Author: Mrs. Anjum Shahnawaz

FBR invites income tax proposals for budget 2021/2022

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday invited income tax proposals for budget 2021/2022 and asked stakeholders to submit the same by February 15, 2021.

The FBR asked the tax offices, including Large Taxpayers Offices (LTOs), Medium Tax Offices (MTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs), and trade and industries that the proposals should focus on broadening the tax base for a wide participation in revenue generation efforts.

The FBR advised that suggestions should in the following policy areas:

Broadening of tax base for a wider participation in revenue generation efforts;

Taxation of real income on progressive basis;

Phasing out of tax concessions and exemptions;

Removal of tax distortions and anomalies;

Facilitation of taxpayers and ease of doing business;

Promoting equity in taxation by introducing measures where incidence of tax is higher on affluent classes.

The stakeholders have been asked to provide proposals in a prescribed formation that should include relevant sections/clauses or rules where amendment is sought. The proposals related to any section of Income Tax Ordinance, 2001 or any rule to Income Tax Rules, 2002 should be presented along with rationale and revenue impact.

January 13, 2021
Small traders seek FPCCI help in taxation, lockdown

KARACHI: Small traders have sought help of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in resolving their major issues including taxation and coronavirus related lockdown situation.

In this regard a delegation of All Karachi Tajir Ittehad (AKTI) under the leadership of Chairman Atiq Mir visited the FPCCI to felicitate Mian Nasser Hyatt Maggo newly elected President of FPCCI on his success.

The delegation shared its concerns over the issues of taxes, lockdown situation, the anti-encroachment drive of Government, maintenance of infrastructure, emergent situations during urban flooding, and fire incidents.

Mian Nasser Hyatt Maggo President FPCCI said that unfortunately, the megapolis is lacking the chambers for SMEs, cottage industry, and the small traders, he suggested the step by step actions to resolve the issues of markets and business community, starting from a marked area and creating the best service model and carry on the successfully tested procedure throughout the city.

He assured the social service of FPCCI to all business community without any discrimination. He proposed the delegation for a workable concept paper to set a line of action.

The meeting suggested FPCCI, being the head institute of business and industry, to support in markets sustainability and small business enterprises of Karachi.

A working group may be formed for assessing and resolving the issues under the umbrella of FPCCI.

The small business sector is willing to avoid protest for their rights if FBR announces to facilitates the taxpayers and implement business-friendly modules of tax collecting.

Mian Nasser Hyatt Maggo President FPCCI further advised the delegation to produce a pre-budget suggestion paper in the perspective of their issues, which can be included in FPCCI pre-budget recommendations to the Ministry of Finance, Government of Pakistan

The meeting was attended by Athar Sultan Chawla, Hanif Lakhani Vice Presidents FPCCI and the AKTI members.

January 13, 2021
Foreign investors contribute Rs16 billion for minimizing coronavirus impact

KARACHI: The foreign investors operating in Pakistan have contributed Rs16 billion in different CSR activities and for containment of the negative impact of coronavirus.

In addition to monetary contributions the CSR activities of OICCI members included investment of their employees’ time in different value adding social activities across Pakistan with the underlying commitment to uplift the underprivileged strata of the society and support them during this most challenging time in recent memory brought about by the advent of the Corona pandemic, a statement said on Wednesday.

About 100 of the leading foreign investors, members of the Overseas Investors Chamber of Commerce and Industry (OICCI), actively participated in support of the GOP’s effort to fight the pandemic of COVID-19, without stepping back from their continuing commitment to CSR activities which benefit the marginalized communities across the country.

Haroon Rashid, President OICCI applauded: “OICCI members who have been leading the contribution towards CSR initiatives and are recognized as a role model to motivate other businesses and affluent individuals“.

“Over the last few years, there has been a noticeable enhancement in the sustainability and CSR initiatives by the OICCI members through a proactive engagement between business and all stakeholders in society. OICCI members have adopted the best CSR and Sustainability practices, largely in line with the United Nations Sustainable Development Goals (UN SDGs) to meet the growing needs of the society,” Haroon added.

The annual Corporate Social Responsibility (CSR) Report 2019-2020 brings out the essence of the CSR activities of about half of OICCI members who during 2019-20, collectively, invested about PKR 8 billion on CSR related activities, excluding those on COVID-19 mentioned above, and reached out to around 62 million direct beneficiaries throughout Pakistan.

OICCI members and their employees spent around 1.5 million man-hours and partnered with 160 social and development sector organizations in fulfilling their unique CSR programs.

The reach of the CSR activities touched all provinces and the geographic distribution was 29% in Sindh, 26% in Punjab, 14% in Khyber Pakhtunkhwa, 12% in Baluchistan, 6% in FATA, and 8% each in Gilgit-Baltistan and Azad Kashmir.

