Pkrevenue.com

Month: April 2021

  • Minimum penalty of Rs10,000 fixed for defaulting withholding statement

    Minimum penalty of Rs10,000 fixed for defaulting withholding statement

    KARACHI: A minimum penalty of Rs10,000 has been fixed for defaulting withholding statement where no tax is required to be deposited.

    Official at the Federal Board of Revenue (FBR) said that the amendment has been brought into Section 182 of Income Tax Ordinance, 2001 through Tax Laws (Second Amendment) Ordinance, 2021.

    Chartered Accountants said that prior to the amendment following penalties are prescribed for non-filing of statements under sections 165, 165A or 165B within due date:

    a) Rs. 5,000 where the person has deposited the tax withheld within due date and the statement is filed within 90 days;

    b) In all other cases, Rs. 2,500 for each day of default with a minimum penalty of Rs. 10,000.

    However, a new proviso has been inserted whereby minimum penalty has been prescribed at Rs. 10,000 in cases where there is no tax withholding to be deposited in a particular period.

  • Weekly Review: market may witness range bound trading

    Weekly Review: market may witness range bound trading

    KARACHI: The stock market likely to trade in range bound during the next week owing to strengthening of rupee value and improved foreign exchange reserves.

    Analysts at Arif Habib Limited believed the market may portray a range-bound behavior next week. While consolidating macroeconomic fundamentals led by strengthening PKR/USD parity and building up of FOREX reserves pose upside risks, we highlight the ongoing third wave of COVID-19 to be a major risk to the investors’ confidence.

    The upcoming results season can attract bulls particularly amongst cyclical sectors.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.6x (2021) compared to Asia Pac regional average of 17.1x and while offering DY of around 7.1 percent versus around 2.5 percent offered by the region.

    This week saw bears return to the forefront as the market sentiment was in severe pressure. Changes in the cabinet including the Finance Ministry, announcement by ECC and subsequent rejection of the decision by the cabinet to resume trade with India, and the ongoing third wave of COVID-19 all contributed to the pessimism in the market.

    Failure to meet the deadline for the first tranche payment to IPPs further added to the overall pessimism. This week also saw successful issuance of the USD denominated Eurobonds in international markets that raised USD 2.5 billion.

     The market closed at 44,301 points, shedding 1,221 points WoW.

    Sector-wise negative contributions came from i) Technology & Communication (341 points), ii) Commercial Banks (164 points), iii) Oil & Gas Exploration Companies (147 points), iv) Cement (144 points) and v) Power Generation and Distribution (117 points).

    Meanwhile, sectors that contributed positively include i) Fertilizer (91 points) and ii) Automobile Assembler (24 points). Scrip-wise negative contributors were TRG (328 points), HUBC (71 points), LUCK (61 points), PPL (58 points) and PSO (51 points). Whereas, positive contributors included ENGRO (120 points), FCCL (22 points) and SRVI (20 points).

    Foreign selling continued this week clocking-in at USD 4.9 million compared to a net sell of USD 0.1 million last week. Selling was witnessed in Technology and Communication (USD 6.0 million) and Power Gen. (USD 1.4 million).

     On the domestic front, major buying was reported by Insurance Companies (USD 6.8 million) and Individuals (USD 5.4 million). Average volumes arrived at 377 million shares (down by 18 percent WoW) while average value traded settled at USD 133 million (down by 16 percent WoW).

  • FBR chairman inaugurates head office of Pakistan Single Window

    FBR chairman inaugurates head office of Pakistan Single Window

    ISLAMABAD: Muhammad Javed Ghani, Chiarman, Federal Board of Revenue (FBR) on Friday inaugurated the head office of Pakistan Single Window (PSW) Company.

     On the occasion, Chairman FBR lauded efforts of Pakistan Customs to roll out Pakistan Singe Window (PSW) System almost a year before its deadline of June, 2022 set under World Trade Organization’s Trade Facilitation Agreement. He also appreciated Customs for reducing the project cost from initial estimates of USD 163 million to USD 67 million through indigenous development effort.

    The Prime Minister had tasked Customs to complete this highly transformational project for reducing time, cost and complication while ensuring better compliances with cross border trade regulations. To ensure that this new system is timely implemented and sustainably maintained, the PSW Company has been operationalized by FBR.

    The PSW Company is now enabling the Government of Pakistan to maintain complete ownership of this mission critical system of strategic national importance as it would handle entire cross border trade, related logistics and financial transactions.

    Member Customs Operation S.M Tariq Huda stated on the occasion that Customs Administration was leveraging its expertise in automation for PSW to support a wide array of other public and private sector entities involved in regulation of imports, exports & transit trade. The ongoing digitization of related public sector entities under this project will substantially improve their efficiency.

