Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • TAX YEAR 2021: rate of advance tax on dividends

    TAX YEAR 2021: rate of advance tax on dividends

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance tax on dividends for tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendment brought through Finance Act, 2020.

    The FBR updated the rate of tax to be deducted under section 150 and 236S:

    (a) 7.5 percent in case of dividend paid by Independent Power Producers where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity.

    (b) 15 percent in mutual funds and cases other than those mentioned in clauses (a) and (ba); and

    (ba) 25 percent in case of a person receiving dividend from a company where no tax is payable by such company, due to exemption of income or carry forward of business losses under Part VIII Chapter III or claim of tax credits under Part X of Chapter III.

    According to Section 150: Dividends — Every person paying a dividend shall deduct tax from the gross amount of the dividend paid at the rate specified in Division I of Part III of the First Schedule.

    According to 236S: Dividend in specie — Every person making payment of dividend-in-specie shall collect tax from the gross amount of the dividend in specie paid at the rate specified in Division I of Part III of the First Schedule.

  • FBR registers 127 projects under construction industry incentive scheme

    FBR registers 127 projects under construction industry incentive scheme

    ISLAMABAD: Federal Board of Revenue (FBR) has registered around 127 projects worth Rs63 billion under Prime Minister’s construction industry incentive scheme, a spokesman said on Tuesday.

    The Prime Minister’s incentive scheme for builders and developers is now picking-up showing definite signs of success and great amount of interest by the construction industry.

    Till October 19, 2020, a total of 127 projects have been registered with a total projected cost of Rs63 billion.

    In addition, a total of 108 persons are also in the process of registering 114 projects at a projected cost of Rs109 billion.

    The registered projects from major cities include 61 projects from Karachi, Lahore 44, Islamabad 30, Rawalpindi 19, Faisalabad 10 and rest from other cities.

    The last date for registering projects under the scheme is December 31, 2020.

  • CNIC condition reduces transactions and revenue: FBR

    CNIC condition reduces transactions and revenue: FBR

    KARACHI: Federal Board of Revenue (FBR) has admitted that the condition of Computerized National Identity Card (CNIC) reduced number transactions as well as shortfall in revenue.

    “This [CNIC] condition has further reduced transaction and our revenue,” Dr, Muhammad Ashfaq Ahmed, Member, Inland Revenue, Federal Board of Revenue (FBR) quoted as saying in a statement issued by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) issued on Tuesday.

    The statement further quoted the Member that the FBR so far has resolved CNIC issues with the retailers and conditions will remain applicable at some stages.

    While responding to the issues raised by President FPCCI, the Member said that taxation is a by-product of business which is missing in our strategy, refunds are considered as oxygen for trade and industry while in practice to show revenue we ignored to payback refunds.

    The FBR is now following open door policy to facilitate industry and transparency is first in our strategy.

    He further said that FBR is changing its approach to deal with commercial exporters. He further agreed to extend the days of filing form H from 120 to 180 days.

    However, with the automation of FBR the trade and industry have to gear-up and be compatible with the latest technology.

    Earlier, FPCCI President Mian Anjum Nisar appreciated the efforts of Federal Board of Revenue on achieving revenue targets despite difficult circumstances under COVID-19 pandemic.

    While welcoming the Member Inland Revenue (Operation) Dr. Muhammad Ashfaq Ahmed, the President FPCCI said that the release of refunds has slightly improved but industry paid taxes and salaries during the period when labour was idle and industries were stalled.

    He mentioned that irrespective of gain or loss businesses have to pay 1.5 percent tax despite the issue has been discussed with Advisor to PM and Chairperson FBR but matter still not resolved.

    It was also informed that FASTER will release refunds within 72 hours but practically refunds are being released within 72 hours.

    Further President FPCCI strongly suggested extending the filing of Form “H” period from 120 days to 180 days, and demanded a focal person to deal with affairs relevant to FASTER.

    He also raised a question on shifting of final tax regime to minimum tax and proposed to reversed if there is no conditionality and payback refunds or ask for amount if due and vice versa, he also proposed to NTC deal issue of raw material that were previously falls under 12th schedule and demanded restoration of SRO 1125.

    Mian Anjum Nisar President FPCCI also raised the issue of Audit at different tiers and proposed that stages/tiers level of audit should be minimized.

