Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Pakistan’s tax to GDP ratio improves to 9.2 per cent in FY22: FBR

    Pakistan’s tax to GDP ratio improves to 9.2 per cent in FY22: FBR

    ISLAMABAD: Pakistan’s tax to GDP ratio has improved to 9.2 per cent in the fiscal year 2021-2022, the Federal Board of Revenue (FBR) said.

    In Pakistan, although the tax to GDP ratio has been low compared to other regional countries yet if viewed over the past so many years this ratio has significantly increased.

    “The tax to GDP ratio was 4.4 per cent in 1950 which increased to 9.2 per cent in 2022,” the FBR said in a report and hoped that the continuing reform efforts are expected to further increase the Tax to GDP ratio in coming years.

    READ MORE: Pakistan customs seals over 1,600 illegal petrol pumps during FY22

    During early 50s, the main revenue collection source was the Customs Duty which was contributing 66 per cent of the total revenue while direct tax and sales tax was contributing only 12 per cent and 14 per cent of revenue respectively.

    Over the years the tax mix changed drastically. By 1995, Customs Duty share had reduced from 66 per cent to 34 per cent percent of the total revenue while direct tax and sales tax’s contribution increased to 27 per cent and 19 per cent respectively.

    READ MORE: FBR directs IR offices to avoid recovery in pending appeals

    Tax mix further changed during last two decades. By 2022, share of Sales Tax increased to 41 per cent and Direct Tax’s 37 per cent while the share of Customs Duty declined to 17 per cent.

    The FBR said that the contribution of direct and indirect taxes has changed with share of direct taxes increasing and share of indirect taxes decreasing.

    In the year 1952, the share of direct taxes was 14 per cent and the share of indirect taxes was 86 per cent. However, it was changed to the share of direct taxes to 37.2 per cent in the year 2022 as the share of indirect taxes to 62.8 per cent.

    READ MORE: FBR directs 85 big retailers to integrate businesses

    The share of withholding tax in collection of direct taxes increased phenomenally over the years. The share of withholding tax was 44 per cent of the direct taxes in the year 1985 and this share increased to 67 per cent.

    The FBR said that rebasing of national accounts affected the tax to GDP ratio adversely.

    National Accounts is a systematic framework for the presentation of statistics that provide a wide range of information about the economy. National accounts or System of National Accounts (SNA) provide a summary of national economy.

    READ MORE: FBR issues one million tax notices to enforce compliance

    There are several aggregate measures in the national accounts, most notably gross domestic product or GDP and investment. GDP at constant prices indicates economic growth to measure the performance of the economy over time or in comparison with other countries/in comparison with previous periods.

    In 2022, the National Accounts were rebased to improve the statistical representation of economy.

    In the fiscal year 2020-2021, the tax to GDP ratio decreased to 8.6 per cent as per new base year FY=2015-2016 when compared with 9.9 per cent on the basis of base year FY-2005-2006.

  • Pakistan customs seals over 1,600 illegal petrol pumps during FY22

    Pakistan customs seals over 1,600 illegal petrol pumps during FY22

    KARACHI: Pakistan Customs has sealed over 1,600 petrol pumps across the country in its drive against smuggled petroleum products.

    The Federal Board of Revenue (FBR) in its performance report for the fiscal year 2021/2022 stated that Customs authorities initiated country wide operations against illegal POL outlets during the fiscal year.

    READ MORE: FBR directs IR offices to avoid recovery in pending appeals

    FBR said that during the operation Customs sealed more than 1600 illegal outlets with criminal proceedings against owners. This initiative helped increase in legitimate imports of POL products.

    It said Pakistan Customs is the guardian of Pakistan borders against movement of contra band goods and is facilitator of bona fide trade.

    READ MORE: FBR directs 85 big retailers to integrate businesses

    Customs provides a major source of revenue to the Government of Pakistan in the form of taxes levied on the goods traded across the borders. It also helps to protect the domestic industry, discourage consumptions of luxury goods and stimulate development in the under-developed areas.