    PSW is instrumental for Pakistan to become a preferred route for international transit and transshipment besides it will help integrate upcoming national, regional and global single window systems. PSW will boost exports, help attract FDI and enable better integration into global value chains. It will also serve as the Trade Information Portal of Pakistan.

  • Penalty amount for late return filing reduced up to 75 percent

    Penalty amount for late return filing reduced up to 75 percent

    KARACHI: Penalty amount for late return filing has been reduced up to 75 percent in order to encourage people to make compliance of mandatory filing of declaration of income.

    Sources in the Federal Board of Revenue (FBR) said that the reduction in penalty amount has been made part of the Income Tax Ordinance, 2001 and amendments have been introduced through Tax Laws (Second Amendment) Ordinance, 2021.

    They said that the penalty amount will be reduced by 75 percent in case tax return is filed within one month after the due date for filing income tax return.

    According to a commentary on Tax Laws (Second Amendment) Ordinance, 2021 released by PwC A. F. Ferguson & Co. the law prescribes penalty for non-filing of return of income within due date as under:

    a) 0.1 per cent of tax payable for the tax year under consideration for each day of default, subject to minimum penalty of Rs. 40,000 and maximum penalty up to 50 per cent of the tax payable for the tax year under consideration;

    b) In case, 75 per cent of the income is from salary, and the same is less than Rs. 5 million, minimum penalty is Rs. 5,000

    However, two new provisos have been added whereby:

    a) Minimum penalty has been prescribed at Rs. 5,000 if taxable income for the year is up to Rs. 800,000; and

    b) Amount of penalty is reduced by:

     75 per cent if the return of income is filed within one month of the due date;

     50 per cent if the return of income is filed within two months of the due date;

     25 per cent if the return of income is filed within three months of the due date.

    Watch related video on PkRevenue YouTube Channel. Please subscribe for update.

  • 100pc tax credit allowed with mandatory return filing

    100pc tax credit allowed with mandatory return filing

    KARACHI: The tax exemption regime transposed into tax credit regime and certain businesses have been allowed 100 percent tax credit with mandatory requirement of income tax return filing.

    Chartered Accountants at PwC A. F. Ferguson & Co. in a commentary on Tax Laws (Second Amendment) Ordinance, 2021 said that income / profits and gains of the following persons were exempt from tax under Part I of the Second Schedule to the Ordinance:

    (i) persons engaged in coal mining projects in Sindh supplying coal exclusively to power generation projects – clause (132B);

    (ii) a startup (as defined in section 2(62A) of the Ordinance) for the tax year in which the startup is certified by the Pakistan Software Export Board and the next following two tax years – clause (143); and

    (iii) persons deriving income from exports of computer software or IT services or IT enabled services (as defined) up to the period ending on June 30, 2025; provided that 80 percent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels- clause (133).

    Through the Amendment Ordinance, the exemptions have been transposed into tax credit regime whereby the aforementioned persons shall be allowed a tax credit equal to 100 percent of the tax payable including minimum and final taxes for the period upon fulfillment of the following conditions:

    (a) return has been filed;

    (b) tax required to be deducted or collected has been deducted or collected and paid;

    (c) withholding tax statements for the immediately preceding tax year have been filed; and

    (d) sales tax returns for the tax periods corresponding to relevant tax year have been filed.

    They said that it has also been provided that the benefit contained in this newly inserted section shall not preclude the aforesaid persons’ case from audit selection by the Federal Board of Revenue (FBR) or the Commissioner Inland Revenue.

    Since these taxpayers are now allowed 100 percent tax credit against tax payable (including minimum tax), tax exemption presently available to them (under Part I of the Second Schedule) has been withdrawn whereas relevant clauses for exemption from turnover tax of section 113(provided under Part IV of the Second Schedule) though not withdrawn have effectively become redundant.

  • Transposition of exemption into tax credit to create complications

    Transposition of exemption into tax credit to create complications

    KARACHI:  The immediate withdrawal of tax exemptions to certain business into tax credit regime may create complications for taxpayers in the income year.

    In a commentary on Tax Laws (Second Amendment) Ordinance, 2021, chartered accountants at PwC A. F. Ferguson & Co. said since the amendment ordinance has been enforced with immediate effect, businesses which have been transposed from exemption to tax credit regime would have to account for such change during the income year.

    “This would create multiple complications. Such complication would also arise for the other exemptions withdrawn/ amended with immediate effect,” they said.

    The Federal Board of Revenue (FBR) is expected to issue clarification on this matter. It is also expected that when Amendment Ordinance would be made part of forthcoming finance bill, all the amendments proposed through the Amendment Ordinance, with appropriate changes, would be suitably placed and accounted for to make these amendments effective from July 1, 2021.

    The chartered accountants said that the concept of tax credit regime was introduced few years back whereby blanket tax exemptions are codified into a tax credit regime subject to fulfilment of certain conditions.

