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Author: Mrs. Anjum Shahnawaz

  • Textile exports surge to record high $11 billion in 7MFY22

    Textile exports surge to record high $11 billion in 7MFY22

    KARACHI: The exports of textile products have witnessed sharp increase of 25 per cent to $11 billion during first seven months (July – January) 2021/2022 7MFY22, according to data of the Pakistan Bureau of Statistics (PBS) released on Wednesday.

    The exports of textile products were $8.76 billion in the same months of the last fiscal year.

    READ MORE: SBP expands export finance scheme to improve inflows

    In Pak Rupee (PKR) terms, the same has clocked in at Rs1,861 billion, up 30 per cent YoY due to 4 per cent currency devaluation, analysts at Topline Securities said.

     During 7MFY22, key export driver was increase in value-added exports where knitwear segment contributed the most as it increased by 33 per cent YoY to $2.9 billion followed by Ready-made garments (+22 per cent YoY to $2.2 billion) and Bedwear (+19 per cent YoY to $1.9 billion) exports, respectively.

    On MoM basis, Pakistan textile exports is down 4 per cent to $1.5 billion in Jan-2022, led by lower value-added exports segments mainly in Knitwear (down 12 per cent MoM) and Ready-made garments (down 4 per cent MoM) respectively.

    READ MORE: PHMA cries foul on gas suspension to textile industry

    Compared to last year, Pakistan textile exports are up by 17 per cent YoY (29 per cent YoY up in PKR terms) in Jan-22 led by significant recovery witnessed in value-added segments, largely in knitwear (up 19 per cent YoY), Ready-made (up 17 per cent YoY) and Bedwear (up 21 per cent YoY).

    Increased volumetric growth and improved pricing were the key drivers resulting in higher exports.   

    Going forward, the analysts expect textile exports to keep robust in ongoing FY22 fiscal year to clock in at $18.5-19 billion.

    Ease of lockdown in European economies is likely to drive increased orders and help overall textile exports, the analysts added.

    The Federal Cabinet on February 15, 2022 has finally approved the Textile and Apparel Policy 2020-25, after Ministry of Commerce (MoC) submitted the revised draft of textile policy to Economic Coordination Committee (ECC) incorporating few amendments.

    READ MORE: Textile exporters urge allowing cotton import from India

    The key reason behind the late approval was the dispute between MoC and Energy Ministry on the issue of Energy Tariffs (RLNG and Electricity).

    As per reports, the updated draft stated that Energy Tariffs (RLNG and Electricity) will be provided to textiles and apparel industry at regionally competitive rates during the policy years. For this, tariff will be reviewed and announced in federal budget by Finance Division.

    As per Pakistan Institute of Development Economics (PIDE), the average regional electricity tariff rate stood at 7.4 cents/kWh in Mar-21, which we believe has likely increased since than. Pakistan’s current electricity tariff is around 9 cents/Kwh. 

    READ MORE: Gas shortage created purposely for using RLNG: KCCI

    In case of RLNG, the average regional RLNG rate stood at $4/MMBTU as per PIDE as compared with Pakistan’s tariff rate at $6.5/MMBTU. The analysts believe the above stated textile policy will have a neutral impact on the sector. Given, Pakistan is already offering subsidized energy & RLNG tariffs to textile players and Pakistan being part of an IMF program, a further reduction from the current levels is highly unlikely. 

    RLNG tariff is expected to remain intact at $6.5/MMBTU level although regional average is comparatively low. To note, RLNG is currently being provided at $9/MMBTU to textile sector till March-22 due to supply issues.

  • FBR makes rules for sealing retail outlets

    FBR makes rules for sealing retail outlets

    ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday notified rules for sealing and de-sealing business premises of Tier-1 retailers.

    In this regard the FBR issued SRO 252/2022 to make amendments in Sales Tax Rules, 2006. Through the amendments, a new chapter has been introduced namely, ‘Procedure for Sealing and De-sealing of Business Premises of Tier-1 Retailers.’

