ISLAMABAD: Federal Board of Revenue (FBR) has restricted the benefit of tax concession to 62 non-profit organizations (NPOs) under Tax Laws (Second Amendment) Ordinance, 2021.
(more…)Author: Mrs. Anjum Shahnawaz
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FBR needs Rs1,306 billion to achieve annual collection target
ISLAMABAD: Federal Board of Revenue (FBR) is required Rs1,306 billion during the last quarter (April-June) to achieve revised downward target of Rs4,700 billion set for the current fiscal year.
According to provisional figures released by the FBR on Wednesday, the net collection was Rs3,394 billion during the first nine months (July – March) 2020/2021 as compared with Rs3,3,076 billion in the corresponding months of the last fiscal year, showing an increase of 10 percent.
The collection in the first nine months of the current fiscal year has also exceeded by over Rs100 billion against the target of Rs3,287 billion set for the period.
The original revenue collection target for the current fiscal year was set at Rs4,963 billion. However, sources in the FBR said that the target has been revised downward to Rs4,700 billion.
Therefore, the FBR is required to collect more Rs1,306 billion in the remaining three months of the current fiscal year to achieve the target.
According to a statement issued by the FBR, the net collection for the month of March 2021 was Rs.475 billion, against a required increase of Rs.367 billion, representing an increase of 46 percent over Rs.325 billion collected in March 2020 and 129 percent of the target.
“The year-on-year growth of 46 percent is unprecedented. These figures would further improve before the close of the day and after book adjustments have been taken into account,” the FBR said.
On the other hand, the gross collections increased from Rs.3,178 billion during this period last year to Rs.3,571 billion this year, showing an increase of 13 percent.
The amount of refunds disbursed was Rs.177 billion compared to Rs.102 billion paid last year, showing an increase of 74 percent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
The improved revenue performance is a reflection of growing economic activities in the country despite facing the challenge of third wave of COVID-19. During April-June 2021, it is expected that this revenue performance would be improved substantially compared to 2020 when economic activities were disrupted due to COVID.
Meanwhile, FBR’s efforts to broaden the tax base are expending apace. Early signs suggest such efforts are bearing fruits. As on 28-2-2021, income tax returns for tax year 2020 have reached 2.8 million compared to 2.6 million last year, showing an increase of 8 percent. The tax deposited with returns was Rs.51 billion compared to only Rs.33.0 billion, showing an increase of 54 percent.
It may be recalled that last year the final date for submission to returns was 28th February. FBR’s decision to adhere to 8th December as the last date has been vindicated as more returns and higher tax payments have been recorded during the tax year 2020 compared to 2019.
Moreover, a number of 123,680 new Income Tax Returns have been received for Tax Year 2020 resulting into collection of additional tax of Rs. 511 million.
Sales tax returns for the period from July 2020 to February 2021 have reached 179,584 whereas they were 167,769 in the corresponding months last year, showing an increase of 7.04 percent. The sales tax paid with returns is 624 billion this year which was 536 billion last year, showing an increase of 16.41 percent.
FBR has also released the information about Tier-I retailers who have been integrated with POS system. According to the information, 10283 sales points have been integrated with Point of Sales Linked Invoicing System.
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Petrol price reduced to Rs110.35 per liter
ISLAMABAD: The government on Wednesday announced a decline of Rs1.55 per liter petrol to Rs110.35 for the next fortnight starting April 01, 2021.
According to revised petroleum prices issued by the finance division the price of petrol has been revised downward by Rs1.55 per liter to Rs110.35 from existing price of Rs111.90.
The price of high speed diesel has been reduced by Rs3 per liter to Rs113.08 from Rs116.08.
Similarly, the per liter kerosene oil has been reduced by Rs1.55 to Rs82.06 from Rs83.61.
Likewise, the price of light diesel oil has been brought down by Rs1.56 per liter to Rs79.86 from exiting Rs81.42.
The prices will be effective from April 01, 2021.
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FTO proposes simplification of income tax return forms
ISLAMABAD: Federal Tax Ombudsman (FTO) has advised the Federal Board of Revenue (FBR) to simplify income tax return forms in consultation with stakeholders to facilitate the taxpayers.
In its proposals for the budget 2021/2022, the FTO recommended simplification of returns forms in consultations with small taxpayers along with availability of option of filing the returns in Urdu.
Similarly, an option to file the returns manually with facility provided by the FBR to upload on line data was also proposed.
The FBR in response to the FTO stated that simplified Income Tax Returns for salaried, small traders having turnover up to Rs10 million, manufacturing Small & Medium Enterprises (SME’s) having turnover up to Rs50 million have been issued.
It was recommended that FBR should devise some system so that sunset date of filing return is not extended but late filing may be allowed with certain incremental penalty for delay in filing per month or any part of it.
