ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday issued draft rules for tax treatment on capital loss on disposal of listed securities.
(more…)Author: Mrs. Anjum Shahnawaz
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IR offices to open on Saturdays to meet collection target
ISLAMABAD: The Federal Board of Revenue (FBR) has decided to open the offices of Inland Revenue on all Saturdays during the month of June in order to achieve revenue collection target for fiscal year 2020/2021.
In an official note circulated to all Chief Commissioners Inland Revenue of Large Tax Offices (LTOs), Medium Tax Offices (MTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs), the FBR said that all field formations will remain open and observe normal working hours on Saturdays from June 05, 2021 till June 30, 2021.
The decision has been taken to enhance the efforts to meet the revenue collection targets for the last few weeks of current financial year 2020/2021, it added.
The chief commissioners Inland Revenue have been directed to ensure that COVID-19 preventive SOPs should be strictly followed.
The revenue collection of the FBR is provisional at Rs4,167 billion during first eleven months of the current fiscal year. The revenue body needs another Rs533 billion in the month of June 2021 to achieve the revised downward collection target of Rs4,700 billion.
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Dollar gains 14 paisas in interbank
KARACHI: The Pak Rupee fell by 14 paisas against the dollar on Tuesday owing to high demand for import and corporate payments.
The rupee ended Rs153.54 to the dollar from previous day’s closing of Rs153.40 in the interbank foreign exchange market.
Currency experts said that the market was under pressure due to dollar demand for import and corporate payments.
They said that due to fiscal year ending in the month of June the corporate buyers were seen active for dollar buying. Furthermore, the demand was also seen for oil import payment.
They however said that the rupee would recover value in coming days owing to sufficient inflows of export receipts and workers’ remittances.
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SRB posts 52pc growth in May revenue collection
KARACHI: The Sindh Revenue Board (SRB) has posted 52 percent growth in revenue collection during May 2021 as compared with same month of the last year, a statement said on Tuesday.
The SRB collected Rs10.26 billion during May 2021 as compared with Rs6.734 billion in the corresponding month of the last year.
The provincial revenue body collected Rs108.66 billion during 11 months (July – May2020/2021) as compared with Rs91.198billion in the corresponding months of the last fiscal year, showing a growth of 19 percent.
The SRB attributed the significant growth of 52 percent in May 2021 to the continued trust and cooperation of the taxpayers, the support of Sindh government and the relentless efforts of the SRB officials.
The provincial revenue authority said that it would continue to work hard to maximize the revenue collection during the last month of the current fiscal year, despite all adverse factors such as low economic growth and the resurgence of COVID-19, impacting the services sector. -
FED cut for beverage industry in budget likely
KARACHI: The government is seriously considering to bring down federal excise duty (FED) from existing 13 percent to 11.5 percent in the upcoming budget 2021/2022.
According to sources the tax authorities had received instructions to finalize proposals regarding beverage industry for reducing the rate of FED from 13 percent to 11.5 percent.
The FED rate on aerated waters, containing added sugar or other sweetening matter or flavored was increased to 13 percent from 11.5 percent through Finance Act, 2019.
It is interesting to note that Finance Minister Shaukat Tarin in a meeting last week with the delegation of the representatives of the Beverage Industry of Pakistan, said although he is supportive of adopting measures that can boost the industrial development, generate employment and help in expansion of businesses; any decision, regarding the taxation/ relief provided to any industry which has direct linkages with general well being and health of the public, will be taken after a careful analysis of all the facts and arguments.
The Diabetic Association of Pakistan (DAP) in a recent press conference presented alarming rise of diabetic patients in the country due to growing demand for sugar.
Therefore, the association demanded the authorities to double the taxes on sugar-sweetened beverages (SSBs) in the coming budget 2021/2022.
It said diabetes is growing at an alarming rate in Pakistan, which has the 4th highest burden of type 2 diabetes worldwide with more than 19 million cases.
The association demanded the government to increase the FED to 20 percent in the upcoming budget in order to discourage use of beverages.
