KARACHI: First Paramount Modaraba, managed by Paramount Investments Limited, announced the launch of its new Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) screening facility on Wednesday. This initiative aims to support the financial sector and other businesses in Pakistan in safeguarding themselves from the risks of money laundering and financial crimes.
(more…)Author: Mrs. Anjum Shahnawaz
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Rupee gains 39 paisas on sufficient inflows
KARACHI: The Pak Rupee gained 39 paisas against the dollar on Wednesday owing to significant inflows of export receipts and workers’ remittances.
The rupee ended at Rs163.48 to the dollar from the previous day’s closing of Rs163.87 in the interbank foreign exchange market.
Currency dealers said that the market witnessed sufficient supply of the foreign currency which helped the rupee to appreciate.
Workers’ remittances remained above $2 billion for the fourth consecutive month in September 2020.
They increased to $2.3 billion, 31.2 percent higher than the same month last year and 9 percent higher than in August.
On a cumulative basis, remittances rose to a record $ 7.1 billion in the first quarter of 2020/2021, 31.1 higher than the same period last year.
The dealers hoped that considering the inflows and buffer stock of foreign exchange reserves would help the local currency to make gain.
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FTO directs to enforce certificate of origin to prevent under invoicing
ISLAMABAD: Federal Tax Ombudsman (FTO) has directed tax authorities to enforce certificate of origin from respective country of manufacture.
The FTO recommended that the commerce ministry to frame and enforce rules of origin in respect of goods suspected of circumvention and import from free ports, which are not covered under preferential trade agreement (PTA).
The FTO made these recommendations in an order dated October 01, 2020 issued in the case of M/s Poplon Pakistan (Pvt) limited, which filed complaint against the Collector, Model Customs Collectorate (MCC) Appraisement & Facilitation – East and MCC Appraisement & Facilitation – West, Karachi for failing to detect import of inorganic chrome pigments against fake certificate of origin through circumvention of origin of goods and under invoicing by various importers in respect of goods imported and cleared through Karachi Port.
The complainant is a manufacturer of inorganic chrome pigments for use in paint, plastic and leather industries in Pakistan. The complainant alleged that after suspension of trade with India, pigment of Indian origin goods were imported through trade proxies such as M/s. Galaxy International FZC, UAE by using fake documents.
After hearing both the parties, the FTO issued the following recommendation, that the FBR:
To seek information from the Director General, UAE Customs under mutual legal assistance agreements for verification of origin of goods;
To direct the Directorate General of Post Clearance Audit (PCA) to carry out post-import transaction verification of all relevant GDs so as to satisfy the accuracy and authenticity of declared import values on the basis of export documents/information obtained through commercial counselors posted in South Korea and UAE;
To direct the Director of Customs Valuation to check accuracy of values declared by the importers and determine custom value for assessment of inorganic chrome pigments in terms of Section 25A of the Act, and
To direct the Chief Collector (Appraisement-South), to ensure finalization of investigation expeditiously and take appropriate action in cases where mis-declaration is established; and
To recommend to the ministry of commerce to frame and enforce rules of origin in respect of goods suspected of circumvention and import from free ports which are not covered under PTA. Also make it mandatory to furnish certificate of origin from respective country of manufacture duly verified by the respective government.
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FBR notifies draft rules for timely issuance of annual return forms
ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued SRO 1041(I)/2020 for timely issuance of annual income tax return forms in order to facilitate taxpayers and avoid unnecessary delays in return filing process.
The FBR proposed amendment to Income Tax Rules, 2002 through the SRO. A new rule 34A has been proposed to insert in the Income Tax Rules, 2002.
As per the rules the annual income tax return form shall be finalized and available by January 31 every year for the relevant tax year.
The procedure to finalize the return forms revealed that the Inland Revenue Policy Wing would identify the legal amendments to be incorporated in income tax return forms by August 31 of the financial year following the Finance Act to which the return relates.
By September 15, preparation of change request form (CRF) shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL.
Analysis and scrutiny of change request form (CRF) by Chief Income Tax Policy and Chief Business Domain Team shall be conducted by September 16 of the financial year following the Finance Act to which the return relates and the same shall be submitted to member Inland Revenue Policy for approval on the same day.
PRAL shall complete configuration and development of the approved CRF by October 31 of financial year following the Finance Act to which the return relates.
User Acceptance Test (UAT) of the amended return forms on testing environment shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by November 15 of financial year following the Finance Act to which the return relates and the same shall be submitted to Member Inland Revenue Policy for approval on the same day.
The return form shall remain available on the portal for suggestions till January 07 of financial year following the Finance Act to which the return relates.
The final return form shall be notified on or before January 31 of financial year following the Finance Act to which the return relates by observing following timelines:
Inland Revenue Policy Wing and Information Technology Wing shall review the suggestion received from stakeholders by December 12 of financial year following the Finance Act to which the return relates
A new change request form (CRF), if required, shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by January 10 of the financial year following the Finance Act to which the return relates and the same shall be approved by Member Inland Revenue
PRAL shall complete configuration and development of the approved CRF by January 15 of the financial year following the Finance Act to which the return relates
User Acceptance Test (UAT) of the final return forms on testing environment shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by January 18 of the financial year following the Finance Act to which the return relates and the same shall be submitted to Member Inland Revenue Policy for approval.
