ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday has taken major decision to ban removal of sugar bags from factory premises without affixation of tax stamp.
The condition has been imposed to implement track and trace system for monitoring of production and supply of the commodity for the crushing season 2021-2022.
In order to implement the decision the FBR issued Sales Tax General Order (STGO) No. 05 on November 11, 2021. “No sugar bags shall be allowed to be removed from a production site, factor premises or manufacturing plant without affixation of tax stamps/Unique Identification Marking (UIMs) with effect from November 11, 2021, which are to be obtained/procured from FBR’s Licensee M/s. AJCL/MITAS/Authentix Consortium,” it said.
The purpose of imposing the condition is to launch electronic monitoring of the commodity as the sugar crushing for the season 2021-2022 is about to start.
Sources in the FBR said that the track and trace system was not fully installed at sugar mills. There are still few sugar mills that were in process to install the electronic monitoring system.
In the meantime, the FBR may also deploy tax officials at the sugar mills by invoking Section 40 B of the Sales Tax Act, 1990 for parallel monitoring.
ISLAMABAD: Saudi Arabia will disburse cash deposits to Pakistan under assistance package pledged on October 26, 2021, Saudi diplomat said on Thursday.
While talking to the Pakistan’s state media Saudi Ambassador Nawaf Bin Said Al-Malki said Saudi Arabia will disburse cash deposits under the pledged financial assistance after approval of the Royal Court and signing of a Memorandum of Understanding (MoU) in a few days.
“This will be soon InshaAllah. There will be the agreement from the Royal Court and the MoU will be signed in a few days for the payment, and also for the deferred oil payment [facility],” the Saudi envoy said in an exclusive interview with APP, during his visit to the headquarters.
Saudi Arabia had recently announced to provide Pakistan $3 billion as a cash deposit with the State Bank to address its balance-of-payments crisis. Also, the Kingdom had pledged a one-year deferred payment facility for the import of oil, worth up to another $1.2 billion.
Ambassador Al-Malki said the government of Saudi Arabia considered Pakistan as “a dear country” with a very deep and strong relationship.
He said Saudia Arabia always stood with Pakistan and extended support to it on multiple occasions, adding that the relationship with Pakistan was regardless of any government in power.
“Our connection is with the Pakistani flag and we consider it our brotherly country,” he said, adding that he saw a “very bright future of Pakistan”.
The Saudi ambassador mentioned the camaraderie between the Saudi Crown Prince Mohammed Bin Salman and Prime Minister Imran Khan and expressed confidence that the relationship would strengthen in the future.
In three years, the six visits of PM Imran Khan to the Kingdom reflect the level of relationship, he added.
The Saudi envoy said Pakistani people loved the Kingdom of Saudi Arabia from the core of their hearts and held in high esteem the Custodian of the holy mosques.
In this regard a financing agreement amounting to $761.5 million has been signed between the Ministry of Economic Affairs, Government of Pakistan and International Islamic Trade Finance Corporation (ITFC) for import of crude oil, refined petroleum products and LNG etc.
The financing agreement was signed by Mian Asad Hayaud Din, Secretary, EAD and Eng. Hani Salem Sonbol, CEO, ITFC. The facility has been made effective immediately and ready for utilization by Pakistan State Oil Company Ltd (PSO), Pak Arab Refinery Ltd (PARCO) and Pakistan LNG Ltd (PLL) for import of oil and gas.
This Syndicated Murabaha Financing facility of $ 761.5 million is for a period of one year and is a part of umbrella Framework Agreement signed with ITFC in June 2021 for total envelop of $ 4.5 billion ($ 1.5 million annually) for a period of three-years.
Originally, ITFC had agreed to provide the financing of US$ 300 million. However, due to growing energy needs of the country and enhanced confidence level of international financial institutions on economic reforms and recovery amid COVID-19 pandemic, the financing was over-subscribed by 2.5 times i.e. from $ 300 million to from $ 761.5 million.
The financing facility will also be helpful in financing oil and gas import bill of the country and easing of pressure on foreign exchange reserves of the country.
Mian Asad Hayaud Din, Secretary, EAD appreciated the support for ITFc for arranging US$ 761.5 million for trade financing. He lauded the efforts of Eng. Hani Salem Sonbol, CEO, ITFC and his team for making this transaction successful.
The ITFC and GOP have also agreed to continue their cooperation in future to mobilize financial resources to support Pakistan in its endeavours to achieve its economic growth targets through ITFC financing facility.
FPCCI President Mian Nasser Hyatt Maggo, while praising the government for launching the SME Policy, said the defined annual sales turnover of a meager Rs250 million does not reflect the current ground realities of Pakistan; as when that threshold was set, the exchange rate was around Rs60 for a dollar, which has now climbed to over Rs170.