    READ MORE: FBR announces prize winners in second POS invoice balloting

    The FBR said that the new chapter shall apply to the following persons, namely:

    1. Any person who is integrated for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the board or its computerized system, conducts such transactions in a manner so as to avoid monitoring, tracking, reporting or recording such transactions, or issue an invoice which does not carry the prescribed invoice number or barcode or QR code or bears duplicate invoice number or counterfeit barcode or QR code; and

    2. Any person who is required to integrate his business as stipulated under sub-section (9A) of Section 3 read with sub-section 43A of Section 2 but fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under the law and rules made thereunder.

    READ MORE: FBR announces winners of first POS prize draw

    According to procedure for sealing of business premises of integrated Tier-1 retailers, the business premises of such person shall be liable to be sealed in the manner prescribed under:

    1. The commissioner Inland Revenue, in whose territorial jurisdiction the business premises of Tier-1 retailer is located, may initiate proceedings for sealing of the business premises on the basis of information that such person was found involved in the issuance of tax invoice that does not carry the invoice number or QR Code as prescribed, bears duplicate invoice number or counterfeit QR Code, the invoice is defaced, or there is any other evidence of tempering;

    2. The information referred may be required in the following manner:

    (i) Reported as unverified on ‘Tax Asaan’ application or POS Dashboard;

    (ii) Physically available or acquired through mystery shopping as referred in sub-section 2 of section 56 of the Sales Tax Act, 1990; or

    (iii) Through any other reliable source.

    3. The Commissioner Inland Revenue concerned shall verify any invoice through invoice number or QR code before declaring it unverified;

    4. Where the commissioner Inland Revenue has evidence as provided, that a Tier-1 retailer has either issued three unverified invoices in a day or five unverified invoices in seven days against a single STRN, the Commissioner Inland Revenue shall seek the approval of the Chief Commissioner Inland Revenue in writing for sealing of the retailer’s business premises besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises:

    Provided in case the unverified invoices belong to a business premises of Tier-1 retailer having jurisdiction in some other filed formation, the commissioner Inland Revenue concerned shall seek approval from the Chief Commissioner Inland Revenue in whose jurisdiction the integrated Tier-1 retailer falls besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises;

    (5) The Chief Commissioner Inland Revenue, in whose jurisdiction the integrated Tier-1 retailer falls, shall on receipt of request for approval, issue an order in writing for allowing or disallowing the sealing of such business premises after recording the reasons therein, and, in case of allowing sealing of business premises, shall also notify the team for carrying out the process of sealing immediately:

    Provided where the jurisdiction of Tier-1 retailer falls in some other field formation, the concerned Chief Commissioner shall request the FBR for notification of the team;

    (6) The Chief Commissioner Inland Revenue in whose jurisdiction the integrated Tier-1 retailer falls shall decide whether one or more branches are to be sealed depending on the unverified invoices issued by the respective branches; and

    (7) The sealing order shall be communicated by the concerned Chief Commissioner Inland Revenue to the Member (IR-Operations) for information and a copy thereof shall be sent to Chief (POS) for record.

    Through the instant SRO 252/2022 the FBR also issued procedures for sealing of business premises of non-integrated Tier-1 retailers and de-sealing of business premises of integrated Tier-1 retailers.

  • Stocks shed 47 points on inflation concerns

    Stocks shed 47 points on inflation concerns

    KARACHI: Pakistan stocks have declined by 47 points on Wednesday owing to inflation concerns following hike in domestic fuel prices.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) ended at 45,685 points as against 45,732 points, showing a decrease of 47 points.

    READ MORE: KSE-100 index gains 88 points in range-bound trading

    Analysts at Arif Habib Limited said that the market witnessed another range-bound session today due to inflationary concern arising from higher fuel prices.

    Index opened on positive note at the start of trading session but closed with negative 46 points.

