstruction of the State Bank inspection team in the performance of their duties, by Exchange Companies or officials of its network.

(f) Any other reason that in the opinion of the State Bank disqualifies the Exchange Company to hold the license.

January 23, 2021
Business demands to withdraw power tariff hike, shutting down captive power plants

KARACHI: Business community has demanded Prime Minister Imran Khan to withdraw the decision to increase in power tariff hike and shutting down the captive power plants because such decision would sabotage efforts of the government to enhance the exports.
(more…)

January 23, 2021
KCCI, Jazz sign deal for 35 percent to businessmen

In a significant move to benefit the local business community, the Karachi Chamber of Commerce & Industry (KCCI) and Jazz, Pakistan’s leading 4G operator and top internet and broadband service provider, have announced the signing of a Memorandum of Understanding (MoU). The agreement, formalized on Saturday, aims to provide substantial discounts on Jazz’s services to KCCI members.
(more…)

January 23, 2021
Weekly Review: market likely to trade in green

KARACHI: The stock market is likely to stay in green during the next week owing to the central bank decision to keep policy rate intact at 7 percent.

Analysts at Arif Habib Limited hoped that the market to trade in green due to

i) Central bank keeping policy rate unchanged while also hinting at status quo stance in the near term, which is positive for the stock market,

ii) encouraging SBP projections as current account deficit is expected to remain below 1 percent of GDP for FY21,

iii) slowdown in Covid-19 infection ratio, and

iv) stable PKR/USD parity.

However, once again bears took charge and negative sentiments were fueled by

i) announcement of current account deficit after five months,

ii) likely increase in electricity tariff by PKR 1.95/KwH (notification awaited), and

iii) CCoE’s proposal to discontinue natural gas supply for captive power generation. Our preferred stocks are OGDC, HUBC, HBL, MCB, FFC, LUCK, ACPL, PSO, ENGRO, MCB, INDU, UBL, and NML.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2021) compared to Asia Pac regional average of 17.7x while offering a dividend yield of ~6.4 percent versus ~2.6 percent offered by the region.

This week trading commenced on a negative note due to

i) worsening gas supply situation in the country which might result in suspension of gas supply to industries,

ii) decline in international crude prices (negative sentiment in E&P sector), and

iii) rising political pressure as PDM wanted to protest in front of Election Commission of Pakistan to probe foreign funding case.

However, the index displayed a rebound on the next trading day and recovered lost points.

However, once again bears took charge and negative sentiments were fueled by

i) current account deficit after five months,

ii) government increased electricity tariff by PKR 1.95, and

iii) CCoE approves Petroleum Division’s proposal for discontinuation of natural gas supply for captive power generation.

The KSE-100 index closed at 45,868 points, down by 63 points or 0.14 percent WoW.

Contribution to the downside was led by

i) Oil and Gas Exploration Companies (143 points),

ii) Fertilizer (43 points),

iii) Oil and Gas Marketing (33 points),

iv) Automobile Assembler (25 points), and

v) Pharmaceuticals (16 points). Scrip-wise major losers were PPL (65 points), OGDC (59 points), POL (59 points), ENGRO (31 points), and MCB (22 points).

Whereas, scrip-wise major gainers were TRG (110 points), MARI (41 points), BAHL (34 points), KTML (29 points) and ICI (26 points).

Foreigners accumulated stocks worth USD 5.51 million compared to a net sell of USD 2.10 million last week. Major buying was witnessed in Technology and Communication (USD 3.24 million) and Power Generation and Distribution (USD 2.43 million).

On the local front, selling was reported by Mutual Funds (USD 19.90 million) followed by Broker Proprietary Trading (USD 7.46 million).

That said, average daily volumes and traded value for the outgoing week were down by 25 percent and 9 percent to 510 million shares and USD 118 million, respectively.

January 23, 2021
FBR issues rules for rewarding informers, officials on recovery of tax evaded money

ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued rules to reward tax officials and informers on detection and recovery of evaded amount.

The FBR issued SRO 78(I)/2021 and said that officers and staff deputed to exercise powers, enforce and/or perform functions and duties in designated entities under the specified statutes and informers or whistleblowers.

According to the rules, the officers / members of staff in Inland Revenue detecting the tax evasion shall be eligible for lesser of 20 percent of the tax sought to be evaded or two years’ salary at the time of detection/filing of the detection report.

Further, officer/member of staff completing the adjudication/assessment the reward shall be lesser of 20 percent of the tax sought to be evaded or two years’ salary as at the time of completion of adjudication / assessment.

The FBR said that if no appeal/revision has been filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision.

In case an appeal has been filed against the assessment order the admissible reward claim would be processed as: 50 percent upon confirmation at first appeal forum; and 50 percent upon completion of appellate process on point of fact i.e. Appellate Tribunal Inland Revenue (ATIR).

The reward shall be paid only if the tax sought to be evaded has been recovered at least to the extent of 50 percent of the tax sought to be evaded.

In case detection and assessment have been made by the same officer, he shall be entitled to the reward of the lesser of 20 percent of the tax sought to be evaded or three years’ salary as at the time of detection / filing of the detection report.

In case there are more than one claimants of reward on account of detection or assessment, the reward would be apportioned as per the recommendation of the chief commissioner or director general concerned.

An informer / whistleblower in terms of clause (v) of rule 2 shall be entitled to a reward at the rate of 20 percent up to a maximum of Rs5 million of the tax sought to be evaded in a single case.

January 23, 2021