Therefore, he has suggested, the new limit should be set at Rs1.5 billion for SMEs.
FPCCI Chief has reiterated his proposal for a simplified and streamlined taxation regime; including, easy-to-fill tax return forms; end to corruption; phased lowering of sales tax rates, etc. through alignment it to FPCCI’s proposal called Simplification of Taxation System in Pakistan sent to the Prime Minister of Pakistan back in February 2021.
The FPCCI chief hailed the concerted efforts of Makhdoom Khusro Bakhtiar, Federal Minister for Industries & Production, for launching long-overdue SME Policy of Pakistan.
The SME Policy has been in the making for many years now and the process unfortunately got deferred many times over, he added.
Maggo said that financing is the lifeline for SMEs and the SBP’s current SAAF Scheme has allowed a banking spread of 8 per cent to commercial banks; on top of 1 per cent refinancing rate of SBP; which makes it 9 per cent for the SMEs. That much cost of capital is unaffordable, unproductive and unfeasible. FPCCI has proposed an interest rate of 3 per cent for SMEs to make it viable for small businesses & entrepreneurs.
Mian Nasser Hyatt Maggo has demanded that the government should update the definitions of Micro, Small and Medium-sized organizations and make it MSMEs on the lines of current best practices internationally; for devising preferential treatment protocols based on peculiar ground realities of Pakistan. MSMEs are the engines of growth & employment generation, he added.
Addressing the glaring issues in labour-related provincial & federal levies on SMEs in Pakistan, Mian Nasser Hyatt Maggo has proposed that all the provincial and federal levies to be clubbed together to make a single levy to be charged either as a percentage of turnovers or on some other pertinent criteria for the sake of simplification; but, protecting the present collections for the purposes these departments have been created as well.
In order to keep demand-side variables in SMEs favour, President FPCCI has suggested that the government should keep their procurement from SMEs strong & steady; incorporating procurement for CPEC-related projects.
KARACHI: Following are the open market exchange rates of foreign currencies in Pak Rupee (PKR) in Pakistan on November 10, 2021 (The rates are updated at 09:55 AM Pakistan Standard Time):
Currency
Buying
Selling
Australian Dollar (AUD)
126.50
128.00
Bahrain Dinar (BHD)
386.75
388.50
Canadian Dollar (CAD)
137.50
139.50
China Yuan (CNY)
23.75
23.90
Danish Krone (DNK)
23.45
23.75
Euro (EUR)
198.00
200.00
Hong Kong Dollar (HKD)
16.70
16.95
Indian Rupee (INR)
2.03
2.10
Japanese Yen (JPY)
1.41
1.44
Kuwaiti Dinar (KWD)
481.70
484.20
Malaysian Ringgit (MYR)
36.45
36.80
NewZealand $ (NZD)
96.45
97.15
Norwegians Krone (NOK)
17.50
17.75
Omani Riyal (OMR)
392.70
394.70
Qatari Riyal (QAR)
39.90
40.50
Saudi Riyal (SAR)
45.85
46.30
Singapore Dollar (SGD)
126.50
128.00
Swedish Korona (SEK)
18.50
18.75
Swiss Franc (CHF)
159.90
160.80
Thai Bhat (THB)
4.80
4.90
U.A.E Dirham (AED)
47.50
48.00
UK Pound Sterling (GBP)
230.50
232.50
US Dollar (USD)
173.00
174.50
Disclaimer: Team PKRevenue.com provides the available rates of the open market, which are subject to change every hour. Team PKRevenue.com provides the available exchange rates at the time of posting the story. So the team is not responsible for any inaccuracy of the data.
ISLAMABAD: The Federal Board of Revenue (FBR) has decided to deploy officials at sugar mills for monitoring of production and supply of sugar, sources said on Tuesday.
The sources said that the tax offices having jurisdiction over sugar mills would post their officials for the crushing season 2021-2022.
In this regard the FBR would invoke Section 40B of Sales Tax Act, 1990 for physical monitoring of manufacturing and supply of the commodity.
In this regard, tax offices in Lahore have initiated the process for deploying the officials at the sugar mills. The Regional Tax Office (RTO) Lahore has placed its officials at the disposal of chief commissioner Inland Revenue, Large Taxpayers Office (LTO) Lahore.
The sources said that the monitoring would help bringing down retail price of the commodity in the local market.
It is worth mentioning that the sugar prices have gone up to Rs160 per kilogram in some parts of the country. However, as the crushing is coming near the prices have come down.