The FBR responded that in 2020, last date of December 08 was not extended. According to FBR, Income Tax Return making rules have been issued. Though these are applicable for Tax Year 2022 but FBR is following this for Tax Year 2021 and return forms would be available by 1st July (to be submitted within due date without extension on last date).
The FTO proposed that FBR may approach the concerned Authorities/Establishment Division, to issue instructions to bind the heads of government departments, autonomous bodies and large scale public sector organizations to get the certificate of filing of returns by their employees falling in the tax net at the end of the last date and to link their promotion/annual increments with mandatory return filing.
Regarding audit, it was proposed to rationalize its parameters so that more focus should be laid on large entities rather than small taxpayers.
Moreover audits should also include investigative work to detect the evasion through a study of input/output standards of utility bills and production capacity of machinery etc. Several cases for audit should in line with capacity of FBR to complete the audit in a year.
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ECC approves cotton, yarn import from India
ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved import of cotton and yarn from India.
This was disclosed by Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, in a tweet.
“To keep the momentum of our value-added exports, ECC in its meeting held today approved import of Cotton and Cotton Yarn from India, including land route,” he said, adding that this would now be placed before the Cabinet for approval, after which it will be notified.
The adviser said that the ECCP also approved the formation of a National Export Development Board (NEDB).
The board will be chaired by the Prime Minister Imran Khan and will also include ministers, exporters, investors and the business community, the adviser said this on his official twitter account.
He said the NEDB became the main forum to discuss the strategy, incentives and removal of business hurdles.
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PM praises FBR for achieving 41pc growth in March collection
ISLAMABAD: Prime Minister Imran Khan on Wednesday praised the Federal Board of Revenue (FBR) for posting an unprecedented growth of 41 percent in revenue collection for the month of March 2021.
“I commend FBR efforts, achieving historic growth of 41 percent in March 2021 with collections recorded at Rs460 billion,” the prime minister said in a tweet message.
The FBR collected around Rs322 billion in the same month of the last year.
The FBR also posted 10 percent revenue collection growth to Rs3,380 billion during first nine months (July – March) of the current fiscal year.
The FBR collected Rs3,060 billion in the corresponding months of the last fiscal year.
“This reflects broad-based econ revival led by government policies,” the prime minister added.
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Byco Petroleum changes name
KARACHI: Byco Petroleum Pakistan Limited has changed its official name to Cinergyco PK Limited, according to information shared with Pakistan Stock Exchange (PSX) on Wednesday.
It said that the board of directors has considered and approved a change in company’s name from Byco Petroleum Pakistan Limited to Cinergyco PK Limited.
Consequently, for such purpose, the board has also resolved to call an extraordinary general meeting for seeking approval/authorization of the shareholders, the company added.
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Foreign investors propose abolishing FTR, adjustable all withholding tax provisions
KARACHI: Foreign investors operating in Pakistan have suggested the government to abolish Final Tax Regime (FTR) and make all provisions pertaining to withholding tax as adjustable.
In its proposals for budget 2021/2022, the Overseas Investors Chamber of Commerce and Industry (OICCI) on Wednesday said it had submitted comprehensive taxation proposals for the Federal Budget 2021-2022 which highlight various measures required to streamline the complex tax regime, incentivize the legitimate tax payer through Ease of Doing Business measures and ensure filing of tax returns by all income earners.
Commenting on the Taxation proposals , Irfan Siddiqui, OICCI President, acknowledged that the government has taken various bold measures in the face of many economic challenges, including those emanating from the Covid 19 impact on the local and international trade and business”.
Irfan Siddiqui added: “OICCI members are fully conscious that the continuing spread of Covid-19 poses exceptional challenges to the government and have therefore decided not to seek a number of taxation relief measures which, under normal circumstances, would have been justified to boost FDI and align Pakistan to compete with other regional countries.”
OICCI has strongly recommended that the Minimum Tax regime should be rationalized with a lower level general tax rate and immediately reduced to 0.2 percent for certain industries, like oil refining and oil marketing companies, with high turnover and low/government regulated margins.
“Moreover, Withholding tax regime (WHT) with over 45 rates is cumbersome and needs to be immediately rationalized to 5 rates for filers. Final Tax regime should be abolished and all withholding taxes should be made adjustable. FBR should ensure that all those persons who have been subjected to withholding taxes should file regular tax returns.”
OICCI Secretary General , Abdul Aleem , giving further details of the key Taxation proposals from the chamber highlighted the need to introduce one unified Sales Tax rate of 13 percent, as applicable in Sindh, and one common tax return form throughout the country, filing of a single tax return with FBR instead of separate ST returns to the authorities in every province. He also stated Income Tax rebate of 2 percent for Shariah Compliance investment have not been effective and the intent of the regulators will not be realized until these are aligned with SECP Shariah regulations.
