Author: Mrs. Anjum Shahnawaz

Country imports mobile phones worth Rs153.6 billion in first half

ISLAMABAD: The country has imported mobile phones worth Rs153.6 billion during the first half (July – December) 2020/2021 owing to rising demand for digital transactions in the wake of the covid pandemic.

The import of mobile phones increased by 59.44 percent during the first half of the current fiscal year.

The import of mobile phones during the first half of the current fiscal year was Rs153.6 billion as compared with Rs96.33 billion in the corresponding period of the last fiscal year, according to data released by the Pakistan Bureau of Statistics (PBS).

Market sources said that coronavirus pandemic had limited the physical movement, which had given rise to online transactions. Mobile phones have played a major role in promoting the digital economy.

Further, the implementation of laws making it mandatory that only verified mobiles through the Pakistan Telecommunication Authority (PTA) to be activated for local services has also discouraged informal channels for the import of mobile phones.

They said that the depreciation of the Pak Rupee had also an impact on the surge of mobile phone imports.

The import of mobile phones in terms of dollar grew by 52.37 percent to $939 million during the first half of the current fiscal year when compared with $616 million in the same half of the last fiscal year.

January 16, 2021
Weekly Review: market likely to stay positive on earning expectations

Karachi: The stock market likely to remain positive during the next week on the back of healthy earnings expectations, analysts said.

The analysts at Arif Habib Limited said that the market to remain positive on the back of healthy earnings expectations, which will drive the index.

Moreover, the ongoing rollout of vaccines across the globe will most likely keep equity markets buoyant.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2021) compared to the Asia Pac regional average of 17.9x and while offering DY of around 6.2 percent versus 2.5 percent offered by the region.

The market commenced on a positive note briefly on the back of the government and power companies reaching a master agreement, breaching 46,000 level on Monday.

Governor SBP’s statement regarding IMF program revival kept sentiment positive. Furthermore, the announcement of auto sales figures by PAMA (15 percent YoY growth in December 2020) ignited bullish sentiments in the Automobile Assemblers Sector.

Expectations of better corporate results particularly amongst cyclical sectors kept the overall sentiment buoyant.

The KSE-100 Index closed at 45,931 points, gaining 277 points (up 0.61 percent) WoW.

Sector-wise positive contributions came from:

i) Technology & Communication (168 points),

ii) Power Generation & Distribution (66 points),

iii) Engineering (41 points),

iv) Glass & Ceramic (37 points), and

v) Textile Composite (34 points).

Whereas, sectors that contributed negative included:

i) Fertilizer (63 points),

ii) Tobacco (30 points) and

iii) Oil & Gas Exploration Companies (27 points).

Scrip-wise positive contributions were led by i) SYS (89 points), ii) TRG (82 points), iii) INIL (42 points), iv) KAPCO (42 points), and v) GHGL (37 points).

Foreign selling this week clocking-in at USD 2.1 million compared to a net buy of USD 3.4 million last week. Selling was witnessed in Cement (USD 0.9 million) and FMCG (USD 0.8 million).

On the domestic front, major buying was reported by Individuals (USD 24.0 million and Banks / DFIs (USD 1.2 million).

Average volumes arrived at 682 million shares (up by 9 percent WoW). Whereas, average value traded settled at USD 129 million (down by 16 percent WoW).

January 16, 2021
Criteria for selection, conduct of income tax audit

Islamabad: The Federal Board of Revenue (FBR) has adopted a criteria for selection and conduct of income tax audit under Section 214C of the Income Tax Ordinance, 2001.

The criteria have been explained under updated Income Tax Rules, 2002, tax officials said.

Selection and conduct of audit.-

(1) This rule shall apply to selection of cases for audit by the FBR under section 214C of the Income Tax Ordinance, 2001 (XLIX of 2001).