    Following initiatives taken by the Customs Administration during the TY 2022:

    First Ever Counter Smuggling Policy Laid out which is an excellent example of interagency co-operation.

    Highest Ever Counter Smuggling Seizures made (FY 2021-22: Rs. 66 billion).

    READ MORE: FBR issues one million tax notices to enforce compliance

    Countrywide Operation against Illegal POL outlets (sealing of more than 1600 illegal outlets with criminal proceedings against owners), through which, legitimate imports of POL products saw sharp surge as compared to previous financial year.

    Opening Pakistan to Central Asian Republics through simplification of Transit Procedures and Automated Clearance. Pak-Uzbekistan Transit Agreement has been finalized and deliberations have been started.

    Ease of Doing Business Indicators improved by 28 percent from 136 to 108 in 2021, which is an “unprecedented improvement” resulting into efficient Cross Border Trade.

    READ MORE: FBR unveils plan to achieve Rs7.47 trillion revenue collection target

    Pakistan Single Window Act, 2021 enacted and its rules notified and expected to be roll-out in the coming months.

    WeBOC has now been implemented at all sea-ports, dry-ports and land border stations.

    Online Payments have been introduced for the traders wherein levy-able duty and taxes on import of goods are paid online through digital banking.

    Risk Management System is part of WeBOC clearance which is continuously upgraded from time to time.

    Automated Duty Drawback Payment System: In order to facilitate the exporters, the manual rebate approval system has been replaced with RMS based, fully automated / system-based processing of duty drawback payment without involving any human intervention. Under the automated system, the exports Good Declaration is termed as Rebate request.

    Administrative Measures like auctions, recoveries, valuations etc have resulted in generation of Rs. 25 billion in FY 2021-22.

  • FBR directs 85 big retailers to integrate businesses

    FBR directs 85 big retailers to integrate businesses

    ISLAMABAD: Federal Board of Revenue (FBR) has directed 85 big retailers to integrate their businesses with the Point of Sale (POS) system.

    In this regard, the FBR issued Sales Tax General Order (STGO) No. 04 of 2023 regarding mandatory integration of Tier-1 retailers with the FBR’s POS System.

    The revenue body said that the Finance Act, 2019 added sub-section 6 to section 8B of the Sales Tax Act, 190 whereby a Tier-1 Retailer who did not integrate its retail outlet in the manner prescribed under sub-section 9A of Section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for the period would be reduced by 15 per cent. The figure of 15 per cent has been raised to 60 per cent through Finance Act, 2021.

    READ MORE: FBR issues one million tax notices to enforce compliance

    The FBR further stated that in order to operationalize the important provision of law, a system-based approach has been adopted whereby all T-IRs who are liable to integrate but have not yet integrated, with effect from July 2021 (Sales Tax returns filed in August, 2021) are to be dealt with as per the procedure laid down in STGO No. 1 of 2022 issued on August 3, 2021.

    READ MORE: FBR unveils plan to achieve Rs7.47 trillion revenue collection target

    Through latest STGO, the FBR issued a list of 85 Tier-1 retailers, directing them to integrate with the FBR system by October 10, 2022 and the procedure of exclusion from this list of 85 identified Tier-1 Retailers shall apply as laid down in STGO 17 of 2022 issued on May 13, 2022.

    READ MORE: Customs officer awarded major penalty of rank demotion

    Upon filing of sales tax return for the month of October 2022 for all hereby notified Tier-1 retailers not having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount.

  • FBR issues one million tax notices to enforce compliance

    FBR issues one million tax notices to enforce compliance

    ISLAMABAD: Federal Board of Revenue (FBR) has issued one million notices to registered taxpayers for enforcing compliance to the tax laws.

    FBR officials on Friday said that the FBR issued one million notices till June 30, 2022 in both income tax and sales tax to registered persons and entities having turnover Rs100 million and above to enforce compliance against different sections the tax laws.

