Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • FBR urged to remove CNIC condition on sales up to Rs100,000 by distributors

    FBR urged to remove CNIC condition on sales up to Rs100,000 by distributors

    KARACHI: Federal Board of Revenue (FBR) has been urged to withdraw condition of CNIC on supplies made by distributors to unregistered persons on sales up to Rs100,000.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 stated that under section 23(1)(b) of the Sales Tax Act, 1990 exclusion has been provided to retailers, whereby retailers supplying taxable goods to unregistered persons are not required to mention the CNIC unregistered customers, wherein the transaction value inclusive of sales tax does not exceed Rs.100,000.

    Due to the present provisions of the law, the distributors are facing a dilemma whereby small retailers are purchasing taxable goods valuing Rs.100,000 from mega stores (retailers) in order to avoid the requirement of providing the CNIC, resulting in loss of business for the Distributors who normally used to sell goods to such small retailers

    The KCCI proposed that FBR should extend similar exclusion of Rs.100,000 to distributors as well.

    Giving rationale, the KCCI said that it will help ease of doing business thereby resulting in enhancement of tax revenue.

  • FBR notifies promotion of customs officers to BS-19

    FBR notifies promotion of customs officers to BS-19

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday announced promotion of officers of Pakistan Customs Service (PCS) from BS-18 to the posts of Additional Collectors of Customs (BS-19) on regular basis with immediate effect.

    Following officers have been promoted to BS-19:

    01. Asma Bashir

    02. Khaldun Ul Haq

    03. Muhammad Moazzam Raza

    04. Ali Waheed Khan

    05. Amanullah

    06. Syed Babar Ali Shah

    07. Fazli Shakoor

    08. Asim Rehman

    09. Muhammad Faisal

    10. Shams-ur-Rehman

    11. Falik Shair

    12. Yawar Nawaz

    13. Mahwish Shah

    The FBR said that the officers who are already working in BS-19 on OPS basis will actualize their promotion against these posts. Posting / Transfer orders of the remaining officers will be notified separately.

    The officer appearing at Serial No. 10 will actualize his promotion from the date he returns from deputation and joins FBR.

    The Officers who were drawing performance allowance prior to issuance of this notification shall continue to draw the allowance on their promotion.

  • FBR includes five export oriented associations for reduced power, gas tariff

    FBR includes five export oriented associations for reduced power, gas tariff

    ISLAMABAD: Federal Board of Revenue (FBR) has included five associations of export oriented sector (erstwhile zero-rated sector) in the concessionary tariff regime of electricity, RLNG and gas.

    The FBR issued Sales Tax Circular No. 01 of 2021 on Tuesday to include the members of five associations for providing concessionary tariff of electricity, RLNG and gas.

    The associations are included:

    (i) Pakistan Tanners Association (PTA)

    (ii) Pakistan Knitwear & Sweater Exporters Association (PAK-SEA)

    (iii) Towel Manufacturers’ Association of Pakistan (TMA)

    (iv) All Pakistan Bedsheets & Upholstery Manufacturers Association (APBUMA)

    (v) Pakistan Silk & Rayon Mills Association

    Previously, through Sales Tax Circular No. 04 dated December 30, 2020, the FBR notified following associations for referring their members for reduced tariff of electricity and gas:

    01. All Pakistan Textile Mills Association (APTMA)

    02. Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA)

    03. Pakistan Hosiery Manufacturers Association (PHMA)

    04. Pakistan Textile Exporters Association (PTEA)

    05. Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA)

    06. Pakistan Sports Goods Manufacturers & Exporters Association

    07. Surgical Instruments Manufacturing Association of Pakistan

    08. Pakistan Denim Manufacturers and Exporters Association

    09. All Pakistan Textile Processing Mills Association (APTPMA)

    The FBR issued standard operating procedure (SOP) to start the registration process.

    In a notification, the FBR said that the economic coordination committee of the cabinet had approved the reduced rate to manufacturers on supply of electricity and gas in a meeting held on December 12, 2020. The ECC also directed the FBR, ministry of commerce and other stakeholders to devise a standard operating procedure (SOP) for enrollment of registered persons under the export-oriented sectors (erstwhile zero-rated sectors) to quality concessionary regime of electricity, RLNG and gas tariff.

    Accordingly, a meeting was held in FBR on December 22, 2020 and as a result of thorough deliberations amongst all stakeholders the requisite SOP has been agreed upon and being rolled onto.

    The FBR said the following SOP adopted for enrollment of manufacturers for grant of reduced tariff rate:

    (i) For new registration of manufacturers for concessionary tariff rates, applicants may apply respective representative association.

    (ii) The Association concerned, after verifying the particulars on the prescribed format, may forward the application along with its element recommendations, duly signed by its chairman/president, to the export oriented sector registration cell (ESRC) of the FBR.

    (iii) The ESRC shall examine the particulars and recommendations of the respective associations and counter-verify particulars of the taxpayer including declarations in the registration profile etc. as required, and forward the case to the ministry of commerce for allowing concessionary tariff through respective Distribution Companies (DISCOs)/Gas companies.

