Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Weekly Review: investors to eye policy announcement

    Weekly Review: investors to eye policy announcement

    KARACHI: Investors to keep eye on inflationary pressure and subsequent monetary policy announcement during next week.

    Analysts at Arif Habib Limited said that investors should remain cautious in the upcoming week as the monetary policy committee (MPC) is meeting whereas inflationary pressure is set to rise in the backdrop of augmenting commodity prices.

    READ MORE: Stocks gain on unchanged policy rate expectations

    Moreover, talks with the IMF are expected to resume on January 28, 2022 which could have a positive impact on the market.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.1x (2022) compared to Asia Pac regional average of 13.9x while offering a dividend yield of 8.7 per cent versus 2.3 per cent offered by the region.

    The market commenced on a negative note this week. This trend continued throughout the week due to higher COVID-19 cases and an increase in global commodity prices.

    READ MORE: Bearish trend continues at Pakistan Stocks

    However, the sentiment once again turned positive on Friday as the government revised GDP numbers upwards from 3.94 per cent to 5.4 per cent. Furthermore, FDI increased 20 per cent during the first half of the fiscal year to USD 1,050 million against USD 880 million USD SPLY.

    The Pak Rupee closed below 176 for the first time in over 45 days on Monday but crept up during the week, closing at 176.24.

    Overall the market closed at 45,018 points down 745 points from last week, marking a 1.63 per cent decrease WoW.

    READ MORE: Pakistan’s stocks plunge by 674 points on high oil prices

    Sector-wise negative contributions came from i) Technology & Communication (241 points), ii) Commercial Banks (96 points), iii) Cement (69 points), iv) Refinery (65 points), and v) Fertilizer (63 points). Whereas, sectors which contributed positively were i) Oil & Gas Exploration Companies (36 points), ii) Power Generation & Distribution (7 points) and iii) Real Estate Investment Trust (6 points). Scrip-wise negative contributors were TRG (239 points), CNERGY (31 points), MCB (23 points), DAWH (22 points) and PSO (21 points). Meanwhile, scrip-wise positive contribution came from KAPCO (30 points), MARI (24 points) and BAHL (23 points).

    Foreigners remained net sellers this week, clocking-in at USD 2.09 million compared to a net buy of USD 0.53 million last week. Major selling was witnessed in OMC’s (USD 1.4 million) and Technology & Communication (USD -1.0 million). On the local front, buying was reported by Individuals (USD 12.4 million) followed by Banks (USD 5.9 million). Average volumes clocked-in at 201 million shares (down by 43 per cent WoW) while average value traded settled at USD 42 million (down by 17 per cent WoW).

    READ MORE: Stocks fall 105 points on high oil prices, COVID cases

  • FBR slaps sales tax at 17% on supply of food stuff

    FBR slaps sales tax at 17% on supply of food stuff

    The Federal Board of Revenue (FBR) has instituted a significant change in the tax structure for the supply of food items by restaurants, bakeries, caterers, and sweetmeat shops, imposing a 17% sales tax.

    (more…)
  • Committee formed to hunt tax evaders in supply chain

    Committee formed to hunt tax evaders in supply chain

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday constituted a committee to hunt for tax evaders in supply chain i.e. manufacturers, importers, distributors, retailers etc.

    According to a FBR notification, the committee shall identify wholesalers, distributors, small, medium and large manufacturers/importers who potentially have taxable income but neither, they have been brought into the tax base of Pakistan nor being part of the tax base but are evading and suppressing taxes and invoices.

    READ MORE: Retail sector’s sales worth Rs16 trillion not in tax net: Tarin

    It will define the potential target market and quantify the size of the target market.

    The committee shall develop a business plan comprising of budget pertaining to project plan, human, IT and infrastructure resources required to bring the potential target market into the tax base, in order to generate incremental tax revenue.

    It will obtain legal and regulatory protection, facilitation and support of stakeholders in order to achieve the objective in collaboration and support of the FBR.

    READ MORE: FBR enhances tax rates on motor vehicle registration

    The committee shall have mandate to define policy and rules for a licensing framework for appointment of intermediaries who will coordinate and facilitate the integration of supply chain to capture and report all sales transactions.

    It will coordinate with various associations and trade bodies to facilitate the integration of supply chains.

    The committee shall have powers of controlling, monitoring and implementation of supply chain capture integration program in coordination with the IRS Operations.