    READ MORE: FBR unveils plan to achieve Rs7.47 trillion revenue collection target

    According to the FBR it had taken several measures to boost revenue.  It said number of income tax return filers for TY 2020 has crossed 3.0 million.

    FBR has embarked on a plan to integrate all sales outlets of tier-1 retailers with FBR’s central computerized system. Furthermore FBR has decided to implement Track and Trace System for specified goods/ products i.e. Tobacco, Cement, Sugar, Fertilizer and Beverages imported into or manufactured in Pakistan.

    READ MORE: Customs officer awarded major penalty of rank demotion

    The revenue body launched sectorial analysis of huge business concerns across the country by assessment and processing units in all field formations of Inland Revenue Service (IRS). Sectors like cement, sugar, cotton and tobacco remained under focus.

    Legal actions (attachment of properties, arrests and seizures) has been made against huge tax-defaulters to create deterrence against tax-evaders.

    READ MORE: FBR surpasses first quarter collection target by Rs27 billion

    The FBR also took measures in audit and accounting wing. This has been entrusted with the task of designing audit policy as an audit compliance program on yearly basis. This current year following initiatives have been taken by the Audit & Accounting Wing:

    The Audit Policy, 2020 for Tax Year 2019 is under process in view of the experience obtained from the past audit policies. In addition to that, the wing also monitors audit activities carried out in the field formation throughout the year.

    READ MORE: FBR extends return filing date up to October 31, 2022

    The FBR said this year, under DLI 6 of Pakistan Raises Revenue Program, FBR has conducted and completed 67 cases of comprehensive field audits of large taxpayers selected through the Audit Policy, 2019 for Tax year 2018 by the risk-based selection tool and monitored by the Compliance Unit through AMIS with associated reports submitted to FBR management which has been duly verified by the World Bank.

    Software solution is introduced to provide continuous monitoring of the audit cases with sufficient documentation and assistance to the auditors.

  • Govt. trying to bring down dollar price: Dar

    Govt. trying to bring down dollar price: Dar

    ISLAMABAD: Federal Finance Minister Ishaq Dar has said that the government is trying to bring down the dollar price in order to ease the inflationary pressure.

    According to state media the finance minister said the government is taking measures to bring down dollar price to 200 rupees after which the prices of daily commodities would also come down.

    He said there is also a strong will to reduce inflation from 12 to 14 per cent and giving relief to common man.

    READ MORE: PKR recovers against dollar for ninth consecutive session

    He said stabilizing national currency against US dollar would have positive impact on every citizen’s life.

    Responding to a question, Ishaq Dar said the government is committed to fulfill the agreement made with the International Monetary Fund (IMF).

    READ MORE: PKR maintains winning streak against dollar on 8th straight session

    It is worth mentioning that Pakistani Rupee (PKR) a day earlier continued recovery against the dollar for 9th straight session in the interbank foreign exchange market.

    The rupee gained 1.70 to end at PKR 223.94 to the dollar from previous day’s closing of PKR 225.64 in the interbank foreign exchange market.

    READ MORE: PKR continues upward journey for seventh consecutive session against dollar

    The local currency gained PKR 15.77 against the dollar during the last nine sessions. The exchange rate reached to near record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 223.94 on October 05, 2022.

    Currency experts said that the rupee was appreciating against the dollar due to positive sentiments following assumption of Ishaq Dar as the finance minister. Dar recently claimed that the actual value of the dollar is below PKR 200 and he vowed to bring it down.

    Meanwhile, the international oil prices also crashed which helped the rupee to make gains.

    READ MORE: Rupee gains for sixth straight session against dollar; recovers PKR 11.26

  • FBR unveils plan to achieve Rs7.47 trillion revenue collection target

    FBR unveils plan to achieve Rs7.47 trillion revenue collection target

    ISLAMABAD: Federal Board of Revenue (FBR) has unveiled strategy to achieve revenue collection target of Rs7.47 trillion during the ongoing fiscal year 2022-2023.