    The change in regime in effect means that taxable income and tax liability (which is not computed under the exemption regime) is computed under the tax credit regime, against which full or partial credits are allowed.

    The tax credit regime provides a more transparent mechanism for allowing tax break. However, certain enabling amendments are required to be made to make tax credit regime more effective (e.g., provisions which allow issuance of exemption certificate do not account for or treat tax credit regime equivalent to tax exemption regime as a result of which those who avail tax credit regimes suffer tax withholdings which is eventually refundable).

  • FBR urged to restore tax exemption for inter corporate dividends

    FBR urged to restore tax exemption for inter corporate dividends

    KARACHI: Federal Board of Revenue (FBR) has been urged to restore tax exemption for inter corporate dividends, which has been abolished through Tax Laws (Second Amendment) Ordinance, 2021.

    (more…)
  • Ufone awarded contract worth Rs2.07 billion for providing mobile broadband services

    Ufone awarded contract worth Rs2.07 billion for providing mobile broadband services

    ISLAMABAD: The Universal Service Fund (USF) on Friday awarded a contract amounting Rs2.07 billion to Ufone for providing high speed mobile broadband services in Kech district of Balochistan province.

    Federal Minister for Information Technology (IT) and Telecommunication, Syed Amin Ul Haque and Federal Minister for Defence Production, Zubaida Jalal witnessed the contract signing ceremony held at the USF office.

    The contract was signed by Haaris Mahmood Chaudhary, CEO, USF with Nadeem Khan, Acting CEO & Group Chief Financial Officer, Ufone. Federal Secretary for IT and Telecommunication, Shoaib Ahmad Siddiqui and Chairman PTA, Maj. Gen (R) Amir Azeem Bajwa were also present at the ceremony.

    Sector Commander South, Brigadier Atif Bin Saeed and senior government officials from Turbat virtually attended the ceremony. Chief Guest of the ceremony, Federal Minister for IT and Telecommunication, Syed Amin Ul Haque said: “In light of the Prime Minister’s vision of Digital Pakistan, the Ministry of IT and Telecommunication through USF has awarded yet another project for the socio-economic betterment of the people of Balochistan.

    “Through the contract being awarded today, residents of Kech district will reap the benefits of High Speed Internet in a span of 12-18 months. It is our priority to ensure that Balochistan remains at the forefront of technology development as we continue to work towards building a robust Digital Pakistan. The digital connectivity will open unprecedented new possibilities for the marginalized communities of Kech district; enhancing their ability to work and transact online and engage in the digital economy.

    “I would pay my special gratitude to the Federal Minister of Defense Production, Ms. Zubaida Jalal who has played a significant role in highlighting the region for digital transformation and emphasizing on the importance of digital inclusion for the growth and prosperity of the youth.”

    The Ministry of IT and Telecommunication through USF has contracted various development projects worth approximately Rs 7 billion to provide High Speed Mobile Broadband services in districts of Chagai, Noshki, Bolan, Mastung, Panjgur, Gwadar, Ziarat, Jaffarabad and Pishin.

    These projects are expected to be completed within 12 to 18 months from the date of commencement.

    The Federal Minister for IT also said: “Today, in this regard, it is pertinent to highlight the progress of National Highways program. The Ministry of IT and Telecommunication through USF has initiated development projects worth approximately Rs1.8 billion to provide High Speed Mobile Broadband services to commuters on all National Highways in Balochistan, thereby covering a road segment of 1,780 km. NH 10 and NH 25 is 75  percent completed whereas NH 50 and NH 70 are 50 percent completed.

    Likewise, NH 25 and NH 65 are 25 percent completed. All National Highway projects will be completed within the next 6 to 9 months.”

    In Balochistan, the youth are benefiting from DG Skills and Virtual University’s education programs. So far, 25,000 youngsters have completed free licensing courses amongst others through DG Skills.

    Similarly, through Virtual University programs, offline centers have been established in 9 districts whereby thousands of students can access educational courses without any internet service.

    Four new software technology parks are being established in Quetta, Khuzdar, Turbat and Gwadar in Balochistan where in lieu of rent, the government will give a 25 % subsidy and other facilities.

    Federal Minister for IT shared that 3,500 students from Balochistan will be provided a 6 month paid internship with a monthly stipend of PKR 20,000. Other than this, new national incubation center campuses will be opened.

    With the help of Ignite, new projects for the youth in research and development will be initiated as well. Syed Amin Ul Haque stated that the people of Balochistan should not be disappointed as we are working very hard for the development of Balochistan.

    The Prime Minister is very clear in his vision that there is no national progress without progress in Balochistan. This is the reason whereby upon my instructions, Federal Secretary for IT and Telecommunication, Shoaib Ahmad Siddiqui and all attached departments working under our ministry undertook a tour to Quetta and apprised the Government of Balochistan regarding its development projects.

