In a move aimed at streamlining taxation in the digital era, proposed amendments to the Sales Tax Act, 1990 are set to require individuals operating online marketplaces to collect sales tax on goods sold through their platforms, regardless of ownership.
(more…)Author: Mrs. Anjum Shahnawaz
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SBP unveils policy to enhance financial inclusion of persons with disabilities
KARACHI: State Bank of Pakistan (SBP) on Monday unveiled a policy to enhance the financial inclusion of persons with disabilities (PWDs), according to a statement issued by the central bank.
The President of Pakistan, Dr. Arif Alvi graced the occasion as Chief Guest and launched the policy.
This policy initiative aims at improving financial independence for PWDs by improving access to banking services as well as providing opportunities to contribute as bank employees.
An important feature of this policy is that it has been developed in collaboration with Banks and NGOs dedicated to improving the lives of PWDs. In this context, SBP’s instructions now require the Board of Directors of banks to approve a policy and strategy framework for the financial inclusion of PWDs, while management will ensure its implementation. It is expected that this will help ensure that all stakeholders are aligned.
Under the policy framework, banks will offer products and services catering to the special needs of all categories of PWDs including the physically handicapped, visually impaired and those with hearing and speech disabilities.
Banks have been asked to ensure the availability of essential forms and documents in braille, sign language interpretation services and ramps at the entrances of their branches and ATM vestibules.
The importance of respectful and empathetic behavior towards PWDs has been given prominent attention and banks have been asked to create awareness and train their employees in serving customers with PWDs. SBPs policy places special emphasis on giving priority, special assistance, and care to this vulnerable segment of society in order to increase their financial inclusion.
In the context of helping PWDs to join banks as employees, an important feature of the policy requires banks to meet prescribed job quota for PWDs and align human resource policies and practices to cater to their specific needs throughout the career cycle.
This covers recruitment, retention, capacity building, and career development in addition to conventional HR practices. In order to encourage female PWDs, the job quota for PWDs at banks shall ensure at least a 25% share for women with disabilities.
Moreover, while designing products and services, the banks shall ensure focused and efficient provision of banking facilities to female PWDs.
This ground breaking policy also entails establishment of a dedicated network of model branches across the country, including Azad Jammu Kashmir (AJK) and Gilgit Baltistan (GB), which will provide all necessary physical and technological infrastructure and services at one place for PWDs.
The President, Dr. Arif Alvi, in his key note address appreciated the efforts of the State Bank of Pakistan in designing a comprehensive policy to facilitate PWDs in collaboration with all relevant stakeholders.
He highlighted the difficulties experienced by PWDs in society and referred to the impediments faced by them in accessing financial services. He also drew attention towards the more vulnerable segment of PWDs – women with disabilities, as they may face two fold discrimination.
He expressed satisfaction that the launch of the new policy by SBP will contribute significantly in alleviating the difficulties faced by PWDs, which will enhance their confidence in the financial system significantly.
The President hoped that all relevant stakeholders will continue to collaborate on a regular basis to keep the momentum of providing improved infrastructure, service delivery, use of innovative technologies and availability of financing at an affordable cost.
On this occasion, Dr. Reza Baqir, Governor, SBP informed the President about the efforts being made to improve the quality of services for the PWDs and shared his resolve that SBP will continue its efforts, along with banks, towards achieving even higher standards for such services. He acknowledged the valuable input given by various associations of PWDS in these efforts.
The Governor said that SBP will work with banks to support the goal that PWDs have equal access and opportunity to participate in economic activities. He emphasized that banks should design and deliver products and services that cater to the special needs of PWDs and make physical and assistive technological infrastructure available for their facilitation.
The governor further mentioned that promotion of diversity and inclusion is an important pillar of SBP’s overall policy framework that aims at deepening of the financial system for achieving broad based sustainable growth and development.
SBP has required banks to develop the policy framework for PWDs by 30th September 2021. Banks are also required to establish a minimum number of Model branches, under a prescribed criteria, in each province, AJK and GB by 31st March 2022.
During the meeting, Mr. Arif Usmani, President NBP, speaking on behalf of the Pakistan Banks Association reiterated the banking sector’s full commitment in supporting the financial inclusion of PWDs. Mr. Amin Hashwani, on behalf of various associations of PWDs thanked the Governor SBP for issuance of comprehensive policy for financial inclusion of PWDs. Mr. Ghulam Muhammad Abbasi from SBP made a detailed presentation during the launch ceremony. The event was attended by the senior SBP officials, Presidents/CEOs of banks and heads of NGOs working for various PWDs.