    READ MORE: Stocks plunge 435 points on rising international oil prices

    In cement sector, PIOC remained under pressure despite of financial result in line with market expectations. Main board activity remained dull.

    In last trading hour, Investors opted for profit-taking which led the market to close in the red zone.

    READ MORE: Stocks gain 139 points in range-bound trading

    Sectors contributing to the performance include Commercial Banks (-28.1 points), Cement (-28.1 points), OMC (-12.4 points), E&P (-6.0 points) and Sugar (-4.5 points).

    Volumes decreased from 274.6 million shares to 145.3 million shares (-47.1 per cent DoD). Traded value also decreased by 38.8 per cent to reach US$ 23.5 million as against US$ 38.5 million.

    Stocks that contributed significantly to the volumes include KEL, WTL, FABL, HUMNL and BOP.

    READ MORE: Stocks plummet by 400 points in dull trading

  • KATI strongly criticizes hike in petroleum prices

    KATI strongly criticizes hike in petroleum prices

    KARACHI: Korangi Association of Trade and Industry (KATI) in a statement on Wednesday strongly criticized the government for the substantial increase in petroleum prices.

    Ms. Maheen Salman, acting president of KATI said that increase in prices of petroleum products by the government more than Rs 12 per liter is unacceptable and unbearable.

    READ MORE: Pakistan raises petrol price to record high at Rs160/liter

    She said that the price of petrol in the history of the country has crossed the highest level of Rs150 liter and reached a PKR 160 per liter which is alarming. Earlier, the price of petrol was beyond the purchasing power of the people.

    Maheen Salman said that due to the policy of the government, the inflation for the lower income group had gone up to 21 percent and now the recent increase in petroleum products will further increase the inflation which will severely affect the middle class and upper-middle-class including the poor.

    READ MORE: Korangi Association flays key policy rate hike

    Acting President KATI said that inflation has broken the back of the low-income group. There are no steps being taken by the government to provide some relief to the poor.

    Maheen Salman further said that the statement of the Finance Minister came out in the assembly that the IMF has strict conditions to withdraw the subsidy from the people.

    READ MORE: Around 65,000 industry workers vaccinated: KATI

    In such a situation, the government is increasing inflation on a daily basis but the means for the increase in revenue are not being created.

    Job opportunities are dwindling, industries are closing, flight of investment is all-time high, so how can the country develop. She appealed to the government to keep the inflation rate in line with the purchasing power of the people.

    READ MORE: KATI seeks precautionary measures before rains

  • Sindh extends date for filing sales tax return

    Sindh extends date for filing sales tax return

    KARACHI: Sindh Revenue Board (SRB) on Wednesday extended the last date for making deposit and filing monthly sales tax return for January 2022.

    The SRB issued Circular No. 02/2022 for extension in the last date for e-deposit of Sindh sales tax for the tax period January 2022 and for e-filing of tax return for the tax period January 2022.

    The provincial revenue body allowed the registered persons, including the withholding agents covered by the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, to:

    READ MORE: Tax officials barred from direct freezing bank accounts

    — e-deposit the amounts of Sindh sales tax for the tax period January 2022 on or before Monday February 21, 2022

    — e-file their tax returns for the tax period January 2022 on or before Thursday February 24, 2022.

    READ MORE: SRB implements verification system for utility invoices

    The SRB also intimated the taxpayers that the Federal Board of Revenue (FBR) has developed a National Sales Tax return which is in the process of implementation.

    As agreed by FBR, this return is only applicable to FBR registered persons at this stage. FBR is in the process of consultation with the provinces for extension of the National Sales Tax Return to the Provinces.

    In view of above, in order to avoid any problem, all persons registered with SRB are requested to continue filing their Sindh sales tax returns in the form SST-03 on SRB portal i.e. http://e.srb.gos.pk in accordance with the provisions of the Sindh Sales Tax on Services Act, 2011, and the rules made thereunder.