    READ MORE: FBR increases income tax to 15% on cellular services

    It will develop a correlation between invoice and digital/electronic payments for the purpose of audit, in coordination with necessary stakeholders including but not limited to State Bank of Pakistan (SBP).

    The committee shall have mandate to leverage software to capture the entire supply chain from manufacturer, distributor, wholesaler, retailer and customers to capture transactions, withholding tax information and use the developed database to capture potential taxpayers.

    READ MORE: FBR issues new FED rates on motor vehicles

    It further have mandate to leverage data analytics to capture sales tax demand on the input/output at each stage of supply chain from manufacturer to end consumer, thereby bringing unregistered distributors, sub-distributors and retailers into the tax net.

    The committee will develop organizational structure required to deliver on the above Terms of Reference (TORs) based on size of potential target market, physical dispersion of potential target market, and committed time lines for achieving TORs.

  • Budget 2022/2023 to be presented in first week of June

    Budget 2022/2023 to be presented in first week of June

    ISLAMABAD: The government has scheduled the presentation of the budget for fiscal year 2022/2023 in the first week of June 2022, the finance ministry said on Thursday.

    The finance ministry issued budget call circular 2022/2023. According to the circular, after completion of all budget documents and summaries by end of May 2022, the budget will be presented to the cabinet and the parliament in the first week of June 2022.

    The ministry said that in compliance with the Articles of the Constitution of Pakistan, Public Finance Management Act, 2019 and Budget Manual 2020, Finance Division prepares budget for each financial year as a key policy document of the federal government.

    READ MORE: MoC invites tariff proposals for budget 2022/2023

    The budget call circular containing budget calendar, processes, instructions, forms for preparation and submission of detailed budget Actual (FY 2020-21), Revised Estimates (FY 2021-22) and Budget Estimates (FY 2022-23) relating to Receipts, Current and Development Expenditure of the Federal Government is attached herewith.

    The Medium Term Indicative Budget Ceilings (IBCs) issued by Budget Wing, Finance Division in April, 2021, for Current and Development Budget for three years i.e. 2021-22, 2022-23 and 2023-24, may be considered as base line for submission of Budget Estimates.

    READ MORE: FBR invites customs proposals for budget 2022/2023

    Receipts, Current and Development Expenditure Estimates (Forms I – III) may be provided to Budget Wing, Finance Division before 15th March, 2022 by the respective Principal Accounting Officer (PAO). The remaining information may also be provided as per schedule given in Budget Calendar.

    Foreign Exchange Budget Actual (FY 2020-21), Revised Estimates (FY 2021-22) and Budget Estimates (FY 2022-23) may also be provided as per attached FEB Forms (I-VI) in accordance with the specific instructions and general guidelines.

    READ MORE: SRB invites proposals for Budget 2022-2023

  • FBR enhances tax rates on motor vehicle registration

    FBR enhances tax rates on motor vehicle registration

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday notified the enhanced rates of advance tax on those vehicles, which sold prior to first registration.

    The tax rates have been enhanced through Finance (Supplementary) Act, 2022 through making amendment in Section 231(B)(2A) of Income Tax Ordinance, 2001.

    The FBR said that advance tax on vehicle registration under Section 231(B)(2A) of the Ordinance has been increased for the persons who register such motor vehicles which have been sold prior to their first registration.

    READ MORE: FBR increases income tax to 15% on cellular services

    The FBR issued Circular No. 12 of 2012 to explain amendments in the Income Tax Ordinance, 2001 made through Finance (Supplementary) Act, 2022.

    The purpose is to discourage huge ‘on money’ on such vehicles which are booked by investors as a result of which the vehicles remain unavailable to the genuine buyers.

    READ MORE: FBR issues new FED rates on motor vehicles

    New rates under Division VII of Part IV of First Schedule to the Ordinance shall be as following:

    01. Motor vehicle with engine capacity up to 1000CC, the advance tax has been increased to Rs100,000 from Rs50,000.

    02. Motor vehicle with engine capacity between 1001cc to 2000cc, the advance tax has been increased to Rs200,000 from Rs100,000.

    03. Motor vehicle with engine capacity 2001cc and above, the advance tax has been increased to Rs400,000 from Rs200,000.

    READ MORE: Banks to share business account details to FBR

  • FBR increases income tax to 15% on cellular services

    FBR increases income tax to 15% on cellular services

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said the advance income tax on cellular services has been increased to 15 per cent from 10 per cent.