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Stocks shed 226 points on concerns over inflationary pressure
KARACHI: The stock market fell by 226 points on Monday owing to concerns of inflationary pressure and rise rupee/dollar parity.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,013 points as against last Friday’s closing of 48,239 points, showing a decline of 226 points.
Analysts at Arif Habib Limited said that the market traded in a narrow range between +132 points and -275 points, closing the session -226 points.
Uncertainty prevailed during the session due to concerns over increase in oil prices giving rise to inflation as well as the increase in Rupee : Dollar parity which caused the investors to take a cautious approach.
Despite increase in cement price / bag in the outgoing week, Cement and Steel sector stocks were down. Though oil prices have maintained stable ground, E&P sector remained under selling pressure. Among scrips, SILK topped the volumes with 235.1 million shares, followed by HUMNL (60.3 million) and WTL (58.4 million).
Sectors contributing to the performance include Cement (-64 points), Banks (-3 points), Chemical (-25 points), Fertilizer -24 points), O&GMCs (-20 points).
Volumes increased from 750.5 million shares to 839.2 million shares (+12 percent DoD). Average traded value declined by 23 percent to reach US$ 100.8 million as against US$ 131.2 million.
Stocks that contributed significantly to the volumes include SILK, HUMNL, WTL, PIBTL and FFL, which formed 53 percent of total volumes.
Stocks that contributed positively to the index include SYS (+19 points), FCEPL (+12 points), MEBL (+6 points), SNGP (+6 points) and HUBC (+6 points). Stocks that contributed negatively include LUCK (-33 points), PSO (-22 points), MCB (-20 points), COLG (-15 points) and ENGRO (-14 points).
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Karachi Interbank Offered Rates on June 21
KARACHI: State Bank of Pakistan (SBP) on Monday issued following Karachi Interbank Offered Rates (KIBOR) as on June 21, 2021.
Tenor BID OFFER 1 – Week 6.92 7.42 2 – Week 6.96 7.46 1 – Month 7.01 7.51 3 – Month 7.20 7.45 6 – Month 7.44 7.69 9 – Month 7.52 8.02 1 – Year 7.58 8.08 -
Rupee ends down by 62 paisas against dollar
In Karachi, the Pakistani Rupee witnessed a depreciation of 62 paisas against the US Dollar on Monday, primarily attributed to heightened demand for imports and corporate payments.
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Pakistan likely to exit from FATF’s grey list
KARACHI: The plenary meeting of Financial Action Task Force (FATF) is scheduled to start from June 21, 2021. The meeting may decide to give green signal to Pakistan for white list or maintain its status in the grey list.
The virtual plenary meeting of the FATF will continue till June 25, 2021. It is hoped the watchdog would give clear Pakistan from its strict monitoring list as the country had done immense progress in meeting the required actions.
The Asia Pacific Group on Money Laundering (APG) – an arm of FATF- in its mutual evaluation of Pakistan released in May 2021 welcomed the efforts of the country in meeting most of the actions set by the FATF.
“Overall, Pakistan has made notable progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on 22 Recommendations.
“Recommendations 14, 19, 20, 21 and 27 have been re-rated to compliant, and recommendations R.1, 6, 7, 8, 12, 17, 22, 23, 24, 25, 30, 31, 32, 35 and 40 to largely compliant.
“Recommendation 28 has been re-rated to partially compliant. Insufficient progress has been made to re-rate Recommendation 38. Compliance with Recommendation 37 has been downgraded to non-compliant,” the report said.
Pakistan government is hopeful that the FATF would delist the country from grey list.
“Pakistan has achieved compliant rating in 31 out of 40 FATF recommendations (MER technical compliance). This is the parallel scrutiny being undertaken at FATF besides our current action plan. Upgrade of 20 criteria in less than 2 years is unprecedented in FATF history for any country,” Hammad Azhar, a federal minister, said in his tweet on June 04, 2021.
The FATF put Pakistan in grey list in the year 2018.
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Tax Rates for Individuals and Association of Persons
ISLAMABAD: The government has decided to retain the tax rates for individuals and Association of Persons (AOPs) for the year 2021-2022, sources in Federal Board of Revenue (FBR) said.