M. Abdul Aleem also stated that OICCI has recommended for substantial increase in FED on unmanufactured tobacco to arrest massive tax evasion in the tobacco industry. This together with introduction of Track and Trace Monitoring system will boost FBR revenue significantly. OICCI also proposed introducing stringent controls and penalties for illicit trade across the whole value chain. Pending review and revision of Afghan Transit Trade agreement (ATTA) , there is need to harmonize duty and tax rates to remove incentive for duty evasion.
Highlighting the need for Ease of Doing Business and promoting tax culture in the country , OICCI has recommended that the Tax regime should be simplified with massive reduction in the number of tax payments and filing of various forms/returns. Pending tax refunds should be settled withing 45 days and inter-adjustment of income/sales tax refunds be allowed in the law.
In line with the latest focus in the country on digitization of the economy, FBR and associated tax authorities need to substantially upgrade their use of digital technology, data analytics, including Artificial Intelligence tools to effectively use a strong data base already available in the country from NADRA and other documented sources so as to ensure that all income earners regularly comply with the tax requirements.
In conclusion, Abdul Aleem observed that OICCI members believe in the potential of Pakistan , despite challenges, which can be harnessed with positive and regular engagement of relevant authorities and private sector.
There is need to continuously improve and align policies and practices in Pakistan with the best in the region, to be able to attract sizeable FDI in the manufacturing , IT and services export and other job creating sectors.
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Karachi Chamber welcomes appointment of Hammad Azhar as Finance Minister
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday welcomed the government decision to appoint Hammad Azhar as the finance minister of the country.
Chairman Businessmen Group (BMG) & Former President KCCI Zubair Motiwala and President KCCI Shariq Vohra, while warmly welcoming the appointment of Hammad Azhar as Federal Finance Minister, stated that the business & industrial community of Karachi highly appreciates and fully supports Prime Minister’s prudent decision and hopes that the newly appointed Finance Minister would take necessary practical steps to deal with some of the major economic crises being faced by the country.
In a joint statement, Chairman BMG and President KCCI pointed out that Hammad Azhar will have to devise effective strategies on war-footing basis to deal with the menace of inflation which has terribly affected the lives of entire population, besides taking practical steps to bring down the exorbitant cost of doing business.
Uncertainty continues prevails in every nook and corner of the country as the COVID-19 pandemic still remains largely active and the overall situation, which was already very challenging, has been worsening day by day. It seems that the third spell of the deadly virus was more dangerous and it has triggered a lot of anxiety amongst various businesses therefore, the next budget has to be declared as a “Relief & Rescue Budget”, they added.
They opined that this change at the helm of affairs at the Ministry of Finance just ahead of budget has triggered some anxiety amongst business community and was likely to create a challenging situation hence, the government will have to take confidence building measures by taking the Karachi Chamber on board in the policy making process whether it was pertaining to SBP’s autonomy, budget making or any other taxation related issue.
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Stock market gains 97 points amid Eurobond launch
KARACHI: The stock market gained 97 points on Wednesday amid positive sentiments on launch of Eurobonds by Pakistan.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,588 points as against previous day’s close of 44,491 points, showing an increase of 97 points.
Analysts at Arif Habib Limited said that Pakistan’s launch of Eurobond and raising funds from international market was warmly greeted by PSX, which saw an upside of 642 points during the session and ended 97 points.
E&P, Cement, O&GMCs and Steel sectors performed well whereas Refinery and Tech proved to be very volatile, where stocks hit lower circuit after trading at high rates during the session.
A hint towards opening up trade with India also boosted investors’ confidence, where among listed sectors, Cement is anticipated to be a key beneficiary from export of cement. Among scrips, BYCO topped the volumes with 73.2 million shares, followed by TRG (39 million) and PRL (31.1 million).
Sectors contributing to the performance include Fertilizer (+24 points), Cement (+24 points), E&P (+22 points), Banks (+19 points), Tech (-35 points), Textile (-17 points).
Volumes increased from 339.1 million shares to 443.9 million shares (+31 percent DoD). Average traded value also increased by 25 percent to reach US$ 169.7 million as against US$ 135.9 million.
Stocks that contributed significantly to the volumes include BYCO, TRG, PRL, UNITY and GGL, which formed 42 percent of total volumes.
Stocks that contributed positively to the index include ENGRO (+31 points), UBL (+28 points), POL (+20 points), SYS (+20 points) and SRVI (+17 points). Stocks that contributed negatively include TRG (-52 points), HBL (-30 points), COLG (-20 points), HUBC (-11 points) and FFC (-10 points).