    The FBR issued Circular No. 12 of 2022 to explain amendments to Income Tax Ordinance, 2001 made through Finance (Supplementary) Act, 2022.

    The increase in advance tax rate on cellular service would generate additional 4.5 billion for the FBR.

    READ MORE: FBR issues new FED rates on motor vehicles

    The changes in the withholding tax regime on usage of internet and mobile phones services were introduced through the Finance (Supplementary) Bill, 2021, which was later approved by the national assembly.

    The FBR said that through the Finance Act, 2021 federal excise duty (FED) was levied on telecom services. However, telecom companies challenged the duty and got a favourable decision.

    “A marginal increase in adjustable advance tax has been proposed from 10 per cent to 15 per cent to make up for revenue loss from telecos,” the FBR added.

    READ MORE: Banks to share business account details to FBR

    The FBR collects the advance tax on telephone and internet users under Section 236 of Income Tax Ordinance, 2001.

    According to the ordinance:

    “Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of – (a) telephone bill of a subscriber; (b) prepaid cards for telephones; (c) sale of units through any electronic medium or whatever form ; and (d) internet bill of a subscriber; and (e) prepaid cards for internet.

    (2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

    READ MORE: Debt, credit card machines must for POS retailers: FBR

    (3) The person issuing or selling prepaid cards for telephones or the internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

    (3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

    (4) Advance tax under this section shall not be collected from the Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.”

    READ MORE: FBR slashes sales tax rates on petrol, HSD

  • SBP issues KIBOR rates on January 20, 2022

    SBP issues KIBOR rates on January 20, 2022

    KARACHI: State Bank of Pakistan (SBP) on Thursday issued the Karachi Interbank Offered Rates (KIBOR) as of January 20, 2022.

    Following are the latest KIBOR rates:

     TenorBIDOFFER
    1 – Week9.6210.12
    2 – Week9.6910.19
    1 – Month9.8010.30
    3 – Month10.1810.43
    6 – Month11.2011.45
    9 – Month11.2411.74
    1 – Year11.2911.79
    SBP issues KIBOR rates on January 19, 2022
  • FBR issues new FED rates on motor vehicles

    FBR issues new FED rates on motor vehicles

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued new rates of Federal Excise Duty (FED) on imported and locally assembled motor vehicles.

    The FBR revised upward the FED rates after the implementation of Finance (Supplementary) Act, 2022. In this regard the FBR issued Circular No. 06 of 2022.

    Through S. No. 55, 55B, 55C and 55D of Table-1 of the First Schedule to the Federal Excise Act, 2005, the rates of FED on imported, locally manufactured motorcars/SUVs, imported and locally manufactured double cabin are provided respectively.

    READ MORE: Banks to share business account details to FBR

    In order to rationalize the existing rates of FED on vehicles, the following increase in the various slabs has been made:

    Imported motor cars, SUVs and other motor vehicles:

    (a) of cylinder capacity up to 1000cc the FED rate has been kept unchanged at 2.5 per cent ad valorem.

    (b) Of cylinder capacity from 1001cc to 1799cc the FED rate has been increased to 10 per cent ad valorem from 5 per cent.

    (c) Of cylinder capacity 1800cc to 3000cc the FED rate has been increased to 30 per cent ad valorem from 25 per cent.

    READ MORE: Debt, credit card machines must for POS retailers: FBR

    (d) Of cylinder capacity exceeding 3001cc the FED rate has been increased to 40 per cent ad valorem from 30 per cent

    Locally manufactured or assembled motor cars, SUVs:

    (a) Of cylinder capacity up to 1300cc has been rationalized at 2.5 per cent. Previously, the FED was zero per cent on up to 1000cc and was 2.5 per cent on 1001cc to 2000cc.

    (b) Of cylinder capacity from 1301cc to 2000cc the FED rate has been increased to 5 per cent ad valorem from 2.5 per cent.

    (c) Of cylinder capacity 2001cc and above the FED rate has been enhanced to 10 per cent ad valorem from 5 per cent.

    READ MORE: FBR slashes sales tax rates on petrol, HSD

    Imported double cabin (4X4) pickup vehicles, the FED has been increased to 30 per cent ad valorem from 25 per cent.