(2) The following steps shall be followed for selection of cases for audit through a computer ballot on random and parametric selection basis for tax years mentioned therein, namely:-

(a) data of all returns (e-filed and manually filed) shall be utilized as a basic data;

(b) the Board shall decide the cases of persons or classes of persons which are to be excluded from audit selection and such exclusions shall be publicized each year through FBR’s web-portal for information, prior to the process of balloting or selection;

(c) cases falling under exclusions shall be identified and such cases shall be excluded from the data to be used for balloting;

(d) the data of the remaining cases shall be utilized for computer ballot for audit selection;

(e) for each tax year cases for audit shall be selected in accordance with the predetermined percentage, to be publicized through FBR’s web-portal, and prior to the balloting process, each year;

(f) immediately after computer ballot, the lists of selected case shall be generated and placed on FBR’s web-portal;

(g) the whole balloting system for audit selection shall be based only on the NTNs/ CNICs of the filers;

(h) the NTNs and CNICs of the cases selected for audit shall be communicated to concerned RTOs and LTUs as per their respective jurisdictions;

(i) for the purpose of selection of cases on parametric basis, risk parameters for persons or classes or persons to be used for balloting, wherever necessary, shall be determined by the Board, as under:-

(A) risk parameters for persons or classes of persons to be used for balloting shall be determined by the Board;

(B) audit selection parameters may be based upon the following:-

(I) financial ratios for the year viz a viz the history of the case;

(II) financial ratios viz a viz industrial, sectoral or national ratios;

(III) industrial comparisons or bench marks;

(IV) quantum of losses or refunds beyond certain thresholds; or

(V) compliance history; and

(j) computer balloting process in both categories of selection for audit shall be held in the presence of representatives from Chambers of Commerce and Industries and representatives of Tax Bar Associations.

(3) The cases selected for audit by the Board shall be processed and the Commissioner Inland Revenue concerned shall issue intimation letter to the taxpayer about the selection of his case for audit with the following details:-

(a) section under which selection has been made;

(b) tax year for which the case has been selected for audit;

(c) mode of selection whether random or parametric;

(d) compliance requirements on the part of taxpayer e.g.-

(i) provision of prescribed books of accounts;

(ii) supporting information and documents, etc;

(iii) computerized data, access to computerized data or provision of attested hard copies of computerized data.

(4) On completion of examination of books of accounts, data or information under this rule the discrepancies, if found, shall be intimated to the taxpayer for obtaining taxpayers’ explanation, in the form of audit report, seeking taxpayer’s explanation on these points.

(5) Explanations of the taxpayer, where found not acceptable, shall be intimated to the taxpayer, through a notice under section 122(9) of the Income Tax Ordinance, 2001 about the amendment in assessment along with the rationale or basis of such amendment and necessary amendment in assessment order shall be passed under section 122 of the said Ordinance after affording adequate opportunity of hearing to the taxpayer.”

January 15, 2021
Petrol per liter price increased to Rs109.20

Islamabad: The government on Friday announced increase in prices of petroleum products for next fortnight and fixed Rs109.20 for per liter petrol, a statement said.

The new prices will be implemented with effect from January 16, 2021.

The price of petrol has been increased by Rs3.2 per litter to Rs109.20 from previous rate of Rs106.

The rate of high speed diesel has been enhanced by Rs2.95 per liter to Rs76.65 from Rs73.65.

The price of kerosene oil has been increased by Rs3 per liter to Rs76.65 from Rs73.65.

The rate of light diesel oil has been increased by Rs4.42 per liter to Rs76.23 from Rs71.81.

The new prices of petroleum products are effective till January 31, 2021.

January 15, 2021
Authorities seal 609 illegal pumps; recover 4.5 million petrol, diesel

Islamabad: Pakistan Customs with the assistance of law enforcement agencies has sealed around 609 illegal pumps selling smuggled petroleum products.

Besides, around 4.5 million liters of smuggled petrol and diesel have also seized during the operation, a statement issued by the PM office said on Friday.