In terms of specific UN SDGs, 79% of the OICCI members focused on (i) Health and Well-Being and (ii) Quality Education, especially new primary and secondary school facilities and vocational training programs for skills development.

Many of the members also actively supported health and nutrition related initiatives through donations to reputable hospitals, medical care camps and health awareness campaigns.

OICCI in a statement highlighted that the March 2020 pandemic challenge to OICCI members, and their stakeholders, was enormous and is still continuing.

However, due to international outreach of OICCI members, they led from the front and shared the best practices for protecting the health and wellbeing of their employees, business partners and other stakeholders.

None of the OICCI members laid off their workers due to slow down in the business activity at the outbreak of the pandemic.

Most of the OICCI members positively responded to the Government of Pakistan’s call for support in containing the spread of the pandemic, protecting the health and supporting economic needs of the underprivileged populace in the face of COVID-19 immediate challenge, and contributed about PKR 7.8 billion to various pandemic focused containment causes.

It is pertinent to mention that 63% of the members were focused on Gender Equality in support of ‘OICCI Women’ initiative which is gaining momentum since its launch in 2017. “We believe the OICCI Women initiative could become a motivating factor for other businesses in Pakistan to raise the level of women participation, thereby contributing towards a rapid economic growth of the country,” M. Abdul Aleem, Secretary General OICCI commented.

OICCI Corporate Social Responsibility (CSR) Report 2019-2020 released yesterday gives details of the contributions of the member companies, working across the country, in a number of diverse social sectors.

OICCI is the collective body of top 200 foreign investors in Pakistan, belonging to 35 countries, who are also the largest contributor to the economy of Pakistan besides being the largest foreign investors.

January 13, 2021
Rupee gains two paisas against dollar

KARACHI: The Pak Rupee gained two paisas against the dollar on Wednesday amid higher demand for import and corporate payments.
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January 13, 2021
PTA renews PTCL’s license for next 25 years

The Pakistan Telecommunication Authority (PTA) has officially renewed the operational license of the Pakistan Telecommunication Company Limited (PTCL) for the next 25 years.
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January 13, 2021
FBR attributes export growth to incentives, facilitation

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that the significant growth in export was mainly due to integrated strategy for duty and tax incentives and other facilitation.

The FBR has devised an Integrated Strategy which has amply contributed to significant increase in exports of Pakistan from $1.6 billion (in August, 2020) to $2.4 billion (in December, 2020).

Growth in exports of Pakistan in December, 2020 is up by 18.3 per cent as compared to $1.993 billion in the corresponding month last year.

While mentioning factors that have facilitated growth in exports, FBR has stated that Import duties on 1,623 tariff lines, pertaining to basic raw material and intermediate goods were reduced to zero through the Finance Act, 2020.

In pursuance of this strategy, additional customs duties and regulatory duties on 164 items related to textile sector, not manufactured in the country, were also removed in collaboration with all the stakeholders.

All these measures were undertaken with the objectives of neutralizing adverse impact of COVID 19 Pandemic, especially for the exporters, and to make their products competitive vis-à-vis those of their competitors in the international market.

Under the initiative of “Make in Pakistan”, the Duty Drawback rates for at least eight (08) sectors were revised upwards by FBR. During the whole exercise, more than 434,000 claims were disposed of and approximately 7800 exporters have benefited from this Initiative.

Similarly, FBR has paid ninety (90) percent more refunds of Sales Tax during July-December, 2020 as compared to the corresponding period last year.

This led to significant rise in volumes of exports in the form of increase in TEUs (i.e. Tonnage Equivalent Units) / Containers from 35,477 in July, 2020 to 62,591 in December, 2020, showing a growth of 43 percent.

In order to tangibly contribute to exports, all the Export Facilitation Schemes were simplified / rationalized for their optimal use by the exporters.

First of all, extension in utilization period of different export facilitation schemes was allowed for a period of one year from 01st March, 2020 to 28th February, 2021.

Secondly, retention period for plant and machinery, under the Export Oriented Units Scheme, was reduced from 10 years to five years.

Thirdly, for the prompt redressal of grievances, one administrative tier is reduced (under Duty and Taxes Remission for Export Scheme and Manufacturing Bond Scheme) and Regulatory Authority is created to facilitate the exporters.

Moreover, the investors in Export Processing Zones have been facilitated in payment of duties/taxes on the disposal of machinery in the tariff area.

These facilitation measures have led to increase in number of exports Goods Declarations (GDs) from 71,190 in July, 2020 to 79,756 in December, 2020, posting an increase of 11 percent.

In the same vein, total number of Exports Goods Declarations (GDs) (from 1st July, 2020 to 31st December, 2020), remained at 408,472 vis-à-vis 333,943 during 1^st January, 2020, showing an increase of 18 percent.