    CNIC still has not resolved despite available agreement between businesses and government. President FPCCI also raised issues of different sectors such inclusion of Edible Offal in the definition of Agriculture, inability of FATER system for processing of Multi-tax period carry-forward based sales tax refunds. Uniform rate of tax on Iron and Steel flat products and issue of Audit being faced by trade and industry.

    Meeting was attended by representative of various chambers and association, Kurram Ijaz, Vice President, Zakaria Usma, Shaukat Ahmed, Ghani Usman, Saqib Fayyas, Shabir Mensha, Khursheed, member FPCCI Advisory Committee, Khuram Saeed, former Vice President FPCCI, EC and General Body members.

  • Meezan Bank declares healthy profit of 65 percent in nine months

    Meezan Bank declares healthy profit of 65 percent in nine months

    KARACHI: Meezan Bank Limited on Tuesday announced healthy profit of 65 percent for nine-month period ended September 30, 2020.

    According to financial results submitted to Pakistan Stock Exchange (PSX), the bank declared profit after tax of Rs18 billion for the nine-month period ended September 30, 2020 as compared with Rs10.94 billion in the corresponding period of the last year.

    The bank also declared earnings per share of Rs12.78 for the period under review as compared with Rs7.73 in the corresponding period of the last year.

    Total income of the bank registered 43 percent increase to Rs56.92 billion during the period as compared with Rs39.88 billion in the same period of the last year.

    Operating expenses of the bank grew by 22.43 percent to Rs21.88 billion for the period ended September 2020 as compared with Rs17.87 billion in the same period of the last year.

    The gross profit of the bank witnessed a growth of 58 percent to Rs30 billion for the nine-month period as compared with Rs19 billion in the same period of the last year.

    Alongside result, the bank announced a cash dividend of Rs4.0 share.

    Analysts at Topline said that the result came in higher than our expectations due to lower than expected profit expensed on deposits, which is most likely driven by continued focus on Current Account growth and possible re-pricing of maturing Term Deposits.

    Profit earned on assets depicted a decline of 9 percent Quarter on Quarter (QoQ). Along with lower interest rates, 1 percent QoQ decline in industry loans amidst slowdown in economic activity has been the cause of the decline.

    Profit expensed on deposits substantially declined by 22 percent QoQ amidst re-pricing of liabilities to lower interest/profit rates, where non applicability of Minimum Deposit Rate (MDR) on Islamic banks would have also contributed.

    As a result, Net Spread Earned declined by just 1 percent QoQ.

    Other Income showed resurgence with a jump of 17 percent QoQ driven by increase in Fee Income growth of 49 percent QoQ as branch operation resumed after lifting of COVID-19 lockdown.

    Despite the branch expansion strategy, other expenses were kept in check (down 0.1 percent QoQ). Cost to Income for the quarter stood at 40 percent.

  • SBP issues criteria for investment in dollar certificates by resident Pakistanis

    SBP issues criteria for investment in dollar certificates by resident Pakistanis

    KARACHI: State Bank of Pakistan (SBP) on Tuesday issued criteria for investment by resident Pakistanis in US Dollar denominated Naya Pakistan Certificates (NPCs).

    The SBP said that resident Pakistanis having assets abroad as declared in their latest wealth statement filed with the Federal Board of Revenue (FBR) may invest in USD-denominated NPCs by opening a Foreign Currency Value Account (FCVA), subject to the following conditions:

    (i) at the time of opening the FCVA, they must present their latest wealth statement filed with FBR, as prescribed in FE Circular No.2 of 2020 dated 5th August 2020 or a signed affidavit stating the value of their assets held abroad as declared in their latest wealth statement filed with FBR;

    (ii) the investment must be funded by remittance from abroad; and

    (iii) their total investment (including the NPCs) through FCVA shall not exceed the value of assets abroad declared in the above-referred wealth statement plus such accretion, as may be attributable to interest and profit thereon and/ or gain on disposal thereof, in respect of which adequate evidence is provided in the form of bank statement, profit/ coupon and/or sale deed respectively.

    The agent banks thus while processing the investment requests in NPC or other permissible avenues by resident Pakistanis who have opened an FCVA with them shall ensure compliance with the conditions as stated above.

    The rest of the process for investment in NPC shall be the same as prescribed in FD Circular No.3 of 2020 dated 10th September 2020.

  • Share market up 616 points as investors’ positive expectation on FATF

    Share market up 616 points as investors’ positive expectation on FATF

    KARACHI: The share market experienced a robust rally on Tuesday, with the KSE-100 index of the Pakistan Stock Exchange (PSX) gaining 616 points, closing at 40,956. The surge comes as investors anticipate favorable outcomes from the upcoming FATF plenary session, which has boosted market sentiment.