    Locally manufactured double cabin (4X4) pickup vehicles except the vehicles booked on or before June 30, 2020 subject to the restriction or conditions specified by the FBR, the FED has been increased to 10 per cent ad valorem from 7.5 per cent.

  • FPCCI proposes charter to protect economy from politics

    FPCCI proposes charter to protect economy from politics

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed a charter to protect the economy from any political or policymaking unpredictability.

    Acting President FPCCI, Khawaja Shahzeb Akram, proposed a non-political, inclusive, sustainable and legally-binding ‘Charter of Economy’ to forge an across the board contract and unflinching commitment towards economic growth, development and equality. He said that the aforementioned charter should encompass all sectors of the economy and all segments of the society.

    READ MORE: Banks not issuing forms for land trade with Turkey: FPCCI

    Akram in a statement on Thursday said that the draft of the Charter of Economy has been prepared by FPCCI with a high-degree of diligence, meticulous efforts, attention-to-detail, studying best-practices from across the globe and a thorough input from the business community from all sectors and segments of the economy.

    FPCCI’s Acting Chief added that the aim of the charter is to protect the economy from any political or policymaking unpredictability; and, ensure provision of a business and economic environment where all investors, entrepreneurs, businessmen, traders and industrialists should feel confident and motivated to plan their businesses for the long-term.

    READ MORE: FPCCI suggests regulating cryptocurrencies in Pakistan

    There should be no fear of a rollback in tax holidays or waivers; no strains of erratic new or ad hoc taxation; no imposition of unfair regulatory regimes; no harassment, bribes or corruption; no unhealthy or uncompetitive governmental policies; no ludicrously expensive utilities and no unstable political environs that destabilize the business sentiments.

    Acting President FPCCI stated that a country should reward investors, inventors, entrepreneurs, SMEs, employment generation activities, exporters & foreign-exchange-earners and taxpayers who actually run the country through their services and contributions.

    READ MORE: FPCCI urges measures to overcome gas crisis

    Akram maintained that all political parties; whether in the government or opposition; should single-mindedly support FPCCI’s proposal to have a Charter of Economy in the supreme national interest and to save the economy of Pakistan from the ever-yawning existential challenges. He added that all institutions of the state should also come together to support the all-out efforts for the rejuvenation of the national economy.

    He explained that the real job of the government and all its institutions is to provide an enabling environment for the businesses; cut costs of doing business and support ease of doing business. Pakistan’s business community is resilient, capable and experienced enough to take care of the rest; and, produce enough business and economic activity to put Pakistan on a sustainable high-growth trajectory.

    READ MORE: FPCCI demands consultations on planned mini-budget

    Sultan Rehman, Coordinator FPCCI Head Office, emphasized that FPCCI is the apex representative body of the entire business, trade and industrial communities of Pakistan; and, it has the mandate, capability and experience to bring them all together to sit with all the stakeholders of the state to express their full support towards the proposed Charter of Economy.

  • Banks to share business account details to FBR

    Banks to share business account details to FBR

    KARACHI: It has been made mandatory for banks to provide details of business accounts every month to the Federal Board of Revenue (FBR), official sources said on Wednesday.

    This is the additional information to be submitted by the banks along with details already mandatory for the financial institutions.

    READ MORE: Digital payments defined through Finance Supplementary Act 2022

    To make the requirement mandatory, Section 165A of the Income Tax Ordinance, 2001 has amended through Finance (Supplementary) Act, 2022.

    A new clause (f) has been inserted to the Section 165A under which the banks shall provide a list of persons containing particulars of their business accounts opened or re-designated during each preceding calendar month.

    READ MORE: Digital tax monitoring yields Rs32.43bn from sugar sector

    The Section 165A of the Income Tax Ordinance, 2001 deals with furnishing of information by banks:

    “(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

    READ MORE: Finance (Supplementary) Bill gets presidential approval

    (a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month;

    (b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

    (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;

    (d) a list of persons receiving profit on debt and tax deductions thereon during preceding financial year.

    (e) omitted

    (2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.

    (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.

    READ MORE: Supplementary bill aimed at documenting economy: Tarin

    (4) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.

    Tax experts at PwC A. F. Ferguson & Co. said that the change is in-line with the requirement for declaration of the business bank account under the provisions of section 114A introduced through the Finance Act, 2021 and is a step towards documentation of the economy.