“Unfortunately, beverages are becoming an increasingly essential part of household food consumption with more than a 10 per cent point increase in the last few years along with a gradual increase in production and decrease in the price,” according to a letter sent to the FBR by the association.
Health experts warned that diabetes was growing at an alarming rate in the country, and as per 2nd National Diabetes Survey of Pakistan 2016-17, every 4th Pakistani adult is suffering from type 2 diabetes.
“Overweight and obesity are key risk factors leading to early development of diabetes. According to the Non-communicable Disease (NCDs) Steps Survey (2014-15), more than four out of ten adults of Pakistan are obese or overweight, while 37 per cent have hypertension,” according to the survey.
WHO and the World Bank also recommended Pakistan for increasing taxes on beverages to reduce obesity and related diseases like diabetes.
The association demanded increase in FED to 20 percent, and create a category of beverages to include sugary drinks beyond aerated water (juices, energy drinks, flavored milk, iced tea, nectars etc.) to impose minimum of 20 per cent excise tax.
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SRB launches tax scheme for waiver of penalty, default surcharge
KARACHI: The Sindh Revenue Board (SRB) on Monday launched a scheme to exempt whole of the amount of penalty and default surcharge on payment of principal amount by given date.
Sindh Revenue Board (SRB) in this regard issued notification to exempt the whole of the amount of penalty and such of the amount of default surcharge as is in excess of the amount of default surcharge specified below, provided that the principal amount of tax and the following amounts of the default surcharge thereon are deposited in the prescribed manner in Sindh Government’s head of account “B-02384” during the periods as specified below:-
(a) the principal amount of tax (as outstanding on 31st May, 2021) along with zero default surcharge thereon if deposited during the period from 1st June, 2021 to 12th June, 2021;
(b) the principal amount of tax (as outstanding on the 31st May, 2021) along with 5 percent of the amount of default surcharge thereon if deposited during the period from 13th June, 2021 to 21st June, 2021; and
(c) the principal amount of tax (as outstanding on the 31st May, 2021) along with 10 percent of the amount of default surcharge thereon if deposited during the period from 22’d June, 2021 to 30th June, 2021.
Explanation: The word “deposited”, used in this notification, means deposited by means of the CPR (Computerized Payment Receipt) so generated.
The benefits of exemption of penalty and default surcharge, as specified in this notification, shall also be available in relation to the arrears of the tax (as outstanding on the 31St May, 2021) payable under the Sindh Sales Tax Ordinance, 2000 and under the Sindh Sales Tax on Services Act, 2011, by.
(i) persons who are liable to be registered under section 24 of the Act but were not registered, provided that:-
(a) they get themselves registered with SRB in the prescribed manner during the aforementioned periods from 1st June, 2021 to the 30th June, 2021;
(b) they deposit their tax liabilities for the principal amount of tax along with the aforementioned percentages of the amount of default surcharge thereon in relation to the tax periods from the date of the commencement of their economic activity to the tax period of May, 2021, in Sindh Government’s head of account “B-02384” in the prescribed manner by the due dates prescribed in clauses (a), (b) and (c) of paragraph 1 of this notification; and
(c) they also e-file their tax returns, for the tax periods from date of commencement of their economic activity of taxable services to the tax period May, 2021, during the period from the date of this notification to the 30th June, 2021.
Explanation: For the purpose of this sub-paragraph (i), the word “registered” in the case of withholding agents shall mean “e-Signed up” in terms of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014;
(ii) persons who were registered but were non-filers or null-filers or nil-filers of their tax returns;
(iii) persons who were late-registered with SRB and they did not file all of their tax returns for the tax periods from the date of commencement of their economic activity of taxable services;
(iv) persons who withheld any amount of Sindh sales tax but have either not deposited the said withheld amount in Sindh Government’s head of account “B-02384” or have deposited the withheld amount in a head of account other than the Sindh Government’s head of account “B-02384”;
(v) persons who determine the arrears through self-detection and selfassessment;
(vi) persons who short-paid any amount of tax in their tax returns;
(vii) persons against whom any arrears of tax were detected in SRB’s scrutiny of tax returns or in SRB’s audit of taxpayers’ record
(viii) persons against whom any tax amount has been determined or assessed or adjudged, by an officer of the SRB, through an order or decision passed under the Sindh Sales Tax on Services Act, 2011, or the rules/notification issued thereunder;
(ix) persons against whom any tax liability has been adjudged or confirmed by the Commissioner (Appeals) or the Appellate Tribunal;
(x) persons whose cases are under assessment or under adjudication with any officer of the SRB or are pending, at the appellate stage with the Commissioner (Appeals) or with the Appellate Tribunal; and
(xi) persons whose cases are under litigation in any court of law including the High Court and the Supreme Court.