    Officials in the FBR on Thursday said that revenue target for 2022-2023 has been fixed at Rs7.47 trillion which demands growth of 21.5 per cent over the collection of Rs6.148 trillion made during the last fiscal year.

    READ MORE: Customs officer awarded major penalty of rank demotion

    In absolute terms, around Rs1.32 trillion additional revenues are to be collected by the FBR in the current fiscal year to meet the target.

    The target for 2022-2023 is challenging given the fact that government is focusing on controlling the current account deficit and rising inflation which would result in import contraction and slowdown in the overall GDP growth.

    READ MORE: FBR surpasses first quarter collection target by Rs27 billion

    Nonetheless, FBR is confident that its team has the ability and the resolve to accomplish this gigantic task as an upward revised target has already been achieved for the financial year ended on June 30, 2022.

    “To achieve the target several efforts are being made at policy as well as operational levels. There is focus on enhanced use of technology and a policy shift towards taxing the high-income groups through direct taxation such as the imposition of Super Tax, Poverty Alleviation Tax, revision of individual tax slabs including salaried class, increase in Federal Excise Duty (FED) on international air travel, increased tax on luxury motor vehicles etc,” according to the officials.

    READ MORE: FBR extends return filing date up to October 31, 2022

    Keeping in view the past performance of FBR and the revenue measures taken during the current budget there are high hopes of achieving the tax target for fiscal year 2022-2023.

    READ MORE: LTO Karachi collects PKR 456 billion in 1QFY23

  • Faysal Bank, K-Electric collaborate to ease customer’s payment

    Faysal Bank, K-Electric collaborate to ease customer’s payment

    KARACHI: Faysal Bank Limited (FBL), one of the leading Islamic Banks in the country, and K-Electric have come together to ease customer’s payment burden in times of economic crunch.

    As part of the collaboration, Faysal Islami Noor Card holders will now be able to pay their electricity bills through easy instalment plan options of up to 3 months. Faysal Islami Noor card has gained immense popularity amongst industry card customers because it is a Shariah compliant alternative to conventional credit cards that offers amazing discounts and offers.

    Speaking on the occasion, Head Consumer Finance (FBL), Aneeq Malik said: “Customer convenience has always been of paramount importance to the Bank and our partnership with K-Electric is a depiction of our commitment to our customers. We are confident that through the proposition will allow customers to manage their monthly expenditures in a more convenient and relaxed manner.”

    Delighted at the launch of this campaign, Chief Distribution Officer at K-Electric, Amer Zia said, “Our collaboration with Faysal Bank through this offer is another testament of our commitment towards providing maximum relief to our consumers”.

    Feroz Khan, Head Unsecured Business (FBL) further added, “We are committed to further building customer loyalty by offering the best in class products and benefits to our valued customers. This collaboration aims to ease customer expenditure on their KE billings specifically in the high billing periods.”

  • NA committee directs SBP to take action exchange rate manipulators

    NA committee directs SBP to take action exchange rate manipulators

    ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue on Tuesday directed the State Bank of Pakistan (SBP) to take appropriate action against all the banks and exchange companies involved in manipulating volatility of the exchange rate.

    The committee also directed the central bank to take appropriate action against elements involved in exchange rate manipulation so that no one dares to play with the economy of the country.

    READ MORE: PKR maintains winning streak against dollar on 8th straight session

    The committee met under the chairmanship of Member of National Assembly (MNA) Qaiser Ahmad Sheikh, here in the Parliament House.

    The committee was of the view that during recent volatility in the exchange rate and the difference between the interbank rate and the rate offered by the Exchange Companies, few banks earned exorbitant profits.

    The committee was apprised that few banks and forex exchange companies were suspected of manipulating volatility in exchange rate.