This year the FBR has planned to document all the supply chain from manufacturing to the retail sale of the sugar.
Through Finance Act, 2021 the treatment of sales tax on supply of sugar was changed and it was brought taxation at the retail price. The FBR through Circular No. 02 of 2021 stated: “Currently, the price of white crystalline sugar is fixed at Rs60 per kg in terms of SRO 812(I)/2016 dated September 02, 2016, which is considerably below the actual market price of the commodity.
“In order to address this anomaly, sugar is proposed to be included in Third Schedule of the Sales Tax Act, 1990, so that sales tax is charged and collected on actual retail price of the product at the manufacturing stage.
“This measure would not only ensure due payment of tax but also help in putting a more effective price control mechanism in place for sugar.”
The rate of sales tax at 17 per cent on retail price was to be applicable on sugar supply from July 01, 2021. However, the implementation was deferred till November 30, 2021. Therefore, the normal sales tax rate on sugar supply will be applicable from December 01, 2021.
Meantime, the FBR has increased the minimum sales tax rate on domestically produced sugar to Rs72.22 per kg from Rs60 per kg.
The tax bar sent a set of recommendations to the FBR on Tuesday for e-filing of appeals in sales tax and federal excise regimes.
The KTBA said that a distinct numerical number should be allotted to each appeal and similarly acknowledgment for each appeal should be served to the appellant from the concerned Commissioner Appeals.
A digital or web based form has been proposed to be prescribed that essentially contains basic information about the case, including appellant’s name and its number, tax periods, order jurisdiction/section, order date and tax demanded etc. This feature though omitted from income tax regime with introduction of e-filing of appeals, has been suggested to be reintroduced in like manner.
The KTBA said that currently late e-filing of appeals under the income tax regime is conditional to acceptance of application for condonation of time by the concerned commissioner appeals. The tax bar suggested that no such condition should be adopted in the sales tax e-appeals and the same should also be done away with from e-appeals under the income tax regime.
The rules for fixation and disposal of stay application should have definite deadlines for the concerned commissioner appeals to follow mandatorily with consequences. “Needless to add that the timelines prescribed under Rule 76G of the Income Tax Rules 2002 are not practiced in letter and spirit.”
The tax bar said that all notices and orders in appeals proceedings shall effectively be served via primary modes as provided under Section 56(1)(a), 56(1)(b) of the Sales Tax Act, 1990 and in case this being not possible only then option of service of notices and orders via secondary modes as provided under Section 56(1)(c) and (d) of the Act shall be exploited. “The date of service of notice or order shall essentially be reckoned in like manner.”
The KTBA said that all notices and orders including stay orders issued by the concerned commissioner appeals should seamlessly be served to the concerned field formations so that the IRIS portal is updated bilaterally in real-time.
The tax bar further proposed that the portal should have dedicated link to upload: written arguments; and miscellaneous applications for multiple reasons etc.
The FBR has been suggested that the draft e-appeal procedure should be shared with the KTBA prior to launching in order to undertake enhanced due diligence.
Further, before adoption of the new system, the manual filing of appeal as in vogue currently should be run concurrently for some time.
KARACHI: Pakistan’s fiscal balance in the outgoing first quarter of 2021/2022 posted a deficit of PKR 438 billion, -9.5 per cent YoY lower than prior year’s deficit, according to data released by the finance ministry on Tuesday.
In terms of per cent GDP, the deficit arrived at 0.8 per cent in 1QFY22 compared to 1.1 per cent recorded in 1QFY21 (PKR 484 billion), said analysts at Arif Habib Limited.
However, the primary surplus during the period stood at PKR 184 billion (0.3 per cent of GDP in 1QFY22) , down 29 per cent YoY, compared to a primary surplus of PKR 258 billion witnessed same period last year (0.6 per cent of GDP).
Primarily, total revenue growth of 22 per cent in 1QFY22 to PKR 1.8 trillion (1QFY21: PKR 1.5 trillion) aided the fiscal balance, translating into 3.4 per cent of GDP vs. 3.2 per cent same period last year.
The total tax revenue collection was up by 37 per cent YoY to PKR 1.5 trillion. Indirect taxes (+42 per cent YoY to PKR 917 billion) mainly on the back of higher sales tax (+43 per cent YoY to PKR 264 billion), and direct taxes (+32 per cent YoY to PKR 481 billion amid higher number of tax payers), contributed to the overall collection.
In addition, the government collected PKR 276 billion in non-tax revenues, displaying a decline of 23 per cent YoY. This was particularly owed to lower Petroleum Levy (-90 per cent YoY | PKR 13 billion). On the flipside, the surplus profit of State Bank of Pakistan and Pakistan Telecommunication Authority increased during 1QFY22 to PKR 109 billion (+4 per cent YoY) and PKR 30 billion (+269 per cent YoY), respectively.