The SRB said that the benefits provided under this notification, to the extent as specified below, shall also be available in cases where a person has late paid the principal amount of tax prior to the date of this notification and/or has not yet discharged the liability of penalty (whether the prescribed amount of penalty or the adjudged amount of the penalty) and default surcharge on such late payment provided that he deposits an amount equal to:-
(a) 5 percent of such amount of penalty and 10 percent of such amount of default surcharge (as outstanding on 31st May, 2021) in Sindh Government’s head of account “B-02384” during the period from 1st June, 2021 to 12th June, 2021;
(b) 10 percent of such amount of penalty and 15 percent of such amount of default surcharge (as outstanding on 315t May, 2021) in Sindh Government’s head of account “B-02384” during the period from 13th June, 2021 to 21st June, 2021; and
(c) 15 percent of such amount of penalty and 20% of such amount of default surcharge (as outstanding on 3151 May, 2021) in Sindh Government’s head of account “B-02384” during the period from 22nd June, 2021 to 30th June, 2021.
If the whole of the dues of the principal amount of tax and the aforementioned prescribed percentage of the amount of default surcharge thereon are paid by a person in terms of this notification, such a person shall not be prosecuted under section 49 of the Act, and the offence, to the extent of the arrears of the tax paid under this notification, shall also be compounded under section 46 of the Act.
If the principal amount of tax and the aforementioned percentages of the amount of the default surcharge thereon, as are paid in terms of this notification by the persons described in clauses (vi), (vii), (viii), (ix), (x) and (xi) of paragraph 2 of this notification, are held to be not payable in view of the order issued by the respective competent authority (i.e. the adjudicating officer or the Commissioner (Appeals) or the Appellate Tribunal or the Court of Law), the Officer of the SRB, not below the rank of an Assistant Commissioner, shall allow tax adjustment/credit of the amount or, alternatively, shall refund the amount, so paid, within 90 days from the date of receipt of the taxpayer’s application, for refund or for tax adjustment/credit, together with a copy of the order/judgment and also of the evidence that the incidence of the tax was not passed on to the service recipient.
This notification shall not apply for refund or adjustment of any amount of tax or default surcharge or penalty as has already been paid or recovered on any date on or before the 31st May, 2021.
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KE privatization was policy mistake
KARACHI: Privatizing an integrating and monopoly provider of an essential service (i.e. electricity) to over 20 million people was a policy mistake, said a letter written by an advisor to the Prime Minister on Power and Petroleum.
Tabish Gauhar, Special Advisor to the PM on Power and Petroleum, in his response to a letter written by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) stated that unbundle K- Electric (formerly Karachi Electric Supply Company) into separate generation, transmission and (more than one) distribution companies as opposed to handing over its management to yet another single buyer of an integrated utility company i.e. an unbundled KE should be managed by different set of private entities going forward to avoid monopoly control and single point of management failure or success.
“In hindsight, privatizing an integrated and monopoly provider of an essential service (i.e. electricity) to over 20 million people was a policy mistake,” Tabish Gauher said.
In response to FPCCI President, it is further stated that prior to unbundling, reduce the overall cost of electricity for KE (and, therefore, the implied subsidy burden on the government) by integrating its own generation units and its Independent Power Producers (IPPs) into the national network on the basis of economic order dispatch.
“This will also help absorb the excess and relatively cheaper power available in the national grid/pool for the benefit of the entire power sector (lower circular debt), consumers of Pakistan (lower tariff) and reduce the need for KE to set up additional, more expensive, power plants and its own and create space on its balance sheet to finance the augmentation of the Transmission and Distribution network,” it said.