    While addressing the ceremony, Federal Minister for Defence Production, Zubaida Jalal thanked the Federal Minister for IT and Telecommunication, Syed Amin Ul Haque and said that the Ministry of IT’s development projects for the people of Balochistan are in line with the true spirit of Digital Pakistan and will play an important role in alleviating the marginalization of Balochistan and supporting the province to come at par with the developed world.

    She further said that I am sure that the development projects in Kech district will be completed timely and I assure you that the youth from these areas will be as capable in terms of skills, capabilities and digital proficiency as youngsters from urban cities.

    Sharing his thoughts at the ceremony, CEO USF, Haaris Mahmood Chaudhary said, “This project will benefit an unserved population of 0.34 Million, thereby covering an unserved area of 23,964 sq. km. of Kech district. Upon the directive of the Federal Minister for IT and Telecommunication, our focus on providing access and connectivity to the remote and far-flung areas of the country remains distinguished. In the last two years, USF has contracts projects worth over Rs21 billion.

    “This project has been awarded to Ufone through a through an efficient and transparent competitive bidding process. We strive to empower the people of Balochistan and bring ease into their lives through these projects.”

    Sharing his views at the ceremony, Group CFO and Acting CEO PTCL & Ufone, Nadeem Khan, said, “Ufone is dedicated to the cause of a Digital Pakistan. Our telecommunications projects in Balochistan are an attempt to make lives easier for the millions that are residing in the province.

    Through this project in the Kech district of Balochistan, we aim to provide telecom services to 306 muazas of the area. This dream would have never reached fruition without the support of USF, which has been devoted to the cause of providing connectivity in far-flung areas of Pakistan.”

    Senior officials of the IT Ministry, USF and Ufone were also present at the ceremony.

  • Share market ends down by 127 points in volatile trading

    Share market ends down by 127 points in volatile trading

    KARACHI: The share market fell by 127 points on Friday in volatile trading sessions during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,301 points from previous day’s closing of 44,428 points, showing a decline of 127 points.

    Analysts at Topline Securities said that volatility was observed during trading session as the index traded went up by 181 points and down by 230 points to close at 44,301 level.

    Lack of investor interest was witnessed in the market as volume and traded value decline by 40 percent and 45 percent on DoD basis to 266 million shares and Rs.14.35billion, respectively.

    Major contribution to the index came from COLG, LUCK, FCCL. ENGRO and HBL, as they cumulatively contributed 73 points to the index, whereas TRG, POL, DAWH, PAKT and SYS lost value to weigh down on the index by -115 points. TRG was today`s volume leader with 23 million shares.

  • FBR notifies transfer/posting of IR BS-19, BS-20 officers

    FBR notifies transfer/posting of IR BS-19, BS-20 officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified transfer and postings of Inland Revenue Service (IRS) officers of BS-19 and BS-20.

    The FBR notified the transfers and postings of following officers:

    01. Abdul Aziz Narejo (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-VI), Karachi from the post of Commissioner Inland Revenue, (Sukkur Zone) Regional Tax Office, Sukkur.

    02. Muhammad Safdar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (District Zone) Regional Tax Office, Rawalpindi from the post of Commissioner Inland Revenue, (Cantt Zone) Regional Tax Office, Rawalpindi.

    03. Abbas Ahmed Mir (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Cantt Zone) Regional Tax Office, Rawalpindi from the post of Commissioner Inland Revenue, (West Zone-III) Regional Tax Office, Islamabad.

    04. Girdhari Mal Maghwar (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (ST & FE) Federal Board of Revenue (Hq), Islamabad from the post of Chief, (Admin Pool) Federal Board of Revenue (Hq), Islamabad.

    05. Fauzia Adil (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Legal) Corporate Tax Office, Lahore from the post of Additional Commissioner Inland Revenue, Corporate Tax Office, Lahore.

    06. Mussarat Ullah Khan (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Special Zone for Builders & Developers ) Regional Tax Office, Islamabad from the post of Additional Commissioner Inland Revenue, Large Taxpayers Office, Islamabad.

    07. Muhammad Nawaz (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (West Zone-III) Regional Tax Office, Islamabad from the post of Additional Commissioner Inland Revenue, Regional Tax Office, Rawalpindi.

    08. Muhammad Saleem (Inland Revenue Service/BS-19) is presently posted as Commissioner Inland Revenue, (OPS) Commissioner Inland Revenue (Appeals-I), Multan. The officer is assigned Additional Charge of the post of Commissioner Inland Revenue (OPS) (Appeals-II), Multan as per rules.

    09. Abdul Shakoor Shaikh (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (Sukkur Zone) Regional Tax Office, Sukkur from the post of Secretary, (Admin Pool) Federal Board of Revenue (Hq), Islamabad.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.