The authorities have initiated crackdown against the illegal fuel stations on the directives of Prime Minister Imran Khan.

An across-the-board and non-discriminatory action under the ministry of interior is on full swing, which has started yielding positive results, the PM office said.

In case, owners of the sealed fuel station remain unable to produce authentic documents within seven days of the action, the State will be authorized to confiscate their pump along with other properties under the Custom Act, it said.

Non-production of documents will deem the fact that the properties were acquired through illegal means of smuggling, it added.

January 15, 2021
Share market ends down by 58 points on selling activity

Karachi: The share market fell by 58 points on Friday owing to selling activity observed during the day, analysts said.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,931 points as against previous day’s close of 45,990 points, showing a decline of 58 points.

The analysts at Arif Habib Limited said that the market traded in a narrow range between -114 points and +188 points, closing the session -58 points.

Selling activity was observed almost across the board, but was more prominent in cement, banks and O&GMC sectors.

Engineering (Steel) sector performed well in relative terms on the back of expectation of an increase in product prices. Among scrips, HUMNL topped the volumes with 66.3 million shares, followed by POWER (45.2 million) and FFBL (23.7 million).

Sectors contributing to the performance include Banks (-50 points), Cement (-33 points), Fertilizer (-20 points), Tobacco (-18 points) and Chemical (-16 points).

Volumes declined further from 620.7 million shares to 531.1 million shares (-15 percent DoD). Average traded value also declined by 10 percent to reach US$ 111.3 million as against US$ 123.6 million.

Stocks that contributed significantly to the volumes include HUMNL, POWER, FFBL, TRG and KOSM, which formed 33 percent of total volumes.

Stocks that contributed positively to the index include HUBC (+24 points), NATF (+18 points), GHGL (+13 points), INIL (+11 points) and APL (+11 points). Stocks that contributed negatively include MCB (-22 points), HBL (-20 points), PAKT (-18 points), LUCK (-11 points) and EFERT (-10 points).

January 15, 2021
FBR promotes Customs officers to BS-18

Islamabad: Federal Board of Revenue (FBR) on Friday notified promotion of officers of Pakistan Customs Service (PCS) from BS-17 to BS-18.

The following BS-17 officers of Pakistan Customs Service are promoted to BS-18 on regular basis with immediate effect:-

1. Nawabzada Kamran Khan Jogezai

2. Ubaidullah

3. Farhat H. Khan

4. Ali Mohtashim Minhas

5. Muhammad Hamza Lak

6. Abeer Javaid

7. Sadaf Noor Elahi

8. Quratulain Ramay

9. Umair Zahid

10. Syeda Sadaf Ali Shah

11 . Shah Samad Hamadani

12. Akmal Shahzad

13. Saleem Tahir

14. Ameer Ahmad

The FBR said that the officers may actualize their promotions at their present place of posting.

The officers, who are drawing performance allowance, will continue to draw the same after promotion.

Through another notification the FBR said that officers Pakistan Customs Service from BS-17 to BS-18 were considered for promotion by the Departmental Promotion Committee on December 31, 2020.

The committee recommended the following officers for promotion subject to completion of satisfactory missing Performance Evaluation Reports (PERs) mentioned against each without adverse remarks.-

Malik Muhammad Ahmed 01.07.2019 to 15.02.2020

All Asad 01.10.2019 to 30.06.2020

Shakeel Ahmed 01.07.2019 to 30.06.2020

Mustafa Zamir 01.07.2018 to 02.02.2019

Ms. Asma Javed Paracha 01.07.2019 to 30.06.2020 2.

The promotion of above named officers shall be notified on meeting the said condition, the FBR added.

January 15, 2021
Rupee falls by 15 paisas ahead of weekly holidays

Karachi: The Pak Rupee came down by 15 paisas against the dollar on Friday due to demand for import and corporate payments ahead of weekly holidays.

The rupee ended Rs160.33 to the dollar from the previous day’s closing of Rs160.18 in the interbank foreign exchange market.

