The Karachi Chamber of Commerce and Industry (KCCI) has expressed strong discontent over the recent decision by Federal Board of Revenue (FBR) to monitor production activities through cameras directly connected to the main tax database.
(more…)Author: Mrs. Anjum Shahnawaz
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Dollar weakens to Rs163.97
KARACHI: The US dollar on Wednesday weakened against the Pak Rupee to Rs163.97 as sufficient supply was seen in the currency market.
The rupee gained six paisas to close at Rs163.97 to the dollar from previous day’s closing of Rs164.03 in interbank foreign exchange market.
Currency experts said that the market witnessed sufficient supply of the foreign currency to meet demand for import and corporate payments.
They said that the sentiments were remained positive in the market due to escalating economic activities.
The experts said that the exports registered 18.24 percent growth to $1.873 billion during September 2020 as compared with $1.58 billion in August 2020.
They hoped that present positivity in the market would help the local unit to make gain further against the greenback.
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SBP directs banks to close all government accounts under TSA
KARACHI: State Bank of Pakistan (SBP) has started implementing Treasury Single Account (TSA) and directed all banks to close all accounts related to government authorities.
In a communication issued on Wednesday, the SBP said that the Finance Division, Government of Pakistan (GoP) vide their letter F.No.1(1)/S.O(TSA)/2020 dated August 19, 2020 has directed all Federal Government Ministries, Divisions, Attached Departments and Subordinate Offices (MDAS) to close their banks accounts with the commercial banks/financial institutions and transfer the balance funds to the Federal Government’s Central Account No.I (non-food) with SBP.
The banks have been directed that their branches would receive the ”Account Closure Request” from the respective authorized signatories on the specified format issued by Finance Division (annexure B of aforesaid letter) for closure of such bank accounts and transfer of balances therein to SBP.
In this regard, following instructions are issued to banks for meticulous compliance:
a. In line with the instructions of authorized signatories, the banks shall close all such accounts and transfer their balances to SBP for onward credit to the Federal Government’s Central Account No.I (non-food).
b. In order to ensure closure of all the accounts and transfer of their balances to SBP through a standardized procedure, banks are hereby advised to develop their internal applications and processes to keep track of the i). Receipt of directives by the authorized signatories; ii). Closure of accounts by banks’ branches and transfer of available balances to their centralized treasury and iii). Transfer of the consolidated amount by the centralized treasury to the SBP through RTGS.
c. Upon receipt of account closure request, the respective branches will initiate the closure of accounts and transfer the available balances to their centralized treasuries within seven (07) days through their internal application referred in (b) above.
d. The respective branches shall convey the following details to their centralized treasuries, through standardized internal application referred in (b) above.
1. Names of Administrative/controlling ministries
2. Names of Government Departments/Institutions
3. Account Titles
4. IBANs
5. Balances Transferred
6. Branch Code
e. The centralized treasury of each bank shall transfer the aggregate amount of deposits surrendered by its branches on daily basis to SBP through RTGS Message Type (MT-202) for onward credit to the Federal Government’s Central Account No.I (non-food). The MT-102 shall invariably mention reference phrase “Government Deposit Transferred to Central Account-I (non-food)”.
f. The banks’ centralized treasuries shall forward the details of such closed accounts to SBP Banking Services Corporation (BSC) Karachi Office as per Annexure I.
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SBP issues carrot, stick policy for banks on housing loan targets
KARACHI: The State Bank of Pakistan (SBP) has adopted a policy of carrot and stick for banks related to mandatory targets for housing/construction financing.
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Teachers, researchers avail Rs2.42 billion income tax exemption
ISLAMABAD: Teachers and researchers have availed tax exemption to the tune of Rs2.42 billion on their income during Tax Year 2020, official sources said on Tuesday.
Under Clause 1(2) of Part 3 of the Second Schedule of Income Tax Ordinance, 2001, full time teachers or researchers are entitled for reduction in tax liability since 2006 and there is no sunset clause attached to this concession.
The FBR said that the tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25 percent of tax payable on his income from salary.
Data of teachers is taken from Pakistan Bureau of Statistics (PBS) website, for the following categories of teachers: Arts/Science colleges, professional colleges, universities, secondary vocational institutions. Teachers in secondary schools have not been considered, being relatively less paid.
Latest available data is for year 2017. For 2018, an 8 percent multiplier on number of teachers is used keeping in view increase in number of teachers over past years.
Average annual salaries for different categories of teachers have been taken as following:
– Arts/Science College: Rs. 900,000
– Professional College: Rs. 1,200,000
– University: Rs. 2,400,000
– Secondary vocational institutions: Rs. 1,800,000
Separate data for researchers is not available, the FBR said.
The FBR said that approximate 133,255 teachers and researchers had availed the tax concession.
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FBR estimates Rs69.5 billion annual tax loss on agriculture income
ISLAMABAD: Federal Board of Revenue (FBR) has estimated an amount of Rs69.5 billion annual loss of tax on agriculture income, sources said on Tuesday.
In a report the FBR said that agricultural income is exempt from income tax under section 41 of the Income Tax Ordinance, 2001.
However, it falls under the provincial domain as per the Constitution of Pakistan, and the provinces have the mandate to levy tax on agricultural incomes.
The provincial collection of income tax on agricultural income for FY 2018 is as under:
Punjab: Rs 913 million
Sindh: Rs559 million
KP: Rs100 million
Balochistan: Rs17 million
Total: Rs1.589 billionThe FBR carried out an estimate on the basis of agriculture census 2010 in order to measure the actual potential of revenue from agriculture.
The key assumption in this estimation is that the average income per acre earned by farmer has been taken at Rs. 50,000, keeping in view current year’s average price levels of commodities.
Farm sizes have been categorized as per column 2 of the table below. Farms smaller than 7.5 acres have not been consid¬ered, being of subsistence income level.
Income for each farm size (column 5) is estimated by multiplying cultivated area (acres) for each category with average income per acre (Rs50,000). If statutory slab-wise tax rates are applied on average income per farm for the six categories of farm sizes, the estimated revenue forgone due to this exemption comes to Rs69.5 billion annually.
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Stock market gains 55 points amid selling pressure
KARACHI: The stock market posted a gain of 55 points on Tuesday, recovering from a significant fall earlier in the day. The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 39,127 points, up from 39,072 points, marking an increase of 55 points.
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Rupee strengthens by 29 paisas against dollar
KARACHI: The Pak Rupee strengthened by 29 paisas against dollar on Tuesday owing to improved inflows of export receipts and workers’ remittances.
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FBR grants Rs27 billion income tax exemption to power generation companies
The Federal Board of Revenue (FBR) has granted income tax exemptions totaling Rs27 billion during the tax year 2020 to power generation companies operating in Pakistan. These exemptions were extended to 73 companies, underlining the government’s efforts to support the energy sector.
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Withholding tax from cash withdrawal plunges by 52 percent; remains in top 10 revenue spinners
ISLAMABAD, September 15, 2024 – The Federal Board of Revenue (FBR) has reported a sharp decline in the collection of withholding tax (WHT) by 52% during the tax year 2020, following the abolishment of the tax for income tax return filers.
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