    (iv) In case the ESRC spots any discrepancies in the verification report and data available with the FBR, the matter will be referred to Inland Revenue field formations for ground-check, report and recommendations.

    (v) The newly enrolled taxpayers shall be entitled to avail concessionary tariff prospectively.

    (vi) The DISCOs/gas companies shall ensure that the taxpayers are active on FBR’s (Sales Tax) Active Taxpayers List (ATL) as shared with DISCOs/gas companies each month before generating the monthly utility bills. In case the taxpayer is found non-active on the ATL, standard utility tariff shall apply on supply of utilities for the relevant period.

    (vii) Any taxpayer aspiring to avail concessionary utility rates and who is not registered with the respective sector association, may approach the Inland Revenue field formation concerned for verification of its business particulars and onward submission of report on the prescribed format to the RSRC within 15 days of the submission of the application.

    The procedure for the registration of new entrants in export oriented sectors shall become applicable with effect from January 01, 2021.

  • Stock market gains 59 points in mixed trading

    Stock market gains 59 points in mixed trading

    KARACHI: The stock market increased by 59 points on Tuesday in mixed trading sessions during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,491 points as against previous day’s closing of 43,755 points, showing an increase of 59 points.

    Analysts at Arif Habib Limited said that the market reacted passively to the partial changes made by the Government in Finance & Petroleum Ministries with Index oscillating between -232 points and +377 points, closing the session +178 points (unadjusted).

    Last half an hour of closing saw brisk buying and rapid recovery although the session saw dull activity for good part of the session.

    News reports indicated further changes in the Federal cabinet in offing, which will be announced later today and finalized by Thursday.

    This kept Investors perturbed about the changes made in key ministries and impact thereof on policy measures taken in the past several months. UNITY rebounded well to trade near upper circuit by the end of session, whereas tech and refinery stocks also garnered support.

    Among scrips, BYCO realized trading volume of 45.8 million shares, followed by TRG (35.2 million) and UNITY (30.8 million).

    Sectors contributing to the performance include Banks (+58 points), Autos (+32 points), Cement (+20 points), Chemical (+14 points), E&P (-39 points), Power (-36 points) and Tobacco (-18 points).

    Volumes declined from 523.8 million shares to 339 million shares (-35 percent DoD). Average traded value also declined by 12 percent to reach US$ 135.6 million as against US$ 153.6 million.

    Stocks that contributed significantly to the volumes include UNITY, PRL, NETSOL, HUMNL and TELE, which formed 28 percent of total volumes.

    Stocks that contributed positively to the index include MCB (+57 points), FFC (+21 points), INDU (+11 points), FFBL (+11 points) and PAEL (+10 points). Stocks that contributed negatively include ENGRO (-39 points), HUBC (-32 points), MARI (-28 points), PAKT (-16 points) and UBL (-16 points).

  • Banks directed to extend hours for duty, tax collection

    Banks directed to extend hours for duty, tax collection

    KARACHI: State Bank of Pakistan (SBP) on Tuesday directed banks to observe extended banking hours to facilitate collection of duty and taxes.

    The SBP said that to facilitate the collection of government receipts/ duties / taxes, it has been decided that the field officers of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 6:00 PM on March 31, 2021 (Wednesday). For which purpose a special clearing has been arranged at 5:00 P.M. on the same day by the NIFT. 

    All banks are, therefore, advised to keep their concerned branches open on March 31, 2021 (Wednesday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.

  • FBR offices to observe extended working hours for revenue collection

    FBR offices to observe extended working hours for revenue collection

    ISLAMABAD: In an effort to maximize revenue collection before the close of the fiscal quarter, the Federal Board of Revenue (FBR) has directed all Inland Revenue offices to observe extended working hours on Wednesday, March 31, 2021.

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  • Rupee recovers Rs14.58 against dollar during current fiscal year

    Rupee recovers Rs14.58 against dollar during current fiscal year

    KARACHI: The rupee recovered Rs14.58 against the dollar during first nine months (July – March) of fiscal year 2020/2021.

    The rupee ended Rs153.09 on closing of March 30, 2021 as it was started the fiscal year Rs167.67 to the dollar.

    The rupee gained 95 paisas to close at Rs153.09 to the dollar on Tuesday as compared with previous day’s closing of Rs154.04 in the interbank foreign exchange market.

    Currency experts said that alarming rise in coronavirus cases had discouraged the demand of the foreign currency for import payment.

    The rupee also recovered Rs5.01 against the dollar during March 01 to March 30, 2021.

  • FMCGs should be excluded from tax collecting agent

    FMCGs should be excluded from tax collecting agent

    KARACHI: Federal Board of Revenue (FBR) has been urged to amend laws to exclude manufacturers of fast moving consumer goods (FMCGs) from application of withholding tax under Section 236G and 236H on Income Tax Ordinance, 2001.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022, stated that manufacturers of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam etc., collect advance tax at 0.1 percent for persons appearing on Active Taxpayers List (ATL) and 0.2 percent for non-ATL and 0.5 percent for ATL and 1 percent for non-ATL of gross of amount of sale to distributors, dealers, wholesalers and retailers.