    READ MORE: PKR continues upward journey for seventh consecutive session against dollar

    The SBP taking cognizance initiated strict monitoring of the foreign exchange operations of banks and exchange companies and has initiated inquiry proceedings into the violations made against SBP regulations.

    The Governor State Bank Jameel Ahmad further apprised that SME sector was the backbone of the country’s economy which had not been provided with relevant finances which it deserved.

    He said that on basis of cash flow the SME sector can avail credit from commercial banks.

    Regarding incentives given to the industrial and trading sector during COVID-19, the Governor State Bank said that the Bank adopted multipronged approach to facilitate industrial and trading sector.

    He said that those measures included debt rescheduling, financing the large and medium industries for carrying out their operations, besides chalking out measures that helped in avoiding retrenchment during the pandemic.

    READ MORE: Rupee gains for sixth straight session against dollar; recovers PKR 11.26

    He also informed that export based industries were also promoted.

    The committee pointed that the measures taken by the SBP were exceptional but the benefits did not trickle down and financial incentives were mostly availed by large scale industry.

    The committee directed the State Bank to provide details sector wise about who benefited from those incentives.

    The committee also decided to discuss the proposed measures for rehabilitation of the flood affectees, agriculture and commercial sectors in its next meeting.

    The committee was of the view that devastation caused by floods was massive and it needed proper continuous fiscal policy measures.

    READ MORE: PKR makes recovery against dollar for fourth straight session

    While discussing the issues of SBP restriction on import of forklifts, the committee was of the view that the industry was suffering and the State Bank should look into this.

    The representatives of the Importers Association apprised that due to restrictions imposed by SBP, commercial banks had stopped confirming letters of credits (LOCs).

    The Governor State Bank informed that there was no restriction on LOCs opened before 5th July, 2022.

    The Committee meeting was attended by Members of the Committee, Minister of State for Finance, Secretary Finance, Chairman FBR, Governor State Bank and other senior officers of the concerned departments.

  • Customs officer awarded major penalty of rank demotion

    Customs officer awarded major penalty of rank demotion

    ISLAMABAD: Federal Board of Revenue (FBR) has awarded major penalty of demotion in rank to a customs officer BS-16.

    (more…)
  • Pact signed to promote STEAM education

    Pact signed to promote STEAM education

    ISLAMABAD: While transitioning from the exam-centred to learning based approach, the Ministry of Federal Education & Professional Training’s (MoFEPT) STEAM Pakistan program is focused on improving conceptual understanding and analytical skills of school children across the country, with a specific focus on girls’ education.

    Launched in early 2022, the program has already started its interventions in middle and high schools in the Islamabad Capital Territory.

    As part of the program, MoFEPT signed a Letter of Understanding (LoU) today with the Federal Government Educational Institutions (FGEI) for a roll-out of STEAM interventions across all of its high schools.

    FGEI’s Director General, Major General Muhammad Asghar, HI (M), stated that “STEAM Pakistan project will complement the various measures taken by FGEI to attain the objective of quality education and promote the conceptual learning and development of soft skills in youth”.

    The LoU intends to support FGEI’s efforts on targeting students in middle schools across its network, with MoFEPT providing technical support for systems, teacher training, and STEAM content.

    Additional Secretary Waseem Ajmal Chaudhry at the signing ceremony remarked, “It is important that we focus on our children’s learning, and today is a great opportunity for the Ministry of Federal Education to collaborate with another Ministry for this purpose. The Ministry looks forward to providing similar technical support to provinces on STEAM”.

    FGEI currently manages 190 high schools in 45 districts across all provinces and AJ&K, and a total of 311 schools (including 13 higher secondary schools) and 47 colleges across Pakistan with over 8,000 teachers and 200,000 students. FGEI operates under the aegis of Ministry of Defence.

    STEAM Pakistan is a collaborative project through which Malala Fund and partners are providing support to the Federal Ministry of Education and Professional Training to advance secondary school-aged girls’ access to science, technology, engineering, arts and mathematics education in Pakistan.