In addition, total expenditures went up by 14 per cent YoY to PKR 2.3 trillion (4.2 per cent of GDP vs. 4.3 per cent of GDP in 1QFY21).
Further breakup revealed that current expenditure underwent an uptick of 9 per cent YoY of which defence rose by 17 per cent YoY.
However, the markup expenses went down by 16 per cent YoY to PKR 623 billion. Moreover, development expenditure and net lending undertaken by the government increased by 38 per cent YoY to PKR 180 billion.
Total PSDP expenditure in 1QFY22 arrived at PKR 262 billion (+63 per cent YoY) with provincial expenditure at PKR 154 billion (+71 per cent YoY), outdoing federal disbursement of PKR 108 billion (+53 per cent YoY).
ISLAMABAD: Federal Board of Revenue (FBR) has announced an incentive scheme for its officials in completion and timely submission of inquiry reports, official sources said on Tuesday.
Under the incentive scheme up to two basic salaries have been announced for the authorized officer for submitting inquiry report up to 60 days from receipt of letter nominating inquiry officer/authorized officer.
The FBR has decided the incentive while observing that most inquiry officers were delaying the finalization of inquiries which lead to delay in conclusion of disciplinary proceedings against the officer/officials of FBR.
“This not only reflect poorly on the part of inquiry officer, authorized officer, authorized concerned but also puts the career of the accused officers in the state of limbo for longer periods,” the FBR said.
Therefore, with a view to encourage expeditious finalization of inquiries and with a view to prevent delays in finalization of inquires, the FBR chairman approved the incentive and punitive regime.
For inquiry officers/inquiry committees/fact finding inquiry officers/fact finding inquiry committees; for submitting quality reports to the satisfaction of the authorized officers/authorized concerned:
i. Two basic salaries to be given as incentive on submission of inquiry report up to 60 days from receipt of letter nominating inquiry officer / authorized officer.
ii. One basic salary to be given as incentive on submission of inquiry report up to 75 days from receipts of letter nominating inquiry officer/authorized officer.
iii. Half basic salary to be given as incentive on submission of inquiry report up to 90 days from receipt of letter nominating inquiry officer/authorized officer.
For authorized officer the incentive shall be one basic salary on disposal of inquiry report within 30 days from date of receipt of inquiry report.
For authority the incentive shall be one basic salary for passing order within 30 days from date of receipt of reply to show cause notice/recommendations of inquiry officer / authorized officer.
The FBR also introduced punitive regime for delaying inquiry report.
The FBR said that Internal Job Posting (IJP) allowance of inquiry officers/inquiry committee members/fact finding inquiry officer/ fact finding inquiry committee members shall be discontinued who will take more than 100 days to complete the inquiry till completion of such inquires.
Similar shall apply to authorized officers who take more than 40 days to decide the inquiry; and in case of proceedings against officers’ upto to BS-16; the authority who takes more than 40 days for doing the needful.
The FBR said any excuse including requests for adjournment, non-availability of record etc., shall not be taken as valid excuse for lack of adherence to the time set for doing the needful. Time will not run only in the case of valid stay order from a court of competent jurisdiction.
“These instructions will have prospective effect, but these instructions shall be applicable to all pending inquiries from the date of issuance of these instructions by the board. Accordingly, time will from the date of issuance of these instructions.”
The instruction have been implemented with effect from November 08, 2021.
ISLAMABAD: Prime Minister Imran Khan on Monday said that currently inflation is the core issue in Pakistan. The prime minister said that due to recent inflationary trend in international commodity market, inflation is the core issue in Pakistan currently.
“We are working hard to ensure effective monitoring of prices of essential commodities through good governance and better price control mechanism.”
Ensuring a proper control on supply chain, effective price enforcement and a strict check on hoarding are being made more effective for this purpose, he added.
The prime minister directed the authorities concerned to take all necessary measures to provide maximum relief to common man by making the Market Committees at district and tehsil levels more effective.
Earlier the Prime Minister was apprised that a successful pilot project was launched in Rawalpindi/Islamabad by PTIs Good Governance Team which resulted in substantial drop in prices of essential commodities by ensuring strict enforcement of Government notified rates.
The prime minister was also informed that stay orders secured by the ineffective market committees need to be vacated at the earliest to reconstitute robust price monitoring mechanism at district and tehsil levels.
The meeting was attended by Advisor on Finance Shaukat Fayyaz Tarin, Senator Saifullah Niazi and other officers concerned.