To realize the objective of facilitation / promotion of exports, an automated system of filing the claim to the final sanctioning of Duty Drawback Claims for the payment of Duty Drawback Claims to the exporter was rolled out on 1st October, 2020. As a matter of fact, export Goods Declaration filed in Customs WeBOC system is being considered as the Duty Drawback Claim. State Bank of Pakistan credits the system sanctioned payments in the accounts of exporters online directly.

In addition to the said automation initiative, Green Channel clearances of the exports GDs / Consignments were increased from 74 percent in July, 2020 to 77.3 percent in December, 2020.

Similarly, for speedy payment of Sales Tax refunds to exporters, FASTER PLUS System has been implemented.

FBR has also removed regulatory duty on import of cotton yarn, till 30^th June, 2021, which is a basic raw material for the value-added textile industry of Pakistan.

Being committed to the national goal of increase in exports, Federal Board of Revenue is making all out efforts to assist exporters by continuously making improvements in its laws and procedures.

January 13, 2021
Procedure for importers registration for customs clearance

KARACHI: Commercial and non-commercial importers are required to get registered with Pakistan’s online WeBOC system for clearance of consignments.

In order to access the online Customs portal WeBOC, the person would first have to register themselves with Federal Board of Revenue (FBR).

WEBOC EXTERNAL USER REGISTRATION FORM

NTN Number *

STRN *

Business Name *

Business Address *

Contact Person Name *

Contact Person CNIC *

Phone Number 1 *

Phone Number 2

Fax Number

Cell Number *

Contact Person Email id *

Bank Name

Branch City

Branch Name

Account Number

License Number

Collectorate

Warehouse (In case of Warehouse )

Shipping Line Type (In case of Shipping Line )

Location (In case of Terminal Operator)

Documents Requires incase of Sub Type :

Commercial

1. Copies of CNIC’s of Proprietor

2. Copy of NTN duly verifiable form www.fbr.gov.pk

3. Copy of STRN duly verifiable from www.fbr.gov.pk

Non-Commercial

1. Copies of CNIC’s of Partners

2. Copy of NTN duly verifiable form www.fbr.gov.pk

3. Copy of STRN duly verifiable from www.fbr.gov.pk

4. Copy of Current Airway Bill

Embassy

1. Copies of CNIC’s/Passport of the authorized person

2. Copy of NTN duly verifiable form www.fbr.gov.pk

3. Authority letter from Head of Embassy

Trust

1. Copies of CNIC’s of Managing Trustee and other trustee

2. Copy of NTN duly verifiable form www.fbr.gov.pk

3. Copy of Trust Deed

Government Department

1. Copies of CNIC’s of directors

2. Copy of NTN duly verifiable form www.fbr.gov.pk

3. Copy of STRN duly verifiable from www.fbr.gov.pk

Undertaking as per format on judicial paper of Rs100/-

PROCEDURE FOR REGISTRATION

1. Submission of application to Deputy/Assistant Collector WeBOC User-ID Section, along with supportive/required documents

2. Personal appearance of applicant before Deputy / Assistant Collector User-ID Section with original CNIC.

3. Process of taking digital picture and thumb impression of the applicant upon personal appearance.

4. Visit of the Business premises (wherever required)

5. Acceptance/Rejection of Application.

6. Creation of User-ID in case of acceptance of application

7. Issuance of Login-ID and automatic sending of computer generated password to the applicant through email.

January 13, 2021
Gas crisis: one day complete shutdown announced for captive power units

KARACHI: The Sui Southern Gas Company Limited (SSGC) on Tuesday announced a complete shutdown of supply for industries during next 24 hours considering the ongoing gas crisis.

According to a statement a 100 percent closure to be observed by captive power units of all industries including export oriented starting 0000 hours on Wednesday January 13, 2021 to 0000 hours on Tuesday January 14, 2020.

The SSGC informed all industrial association that presently its franchise is experiencing an emergency situation. “Our two major gas fields have faced technical problems and curtailed 55 MMCFD gas,” it said, adding that SSGC system is completely depleted and severe low pressure is being faced across the franchise, particularly, in Karachi.

As per CCOE directive, SSGC announced one-day closure for Sunday, January 10, 2021 and the same was withdrawn to accommodate the consumers after the electricity shutdown in the whole country.

“Considering the above gas crisis, request our esteemed consumers to extend their cooperation by curtailing their gas consumption for 24 hours, starting 0000 hours on Wednesday January 13, 2021 till 0000 hours on Thursday January 14, 2021.