    SRB shall advise SRB-registered persons when Single National Sales tax Return is fully developed by FBR / PRAL in consultation with the provinces and after proper user acceptance tests are carried out.

    Any departure from above advice may entail contravention proceedings by officers of SRB for non-filing of the prescribed return with SRB, which may lead to imposition of penalty and other related consequences.

  • FBR announces prize winners in second POS invoice balloting

    FBR announces prize winners in second POS invoice balloting

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday announced winners of second balloting of invoices issued by Point of Sales (POS) installed by Tier-1 retailers.

    Muhammad Aslam has been declared as winner of bumper prize worth Rs1 million in the second draw. The invoice declared for the bumper prize was issued by Tier-1 retailer i.e. Naheed Super Market.

    The revenue body also declared Syed Asim Ali and Asad Naeem Chaudhry for second prize of Rs500,000 each.

    For further details please download the second draw

    Meanwhile, the FBR announced four names for the winners of third prize of Rs250,000 each. The winners of third prize are included Muhammad Amir, Syed Ali Yawar, Mubashir Aftab Sheikh and Iftikhar Hussain.

    The FBR encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.

    READ MORE: FBR announces winners of first POS prize draw

    The FBR previously issued a procedure for participating in the prize scheme.

    The revenue body said that the customers of the integrated tier-1 retailers, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.

    The customers shall verify the electronically generated invoice of integrated retailers either through the “tax asaan” application or by sending SMS to number 9966.

    READ MORE: Prize scheme on invoices issued by retailers

    The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.

    In case of a verified invoice, the customer shall furnish one time, the following detail to the online system, namely:- Name; CNIC; and Mobile number.

    Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.

    In case of an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry and take appropriate action under the relevant provisions of law.

    READ MORE: FBR launches prize scheme for POS customers

    The computerized draw for the prizes shall be held in the first week of every month at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.

    Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.

    The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.

  • Pakistan raises petrol price to record high at Rs160/liter

    Pakistan raises petrol price to record high at Rs160/liter

    ISLAMABAD: Pakistan on Tuesday sharply increased the price of petrol to a new record high level at around Rs160 per liter in the wake of surge in international oil prices.

    According to a statement issued by the Finance Division, the government has announced a massive increase in all the petroleum products effective from February 16, 2022.

    READ MORE; Petroleum prices kept unchanged for next fortnight

    The government increased the rate of petrol by Rs12.03 to Rs159.86 from Rs147.83. The rate of high speed diesel has been enhanced by Rs9.53 to Rs154.15 from Rs144.62. The government increased the price of kerosene oil by Rs10.08 to Rs126.56 from Rs116.48. Similarly, the rate of light diesel oil has been increased b Rs9.43 to Rs123.97 from Rs114.54.

    READ MORE: Pakistan’s petrol price rises to record high at Rs147.83

    The finance division in the press release said that the price of petroleum products were showing drastic increase in the international markets and presently are at the highest level since 2014.

    “Despite the unabated increase since the beginning of the year, Prime Minister Imran Khan deferred the last review of petroleum products prices on January 31, 2022 and advised against the summary of Oil and Gas Regulatory Authority (OGRA).”

    READ MORE: Prices of all POL products increased to wish New Year

    In order to provide utmost relief to the consumers, the government levied zero per cent sales tax and reduced petroleum levy rate against the budgeted targets.

    Resultantly, the government is bearing the revenue loss of Rs35 billion (fortnightly) on account of budgeted to existing petroleum levy and sales tax rates.

    READ MORE: Petrol price reduces to Rs140.82 per liter

    The finance division said that in the fortnightly review of petroleum products prices, the Prime Minister has considered the recommendations to increase the prices of petroleum products in line with change in the international oil prices. “Despite the increase in the prices of petroleum products, petroleum levy and sales tax have been kept to the minimum,” it added.