    (more…)
  • Rupee gains 10 paisas against dollar

    Rupee gains 10 paisas against dollar

    KARACHI: The Pak Rupee gained 10 paisas against dollar on Tuesday owing to inflows of workers’ remittances and export receipts.

    The rupee ended Rs162.28 to the dollar from previous day’s closing of Rs162.38 in interbank foreign exchange market.

    Currency experts said that the market witnessed sufficient supply of the foreign currency which helped the local unit to gain the value.

    They said that positive sentiments were prevailed in the market. They hoped that improved economic indicators would help the rupee to gain further.

    Workers’ remittances remained above $2 billion for the fourth consecutive month in September.

    They increased to $2.3 billion, 31.2 percent higher than the same month last year and 9 percent higher than in August, the State Bank of Pakistan (SBP) recently said.

  • FBR invites applications for 322 vacant posts in Pakistan Customs

    FBR invites applications for 322 vacant posts in Pakistan Customs

    ISLAMABAD: Federal Board of Revenue (FBR) has invited job applications for vacant posts (BPS-01 to BPS-14) at various collectorates/directorates of Pakistan Customs. The last date for submission of applications is October 27, 2020.

    (more…)
  • TAX YEAR 2021: Rates of advance tax on imports

    TAX YEAR 2021: Rates of advance tax on imports

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance tax on imports for tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020. The FBR updated following rate of advance tax on import of goods:

    S.NoPersonsRate
    (1)(2)(3)
    1.Persons importing goods classified in Part I of the Twelfth Schedule1% of the import value as increased by customs-duty, sales tax and federal excise duty
    2.Persons importing goods classified in Part II of the Twelfth Schedule2% of the import value as increased by customs-duty, sales tax and federal excise duty
    3.Persons importing goods classified in Part III of the Twelfth Schedule5.5% of the import value as increased by customs-duty, sales tax and federal excise duty’;

    Provided that the rate specified in column (3),—

    (a) in the case of manufacturers covered under rescinded Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 as it stood on the 28th June, 2019 on import of items covered under the aforementioned S.R.O shall be 1%;

    (b) in case of persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan, as certified by the Drug Regulatory Authority of Pakistan shall be 4%:

    Provided further that the rate of tax on value of import of mobile phone by any person shall be as set out in the following table, namely:-

    S.No.C & F Value of mobile phone (in US Dollar) In CBU condition PCT Heading 8517.1219 Tax (in Rs.)  IN CKD/SKD condition under PCT Heading 8517.1211 Tax (in Rs.)
    (1)(2)(3)(4)
    1Up to 30 except smart phones700
    2Exceeding 30 and up to 100 and smart phones up to 1001000
    3Exceeding 100 and up to 2009300
    4Exceeding 200 and up to 3509700
    5Exceeding 350 and up to 5003,0005,000
    6Exceeding 5005,20011,500

  • KTBA demands date extension for filing sales tax return

    KTBA demands date extension for filing sales tax return

    KARACHI: Federal Board of Revenue (FBR) has been informed that many taxpayers were unable to file their sales tax returns for September 2020 as FBR’s web-portal was stopped functioning.

    Muhammad Zeeshan Merchant, President, Karachi Tax Bar Association (KTBA) in a letter on Monday apprised Muhammad Javed Ghani, Chairman, FBR about the malfunctioning of FBR’s web portal, which deprived many taxpayers in filing their sales tax returns for the period of September 2020.

    The FBR chairman was informed that KTBA members had faced immense problems in e-filing the monthly sales tax return for the tax period of September 2020 which was due on October 18, 2020.

    Merchant said that due to non-working of FBR web-portal for the last few days and it completely stopped functioning on Saturday October 17, 2020 and Sunday October 18, 2020.

    The KTBA president also highlighted that many of the CPRs which were paid by using ADC-payment option were not reflecting in banks folders and consequently taxpayers were unable to upload their tax challans and therefore were unable to e-file the sales tax return for the tax period ‘September 2020’.

    “Our members are also upset because they were not even in a position to apply for extension either manually or online as there is no provision available,” the KTBA president said.

    The FBR chairman has been urged to extend the date of e-filing the monthly sales tax return for the tax period ‘September 2020’ at the earliest to facilitate bar members and the compliant taxpayer to fulfil their legal obligation properly.