Finance income tax return forms shall be available on IRIS by January 31 of financial year following the Finance Act to which the return relates
In case, any further amendment are introduced in Finance Act that have an impact on the finally notified income tax return forms referred to at clause (e), such amendments shall be incorporated by July 07 of the financial year next following; and
Notwithstanding anything contained in this rule, the time so specified may, if requested by the Member Inland Revenue Policy, be extended by the FBR to such extent and subject to such conditions and limitations as it may deem proper.
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FBR adopts policy to strengthen legal team for tax cases
ISLAMABAD: Federal Board of Revenue (FBR) has adopted new policy for placement of legal advisors and advocates on its panel to improve the representation before the courts.
The FBR said that previously policy for appointment of advocates was regulated under guidelines issued on October 16, 2017.
“However, to improve the representation before the courts in the light of directors of Supreme Court given in CMA No. 991/2015, the existing policy has been reviewed and the new policy guidelines are proposed for placing advocates on FBR panel and appointment as legal advisors on retainership,” the FBR added.
According to eligibility criteria for appointment of legal advisors, advocates must have at least seven years practice as advocate High Court in relaxation or service matters shall be considered.
For placement on FBR panel, the applicant must have at least three years practices/experience as advocate of High Court in taxation or services matters, having good reputation and professional competence.
However, where the applicant is a retired officer of FBR and has served in IRS or Pakistan Customs for at least ten years, experience as an advocate High Court for one year may also be considered.
The FBR said that advocate placed on panel of FBR while representing the FBR shall not give any conceding statement before any court unless specifically in this regard. “The advocate shall not enter into appearance in any case against FBR or its field formations,” the FBR added.
The advocate shall be responsible to apply for the certified copy on the date of judgment is announced and provide the same to the department immediately.
Advocate appointed by the FBR or its field formation shall not seek unnecessary adjournment. Further, the appointed advocate shall ensure the departmental case is not left unattended for want of prosecution.
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Karachi Chamber rejects power tariff hike; demands immediate withdrawal
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has strongly rejected the power tariff hike by K-Electric and demanded the government of immediate withdrawal the relevant notification.
In a statement issued on Tuesday, KCCI President Shariq Vohra said that the anti-business move would give a serious blow to the trade & industry which was still struggling really hard to recover from the disaster caused by the lockdown for six months imposed to contain Covid-19 pandemic.
Power Division through a notification allowed K-Electric (KE) to increase rates of electricity ranging from Rs.1.09 to Rs.2.89 per unit with effect from September 1, 2020, stated that this anti-business
While rejecting outright the federal government’s decision to increase KE’s tariff, Shariq Vohra said Karachiites are already suffering badly due to unbridled inflation hence the hike in KE’s electricity bills was unacceptable and must be withdrawn immediately.
“Although the lawmakers are assuring that Prime Minister Imran Khan and his government were striving to control inflation by making earnest efforts but it is really unfortunate that they have given go ahead to KE for raising its tariff which would not only intensify the hardships for business community due to high cost of doing business but would also terribly affect the poor masses who are already overburden due to inflation while KE’s tariff hike would further worsen the situation”, he added.
“Indeed it is a huge disappointment that the Federal Government, instead of providing relief to the already burdened citizens of Karachi during the ongoing difficult times, continues to take anti-business and anti-Karachi actions. It is well known fact that the economic hub of Pakistan is passing through worst possible crisis and suffering badly due to crumbling infrastructure, electricity load shedding, gas and water shortages etc. For God’s sake, please have mercy on poor citizens and the anxious business & industrial community of Karachi which is battling for survival”, he stressed.
Shariq Vohra pointed out that on one hand, the government has been pushing the business & industrial community to enhance their productivity and exports so that more wealth and employment opportunities could be generated in order to improve the ailing economy but how is it going to be possible when on the other hand, they give go ahead to electricity tariff hike which by all means is an anti-business and anti-people move.
The cost of utilities in Pakistan are much higher as compared to regional countries, making our products uncompetitive in the international markets.
“The economy and businesses would only flourish when the cost of doing business is brought down by substantially reducing the electricity, gas and water tariffs while all other exorbitant taxes and duties must also be reduced and the government will have to particularly make all-out efforts to rebuilt Karachi’s dilapidated infrastructure which has been the top most reason behind the poor industrial performance of all the industries situated in seven industrial zones of Karachi.”
“The decision makers will have to understand that if the cost of input rises, it would lead to poor performance and reduced output of the industry, resulting in lower revenue collection, shrinking employment opportunities and making the production uncompetitive in the domestic as well as international markets”, he added.