  • Gwadar Customs seizes opium worth Rs80 million

    Gwadar Customs seizes opium worth Rs80 million

    ISLAMABAD: The anti-smuggling team of Gwadar Customs Collectorate has confiscated a huge quantity of opium and a vehicle, which have worth of Rs80 million, a statement said on Tuesday.

    The Federal Board of Revenue (FBR) in the statement said that the Gwadar collectorate had made seizure in a successful operation on February 13, 2022.

    READ MORE: Peshawar Customs seizes narcotics worth Rs80 million

    In pursuance of a credible information, the ASO team of Collectorate of Customs, Gwadar has effected seizure of narcotics (255 KGs Opium) at Ganz in the wake of a long chase.

    During patrolling, Customs Staff spotted a coure car around Jiwani which was signaled to stop for search. However, the driver of the vehicle accelerated and attempted to take away the vehicle which was followed and intercepted at Ganz.

    READ MORE: FBR invites applications for 952 vacant posts in Pakistan Customs

    The driver of vehicle taking advantage of the darkness left the vehicle and fled away from the scene.

    However, the thorough search of the vehicle resulted in the recovery of 255 KGs of Opium. The recovered narcotics was later on shifted to Custom House, Gwadar.

    This Collectorate has lodged a FIR against the unknown persons and the proceedings have been initiated. The amount of the narcotics along with the seized vehicle in the international market comes to be Rs. 80 millions.

    READ MORE: Customs to auction huge lot of motor vehicles on Feb 15

    The Chief Collector of Customs (Balochistan) Muhammad Sadiq & the Collector of Customs, Gwadar Ch.Muhammad Javaid have appreciated the feat of the Customs Staff and have congratulated them on seizure of narcotics.

    It is pertinent to mention that the FBR is following a policy of zero tolerance against smuggling and thereby has increased vigilance and surveillance of cargo movement across the border.

    READ MORE: FBR explains amendments to Customs Act 1969

    Finance Minister, Shaukat Tarin, has commended FBR for its successful anti-smuggling drive across Pakistan. Likewise, Chairman FBR/Secretary Revenue Division, Dr. Muhammad Ashfaq Ahmed has appreciated Member Customs (Ops) FBR, Syed Muhammad Tariq Huda, in ensuring zero tolerance against smuggling of all shades and grades. He further reiterated his unflinching resolve to fight the menace of smuggling across the country in order to maximize tax compliance.

  • Tax offices fail to meet target of integrating retailers

    Tax offices fail to meet target of integrating retailers

    ISLAMABAD: The Federal Board of Revenue (FBR) has expressed annoyance over the lack of interest shown by field offices in integrating Point of Sale (POS) of Tier-1 retailers with the online tax system.

    According to an official document related to Tier-1 Retailers POS Integration – Third Quarter Targets (January 2022), the analyses revealed except for Large Taxpayers Office (LTO) Karachi and Regional Tax Office Bhawalpur, “none of the formations have achieved their assigned targets.”

    READ MORE: FBR issues list of 1,358 retailers for mandatory POS

    “This is an alarming situation which reflects negatively on the commitment on you formations,” the FBR informed the tax offices.

    The FBR directed Chief Commissioners Inland Revenue of tax offices to personally look into the state of affairs and ensure a healthy figure of Tier-1 Retailers POS Integration against the assigned monthly targets.

    READ MORE: Prize scheme on invoices issued by retailers

    The Member Inland Revenue – Operations has shown displeasure over the slow pace of integration of Tier-1 retailers, notified through Sales Tax General Orders (STGOs). “… These monthly targets are based on STGO and poor percentage of integration in January 2022 indicates lack of commitment of field formations both in integrating the Tier-1 retailers cleansing of STGOs list of taxpayers,” the official document added.

    READ MORE: FBR decides penal action against defaulting retailers

    According to the details, the tax offices were required to integrate 2828 Tier-1 retailers but those offices were able to integrate only 407 retailers during the month of January 2022.