Since there is no change proposed through the Finance Bill, 2021 the rates applicable in Tax Year 2021 shall remain applicable in Tax Year 2022.
Rates of Tax for Individuals and Association of Persons
(1) Subject to clause (2), the rates of tax imposed on income of every individual and association of persons except a salaried individual shall be as set out in the following Table, namely:—
TABLE
S. No. Taxable income Rate of tax (1) (2) (3) 1. Where taxable income does not exceed Rs. 400,000 0% 2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000 5% of the amount exceeding Rs. 400,000 3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 Rs. 10,000 plus 10% of the amount exceeding Rs. 600,000 4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000 Rs. 70,000 plus 15% of the amount exceeding Rs. 1,200,000 5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 Rs. 250,000 plus 20% of the amount exceeding Rs. 2,400,000 6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 Rs. 370,000 plus 25% of the amount exceeding Rs. 3,000,000 7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000 Rs. 620,000 plus 30% of the amount exceeding Rs. 4,000,000 8. Where taxable income exceeds Rs. 6,000,000 Rs. 1,220,000 plus 35% of the amount exceeding Rs. 6,000,000 -
Super tax permanently imposed on banking companies
ISLAMABAD: The levy of super tax has been permanently imposed on banking companies as it was expiring in the tax year 2021.
Sources in the Federal Board of Revenue (FBR) said that the super tax was only imposed on banking companies while the other taxpayers were exempted from tax year 2020.
The sources said that the Finance Bill 2021 had proposed to continue the levy of super tax at 4 percent on banking companies beyond Tax Year 2021 and onwards.
The government imposed the super tax through Finance Act, 2015 for one year, which was later extended for subsequent years, by inserting Section 4B to the Income Tax Ordinance, 2001.
According to Section 4B:
Super tax for rehabilitation of temporarily displaced persons.― (1) A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 and onwards, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.
(2) For the purposes of this section, “income” shall be the sum of the following:—
(i) profit on debt, dividend, capital gains, brokerage and commission;
(ii) taxable income (other than brought forward depreciation and brought forward business losses) under section (9) of this Ordinance, if not included in clause (i);
(iii) imputable income as defined in clause (28A) of section 2 excluding amounts specified in clause (i); and
(iv) income computed, other than brought forward depreciation, brought forward amortization and brought forward business lossess under Fourth, Fifth, Seventh and Eighth Schedules.
(3) The super tax payable under sub-section (1) shall be paid, collected and deposited on the date and in the manner as specified in sub-section (1) of section 137 and all provisions of Chapter X of the Ordinance shall apply.
(4) Where the super tax is not paid by a person liable to pay it, the Commissioner shall by an order in writing, determine the super tax payable, and shall serve upon the person, a notice of demand specifying the super tax payable and within the time specified under section 137 of the Ordinance.
(5) Where the super tax is not paid by a person liable to pay it, the Commissioner shall recover the super tax payable under subsection (1) and the provisions of Part IV,X, XI and XII of Chapter X and Part I of Chapter XI of the Ordinance shall, so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance.
(6) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.
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Salary Tax Rates for year 2021-2022
ISLAMABAD: The Finance Bill 2021 has not proposed changes to tax rates and slabs for salaried persons for tax year 2022, sources in the Federal Board of Revenue (FBR) said.
Therefore tax rate and slabs will remain unchanged for tax year starting from July 01, 2021.
Following is the table for tax rates on taxable income of salaried persons prevailed during tax year 2021:
Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—
01. Where taxable income does not exceed Rs. 600,000: the tax is zero per cent
02. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate is 5% of the amount exceeding Rs. 600,000
03. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the tax rate is Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000
04. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the tax rate is Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
05. Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000: the tax rate is Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
06. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the tax rate is Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
07. Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000: the tax rate is Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
08. Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000: the tax rate is Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
09. Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000: the tax rate is Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10. Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000: the tax rate is Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11. Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000: the tax rate is Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs. 75,000,000: the tax rate is Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000
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FBR to confiscate goods without brand licensing
In a bid to enhance regulatory oversight and combat counterfeiting, the proposal to make brand licensing mandatory for manufacturers of specified goods has been put forward. In the event of non-compliance, the Federal Board of Revenue (FBR) is poised to be empowered with the authority to confiscate such items.
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