The demand for the dollar was remained high during the day due to the next two days weekly holidays. The dealers said that the market had seen the demand for advance payment from importers and corporate buyers.

They said that the inflows of workers’ remittances and export receipts were remained encouraging in the current fiscal year, which would help the rupee gain value in the coming days.

January 15, 2021
Budget 2021/2022 to focus on easing tax burden: Member IR

Karachi: The upcoming federal budget will ease the burden on the industrial sector to reduce the cost of doing business to facilitate industrial and exporters, Dr. Muhammad Ashfaq, Member Inland Revenue (Operations), Federal Board of Revenue (FBR), said on Friday.

The Member was addressing the members of Karachi Chamber of Commerce and Industry (KCCI) during his four day visit to the city.

The Member said that the FBR was working on a policy to reduce the cost of doing business.

He said that it was encouraging that export orders were increasing. Further, a report of the State Bank of Pakistan (SBP) pointed out a reduction in the cost of doing business.

“The budget 2021/2022 will focus on reducing the cost of production. Further, the priority will be easing the tax burden on the industrial sector,” the Member added.

FBR receives numerous budget suggestions every year, he said, adding that the KCCI should send essential proposals.

The Member said that the condition of CNIC was part of the statute. He also said that audit was part of the taxation system.

He said that the FBR would introduce a new tax policy in the next three months. The Member said that refunds would be paid when claimed.

January 15, 2021
Sales tax registration may be suspended on non-filing of returns for six consecutive months

ISLAMABAD: Federal Board of Revenue (FBR) may suspend sales tax registration of a taxpayer who fails to file returns for six consecutive months, officials said on Thursday.

The officials said that a commissioner of Inland Revenue may suspend registration of a taxpayer, if the person is found to have issued fake invoices, evaded tax or committed tax fraud without prior notice, pending further inquiry.

Suspension of registration can occur due to the following possibilities:

Non-availability of the registered person at the given address;

Refusal to allow access to business premises or refusal to furnish records to an authorized Inland Revenue Officer;

Abnormal tax profile, such as taking excessive input tax adjustments, continuous carry-forwards, or sudden increase in turnover;

Making substantial purchases from or making supplies to other blacklisted or suspended person;

Non-filing of sales tax returns by a registered person for six consecutive months;

On recommendation of a commissioner of any other jurisdiction;

Any other reason to be specified by the Commissioner;

Impact of Suspension

Commissioner shall issue written order to the concerned registered person detailing the reasons for suspension. The order shall also be provided to all other Large Taxpayer Units (LTUs)/Regional Tax Offices (RTOs), the FBR‘s computer system, the STARR computer system and the Customs Wing computer system for information and necessary action as per law;

Suspension of registered person will make them ineligible to avail input tax adjustment/refund. Similarly, no input tax adjustment/refund shall be allowed to any other registered persons on the basis of invoices issued by such suspended person (whether issued prior to or after such suspension);

The suspended registered person will be issued a show cause notice (through registered post or courier service) within seven days of issuance of order of suspension by the Commissioner. The registered person will have an opportunity of hearing with fifteen days of the issuance of such notice clearly indicating that the will be blacklisted. In case of non-availability of the suspended person at the given address, the notice may be placed on the main notice Board of the LTO/RTO;

Where the show cause notice is not issued within seven days of the order of suspension, the order of suspension shall become invalid;

To become part of the Active Taxpayer List (ST), the Active Taxpayer must be a registered person who does not fall in the following categories:

Blacklisted or whose registration is suspended or blocked;

Failed to file return by the due date for two consecutive tax periods;

Failed to file Income Tax Return by the due date;

Failed to file two consecutive monthly or annual withholding tax statement.

A non-active taxpayer may be restored to active taxpayer status:

If the respective RTO/LTO recommends the same to FBR after conducting audit or other investigation; Competent Authority, Appellate Authority, Court or FTO orders for the restoration.

January 14, 2021