    Most of the goods mentioned above are not fast moving consumer goods. The only FMCG is beverages on which the section 236 G & H are unjustly applied.

    This tantamount to discrimination for beverage manufacturers being the only manufacturer of FMCGs manufacturer class liable to above tax.

    It is not practically possible for manufacturer of FMCGs to collect income tax from dealers, distributors, wholesalers and retailers and it adds to the cost of consumer products.

    The KCCI proposed that the section may be appropriately amended to exclude the manufacturers of FMCGs from being collecting agents under section –236 G & H of the Ordinance.

    The chamber said that it would relieve the unjust burden of tax on consumer goods and enable manufacturers of FMCGs to pass the benefit to end-consumers.

  • ADB approves $300 million for 300MW hydropower plant in Pakistan

    ADB approves $300 million for 300MW hydropower plant in Pakistan

    MANILA, PHILIPPINES: The Asian Development Bank (ADB) has approved a $300 million loan to finance the construction of a 300-megawatt hydropower plant that will increase the share of clean energy in Pakistan and improve the country’s energy security, a statement said on Tuesday.

    The plant will add 1,143 gigawatt-hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability. The plant, which will incorporate seismic strengthening and climate-proofing measures, will be built on the Kunhar river near Balakot City in Khyber Pakhtunkhwa Province and commissioned by 2027.

    “Pakistan is highly vulnerable to climate change, with water resources and energy particularly at risk from floods, droughts, high temperatures, and other extreme weather events,” said ADB Principal Energy Specialist Adnan Tareen.

    “In line with Pakistan’s climate change adaptation and mitigation priorities, this climate-resilient hydropower plant will boost the country’s clean energy generation while effectively utilizing its vast water resources.”

    Pakistan is rich in hydropower resources but only around 16% of its identified hydropower potential has been harnessed. The country’s power sector is reliant on imported fuel-based power generation and is burdened with a stressed transmission and distribution network. To balance the energy mix and reduce its dependence on imported fuel, the government has committed to increase its untapped renewable energy potential in hydro, solar, and wind.

    Balakot Hydropower Plant will also generate economic activity and improve the skills of local communities. During construction, the project will generate more than 1,200 jobs, about 40% of which will be sourced locally, and provide livelihood skills development for women.

    A community development program will help to improve livelihood opportunities for affected households and adjacent communities, including women and vulnerable segments of the population. This will help to build economic resilience and improve the capacity of affected people to cope with climate change, natural disasters, and other risks.

    The plant will substantially increase the revenue of the state-owned Pakhtunkhwa Energy Development Organization, which is responsible for operating hydropower plants in Khyber Pakhtunkhwa. It will help reduce average daily load shedding in the province and serve the national demand.

    The government will invest $175 million in the project. It has also requested a $280 million loan in project cofinancing from the Asian Infrastructure Investment Bank.

    ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

  • FBR suggested to abolish multiple audit provisions

    FBR suggested to abolish multiple audit provisions

    KARACHI: The Federal Board of Revenue (FBR) has been suggested to abolish multiple provisions of audit under Income Tax Ordinance, 2001 and simplify procedure for ease of doing business.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 said that presently audit proceedings can be started u/s 177 as well as through balloting u/s 214C and like-wise enquiries can also be made by the Commissioner u/s 122(5A). There is a concept of a special audit panel u/s 177(11) as well.

    Sub-Section 7 is ambiguous and provides the Commissioner and his sub ordinates with a tool to harass, extort and victimize any taxpayer at will.

    The Commissioner can re-open the Audit of any person or firm at will on unsubstantiated grounds. SEC.177 SUB-SECTION 4: Any person employed by a firm to conduct audit function may be authorized by the Commissioner to exercise powers under sections 175 and section 176.

    The KCCI said that revenue collection through such recovery proceedings is hardly Rs.92.0 Billion whereas the costs due to litigation, involvement of entire tax collection machinery and declining number of tax filers, is far more than the collection.

    Multiple audits under various provisions have eroded the trust of tax-payers in the FBR. RTOs and LTUs. Audit functions under various Provisions have created confusion and complexity in Tax regime.

    Such provisions are also prone to misuse and a source of harassment.

    The chamber proposed that all audit functions should be brought under one provision of Income Tax Ordinance rather than various over-lapping provisions with clear and well defined parameters. Audit Parameters should be transparent and open to taxpayers.

    Further, Sub-Section 7 may be deleted.

    Powers of the Commissioner and sub-ordinate officials should be curtailed to restore the trust of Tax Payers and encourage broadening of tax-base.

    Such Audits should be restricted to specific queries or objections and call for relevant document only rather than opening and re-opening a comprehensive audit every time.

    Giving rationale the KCCI said that bring transparency and clarity to audit functions and rules governing the same.

    Prevent harassment to tax payers and abuse of powers by Inland Revenue officials. This will also help in broaden tax base by restoring confidence in the system.