January 13, 2021
FBR issues AML/CFT guidelines for accountants to comply with FATF conditions

KARACHI: Federal Board of Revenue (FBR) has issued guidelines for accountants related to Anti-Money Laundering (AML)/Counter Financing of Terrorism (CFT) laws to comply with conditions of Financial Action Task Force (FATF).

The guidelines have been prepared jointly by Pakistan’s three designated AML/CFT supervisors of accountants in Pakistan, namely The Institute of Chartered Accountants of Pakistan (ICAP), the Institute of Cost and Management Accountant of Pakistan (ICMAP) and the FBR.

Accountants are only subject to AML / CFT measures if they provide the specified activities or services as defined in the Anti Money Laundering Act (AMLA) Sections 2 (xii) (c) (d).

All accountants, therefore, should review Section 4 in the Guidelines to determine whether they provide the specified services, and if so, what are the AML / CFT requirements, and how to implement the requirements.

These are further explained in Sections 5 to 12 of the Guidelines.

The Guidelines are focused on AML / CFT measures such as risk assessment, AML / CFT programme, CDD, beneficial ownership, politically exposed persons, targeted financial sanctions, Suspicious Transaction Report (STR), Currency Transaction Report (CTR) and record keeping. Those measures are further explained in the Guidelines.

The guidelines do not add new regulatory requirements upon accountants.

The guidelines do not address the broader criminal conduct associated with those who engaged in, or aid or abet those engaged in money laundering (ML) or terrorism financing (TF). Those criminal offences under the AMLA and other laws apply to all persons’ subject to Pakistan’s laws.

In addition to the AMLA, the three main regulations referred to in the Guidelines are:

The Anti-Money Laundering and Combating Financing of Terrorism Regulations for Cost and Management Accountants Reporting Firms (SRB AML / CFT Regulations for Reporting Firms)

The Anti-Money Laundering and Combating Financing of Terrorism Regulations for Chartered Accountants Reporting Firms (SRB AML / CFT Regulations for Reporting Firms)

The Federal Board of Revenue Anti-Money Laundering and Combating Financing of Terrorism Regulations for Designated Non-Financial Businesses and Professions (FBR AML / CFT Regulations for DNFBPs)

AML / CFT Sanction Rules 2020 SRO NO 950(I)/2020 (AML / CFT Sanction Rules)

Both the ICAP and ICMAP, as Self-Regulatory Bodies (SRBs), have been designated by Federal Government pursuant to AMLA (Section 6A) as AML / CFT regulatory authorities.

To avoid repetition and any perceived favouritism, and purely for the purposes of the Guidelines, the two professional bodies will be referred to as “SRBs” and their AML / CFT regulations collectively referred to as the “SRB AML / CFT Regulations for Reporting Firms”. Except for the name of the SRB, the two regulations are identical.

The FBR AML / CFT Regulations for DNFBPs are very similar to the SRB AML / CFT Regulations for Reporting Firms. However, they are not identical in terms of numbering and there are sector specific requirements covering other DNFBPs that are not applicable to accountants (accountants licensed by ICAP and ICMAP). For these reasons, they are referred separately in the Guidelines.

The FATF Recommendations of specific concerns to accountants are those covering DNFBPs. DNFBPs include the following:

 Casinos

 Real estate agents

 Dealers in precious metals and stones

 Trust and company service providers

 Lawyers, notaries, other independent legal professionals and accountants – when they prepare for or carry out transactions for their customer concerning the following activities:

— buying and selling of real estate;

— managing of customer money, securities or other assets;

— management of bank, savings or securities accounts;

— organization of contributions for the creation, operation or management of companies;

— creation, operation or management of legal persons or arrangements, and buying and selling of business entities.

FBR explains accountant as sole practitioners, partners or employed professionals within professional firms when they prepare for or carry out transactions for their client concerning the following activities:

Accountancy services – when carryout monetary transactions for their customers concerning the following activities:

(I) managing, operating, buying and selling of real estate, legal persons and legal arrangements and preparing documents therefore;

(II) managing of client money, securities or other assets;

(III) managing bank, savings or securities accounts; or

(IV) organizing contributions for the creation, operation or management of companies

Trust and company formation services – when they carry out monetary transactions or services for a client concerning the following activities:

(I) acting as a formation agent of legal persons;

(II) acting as or arranging for another person to act as a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;

(III) providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;

(IV) acting as or arranging for another person to act as a trustee of a trust or performing the equivalent function for another form of legal arrangement; or

(V) acting as or arranging for another person to act as a nominee shareholder for another person.

January 12, 2021
Authorities seal 192 illegal pumps selling smuggled petroleum products

ISLAMABAD: The customs authorities, in collaboration with other law enforcement agencies, have sealed approximately 192 illegal fuel stations selling smuggled petroleum products, the federal cabinet was informed on Tuesday.
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January 12, 2021