    READ MORE: Imprisonment for retailers on tax integration failure

  • FBR launches forensic audit of WeBOC

    FBR launches forensic audit of WeBOC

    ISLAMABAD: The Federal Board of Revenue (FBR) has launched forensic audit of Web Based One Customs (WeBOC) to determine the accuracy and correct application of duty and taxes.

    In order to conduct forensic audit, the FBR invited firms for the assignment to conduct audit of the internal controls of WeBOC system for quality assurance for the year 2020/2021, 2019/2020 and 2018/2019.

    READ MORE: Peshawar Customs seizes narcotics worth Rs80 million

    The forensic audit is aimed at assuring that the mechanism of internal controls, business decisions, rules, policies, and procedures are well defined, correctly calculated, and if not then recommend possible solution/ way forward.

    It is meant to analyze that the systems in place are capable – fully automated with seamless integration of all Customs’ business processes.

    The applicant firm is expected to analyze the WeBOC’s capability in carrying out the day-to-day functions, its governance model, business rules, duty calculation across all regimes, correctness of information as an output, and security structures etc.

    READ MORE: No promotion of IRS officers without asset declaration

    The Internal Control Audit will identify the strengths and weaknesses as follows and recommend appropriate actions to FBR, namely:

    i. Whether the rates of Customs Duties, Additional Customs Duties and Regulatory Duties are properly and correctly fed vis-à-vis updated from time to time as applicable in the System?

    ii. Whether the WeBOC System correctly calculates and collect the duties as per statutory rates?

    iii. Review the feeding, calculation, and collection of domestic taxes i.e., Sales Tax, Withholding Tax and Federal Excise Duty at import stage.

    iv. Examine the correctness of feeding of Fifth Schedule in the WeBOC along with its conditions, when and where applicable.

    v. Whether rates of duties and taxes were updated in the WeBOC as and when legally changed since January 01, 2018?

    READ MORE: FBR announces sharp cut in sales tax on POL products

    vi. The firm will also examine and audit whether different SROs have been correctly fed/ updated in the System along with respective conditions. Any difference or deviation in the SROs feeding/ updating and application in the System will be reported accordingly.

    vii. Whether changes were made in the System with corresponding changes in the SROs from time to time in a correct and timely manner?

    viii. Whether Valuation Rulings (VRs) issued by the Directorate General of Customs Valuation have been properly entered into the System?

    ix. Whether the System correctly applies the VRs on the respective goods or not? The required audited period will be for a period of three years.

    Based on the indicated activities, the audit should: (i) map the involved internal control mechanisms; (ii) point out the main weaknesses of the involved internal controls; (iii) identify the main causes; and (iv) propose mitigation measures. The audit and subsequent recommendations should be both quantitative and qualitative considering efficiency and effectiveness of the system, its performance, and corresponding data (input)/ information (output) correctness – real-time and secured operations.

    READ MORE: IR offices to work on Saturdays for revenue target

    The FBR under the Component-II (Technical Assistance) of the Pakistan Raises Revenue (PRR) project requests the services of a reputable consulting firm to conduct a forensic audit of the WeBOC System of FBR for quality assurance through methodological testing.

    The WeBOC system was rolled out in 2012 and has been designed and developed as per the business requirements and vision of Customs i.e., paperless, end-to-end integration, minimum dwell time, 24/7 service, transparency, automated and simplified procedures, improved risk management system including automated feedback mechanisms, better controls, electronic filing, minimum interaction with trader and Customs authorities, efficient information management system, e-gates, online payment, and single window operations.

    The underlying idea was/ is to have compliance of international trade facilitation agreements and to develop Customs system in line with international good practices. It provides real time integration of clearing agents, traders, brokers, terminal operators, cargo handlers, shipping agents, bonded carriers, warehouses, airlines, and customs officials for the clearance of trade consignments.