He mentioned that the Karachi Chamber has been strongly opposing this particular increase in K-Electric Tariff and urged the authorities through media statements issued on July 10, 2020 and September 3, 2020 to refrain from raising KE’s tariff. Although the increase was postponed at that time but it has once again been imposed in an odd situation when the businesses are desperately questing hard for survival.
He hoped that keeping in view all the above mentioned facts, the government would review KE’s electricity hike notification and immediately withdraw the same which would certainly be highly appreciated not only by the business & industrial community but also by people belonging to all walks of life.
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Share market falls by 203 points on FATF, inflation concerns
KARACHI: The share market fell by 203 points on Tuesday owing to rising concerns over FATF upcoming meeting and rising inflation number.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,007 points as against 40,210 points showing a decline of 203 points.
Analysts at Arif Habib Limited said that the market continued the downtrend today following yesterday’s attrition on account of FATF concerns, which was further worsened by an uptick in inflation numbers.
Overall, the index lost 564 points but partly recovered by the end of session to close -203 points.
Selling was observed almost across the board, with the exception of PSO, HBL, UNITY, KEL among stocks which traded positive for better part of the session.
Buying activity in LUCK close to end of session also contributed to the recovery in lost points. HASCOL topped the volumes with 43.8 million shares, followed by TRG (28.5 million) and UNITY (19.1 million).
Sectors contributing to the performance include E&P (-68 points), Banks (-32 points), Fertilizer (-30 points), Power (-25 points) and Cement (-19 points).
Volumes declined from 377.6 million shares to 290.1 million shares (-23 percent DoD). Average traded value also declined by 24 percent to reach US$ 59.9 million as against US$ 78.9 million.
Stocks that contributed significantly to the volumes include HASCOL, TRG, UNITY, KEL and PIBTL, which formed 42 percent of total volumes.
Stocks that contributed positively to the index include HBL (+17 points), TRG (+8 points), LUCK (+8 points), DAWH (+8 points) and KEL (+8 points). Stocks that contributed negatively include HUBC (-32 points), PPL (-27 points), OGDC (-24 points), MCB (-23 points) and ENGRO (-21 points).
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Rupee eases by three paisas on import payment demand
KARACHI: The Pak Rupee ended down by three paisas against dollar on Tuesday owing to import and corporate payment demand for the foreign currency.
The rupee ended Rs163.84 to the dollar from last day’s closing of Rs163.81 in interbank foreign exchange market.
Currency dealers said that the higher dollar demand for import and corporate demand depreciated the value of the local currency.
They said that higher trade deficit for the month of September 2020 and expected current account deficit for the month also pressured the local unit.
They however hoped that the rupee would make gain during coming days owing to measures taken by the government and substantial inflows in the shape of remittances and export receipts.
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TAX YEAR 2021: tax rates for salary income
The Federal Board of Revenue (FBR) has updated the income tax rates for salaried individuals for the tax year 2021. These rates, which have been incorporated into the Income Tax Ordinance, 2001, as amended by the Finance Act, 2020, will remain applicable from July 1, 2020, to June 30, 2021, unless further amendments are made.
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Fixed tax scheme available only for registered builders, developers: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has said that the fixed tax scheme is available to those builders and developers, who opt for the scheme by registering their projects with the FBR.
Under the scheme, the term “builder” means a person who is registered as a builder with the FBR and is engaged in the construction and disposal of residential and commercial buildings.
The term “developer” means a person who is registered as a developer with the FBR and is engaged in the development of land in the form of plots of any kind either for itself or otherwise.
Builders and developers eligible for this fixed tax scheme include individuals, a company or an Association of Persons (AOP), the FBR said.
The fixed tax scheme encompasses a new project as well as an incomplete existing project subject to completion of such projects by 30th September, 2022, the FBR added.
A ‘new project’ means a construction or development project, which commences during the period starting from April 17, 2020 till December 31, 2020 and is completed on or before September 30, 2022.
An ‘existing project’ means an incomplete construction or development project, which has commenced before April 17, 2020, is completed on or before September 30, 2022 and a declaration is provided in the registration form with regard to the percentage of completion of the project up to the last day of the accounting period pertaining to Tax Year 2019.
The tax payable by builders and developers on their income, profits and gains emanating from the sale of buildings or plots shall be determined on a project by project basis on the basis of specified rates per square foot/per square yard for commercial and residential buildings and commercial, residential and industrial plots, the FBR said.
In the case of buildings having dual usage i.e. both commercial and residential the respective rates specified for each category shall apply.
Moreover, in case the development of plots and construction of buildings upon the same constitutes a single project, the respective rates for developers and builders shall both apply, the FBR added.
Fixed tax shall be reduced by 90 percent in the case of low cost housing developed or approved by the Naya Pakistan Housing and Development Authority or under the Ehsaas Programme.
Builders and developers opting for the proposed scheme are not required to withhold income tax on the purchase of building material except steel and cement. Moreover, they are not required to withhold tax on services of plumbing, electrification, shuttering and other similar services other than those provided by companies.