“… our government has already started doing that by increasing power supply to Karachi from the national grid from 650MW to up to 2000 MW, subject to signing a commercial-based power purchase agreement that is still pending,” it added.
The letter sent to FPCCI president further noted that the ministry supported the recommendations presented by various industrial associations to provide choice of retail supply to all the KE’s end-consumers once its exclusivity / monopoly expires in 2023, as in other DISCOs, in line with government’s power liberalization policy.
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Stock market gains 770 points on positive economic indicators
KARACHI: The stock market gained 770 points on Monday on strong economic indicators including remittances and tax collection.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 47,896 points as against last Friday’s closing of 47,126 points, showing an increase of 770 points.
Analysts at Arif Habib Limtied said that the market crossed the resistance level of 47,300 points comfortably by adding a total of 853 points during the session and maintained the bullish trend to end the session with an increase of 770 points.
Factors contributing to the bullish sentiment at the bourse include strong economic numbers from remittances to tax collection and real GDP growth that is anticipated to go north of 4.5 percent.
Investors have also been expecting positive measures in the upcoming budget, due to be announced June 11th that is likely to keep the sentiment in an upbeat mood.
Cement sector performed well today on the back of increase in cement price / bag in north region. Among scrips, WTL led the table with 480 million shares, followed by BYCO (94.2 million) and SILK (71.5 million).
Sectors contributing to the performance include Banks (+98 points), E&P (+96 points), O&GMCs (+53 points), Fertilizer (+39 points) and Autos (+22 points).
Volumes increased from 959.9 million shares to 1412.3 million shares (+47 percent DoD). Average traded value also increased by 39 percent to reach US$ 207.6 million as against US$ 148 million.
Stocks that contributed significantly to the volumes include WTL , BYCO, SILK, HUMNL and GGL, which formed 53 percent of total volumes.
Stocks that contributed positively to the index include DGKC (+45 points), LUCK (+45 points), PSO (+41 points), HBL (+32 points) and OGDC (+31 points). Stocks that contributed negatively include FFC (-9 points), NBP (-5 points), KEL (-4 points), SHFA (-2 points) and GLAXO (-2 points).
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Cut in tobacco tax under consideration
KARACHI: The government is considering to reduce the federal excise duty on cigarettes in order to discourage duty evasion and stop smuggling.
Sources said that proposals had been invited from stakeholders to rationalize the duty structure on tobacco industry.
The sources said that the authorities were considering to reduce the FED rate by 10 percent in the upcoming budget 2021/2022.
They said that a strong lobby was behind pressure for reduction in the rate for tobacco industry. It is learnt that the duty rate was proposed to cut because of large volume of smuggled cigarettes available in the market.
Interestingly, the health ministry had proposed to increase the levy in order to discourage the use of cigarettes.
The sources said that after the proposed reduction on the tobacco industry, the country would become having the lowest amount of taxes on the cigarettes use.
For the last two years the government was raising the duty rate on the tobacco industry. However, the stakeholders were demanding to reduce the rate in order to stop the smuggling.
The sources said that total revenue collection from tobacco industry was around Rs130 billion. Meanwhile, the tobacco industry assured that with the proposed reduction in duty the revenue would ultimately increase.
To some estimates, the country was losing around Rs77 billion due to smuggled cigarettes.
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Rupee gains three paisas amid demand for foreign payments
KARACHI: The Pak Rupee gained three paisas against the dollar on Monday despite higher demand of the foreign currency for import and corporate payments.
The rupee ended Rs154.40 to the dollar from last Friday’s closing of Rs154.43 in the interbank foreign exchange market.
Currency experts said that due to first trading day the demand for the foreign currency was seen for import and corporate payments.
They, however, said that the issuance of green bonds and inflows of remittances and export receipts helped the rupee to make gain.
The experts hoped the rupee would make further gains in coming days due to positive sentiments related to foreign inflows and lower demand for import payments ahead of budget 2021/2022 announcement.