Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Law passed for speedy transfer of immovable properties

    Law passed for speedy transfer of immovable properties

    ISLAMABAD: The Senate on Monday approved an important legislation to facilitate the speedy transfer of movable and immovable property of the deceased, to the legal heirs.

    Letters of Administration and Succession Certificates Bill, 2020 is one of the key legislations, in Government’s legal reform agenda, to get the assent of both the National Assembly and the Senate.

    The purpose of this law is to provide for an efficacious and speedy mechanism for issuance of letters of Administration and Succession Certificates.

    One of the problems faced by the legal heirs of the deceased is the transfer of immovable and movable property even in the cases where no ‘factual controversy’ i.e. any objection by legal heirs or dispute regarding the identity of legal heirs exists.

    Law Ministry has devised a mechanism to establish Succession Facilitation Units in collaboration with the National Database and Registration Authority (NADRA) for the issuance of Letters of Administration and Succession Certificates within 15 days of initiation of application by the legal heir/heirs of the deceased.

    The initiative would enable NADRA to use biometric authentication to issue Succession Certificates and Letters of Administration for the first time in Pakistan.

    Before this law, it took 2 to 7 years to get a simple Letter of Administration or Succession Certificate by the courts. Previously all the legal heirs had to be present in the courts in Pakistan, now even if legal heirs are not present in Pakistan, the Letters of Administration and Succession Certificates will be issued.

    This will save a lot of expense and time and will release onerous burden on the courts.

  • FBR gets CNIC details of motor vehicle buyers

    FBR gets CNIC details of motor vehicle buyers

    KARACHI: Motor vehicle manufacturers and dealers have shared details of Computerized National Identity Card (CNIC) of buyers with the Federal Board of Revenue (FBR), sources said on Monday.

    The sources said that the FBR has received the information of buyers who made purchases during first half (July – December) of current fiscal year.

    Besides manufacturers and dealers of motor vehicles, registration authorities, banks and leasing company have also provided details of buyers for the period.

    The FBR gets details of purchasers, included: name and address of purchaser/lessee; NTN/CNIC of purchaser/lessee; registration of number of motor vehicle; motor vehicle make, model, engine capacity; year of manufacture; date of first registration of the vehicles in Pakistan; registered capacity/laden weight of the vehicle; and ex-factor price of motor vehicle.

    The withholding agents as defined above are liable to collect withholding tax under Section 231B of the Income Tax Ordinance, 2001.

    As per Section 231 of the Ordinance, every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of registration of a motor vehicle.

    Further, every leasing company or a scheduled bank or non-banking financial institution or an investment bank or a modaraba or a development finance institution, whether sharia compliant or under conventional mode, also require to collect withholding tax at the time of leasing of motor vehicle.

    The FBR sources said that huge undeclared money was used for purchase of motor vehicles. Therefore, the FBR will identify persons on the basis of information received, who are not in the tax net.

    As per Section 114 of the Income Tax Ordinance, 2001 every person own 1000CC and above motor vehicles are required to file annual income tax return.

  • SBP takes steps to reduce cheque clearance time

    SBP takes steps to reduce cheque clearance time

    KARACHI: Addressing another gap in cheque clearing whereby it took weeks to clear cheques in far flung areas of the country, SBP has allowed the use of Pakistan Real Time Interbank Settlement Mechanism (PRISM) for the settlement of cheques, said a statement on Monday.

    This is expected to decrease the processing time for clearing of payment instruments in areas that are not easily accessible. This will also help the financial institutions in far flung areas to leverage digital channels for their clearing and settlement obligations, the SBP added.

    To further improve the digital payment services landscape in the country and promote financial inclusion, SBP has issued instructions to the banking industry for improving the acceptance of payment cards in the country.

    Specifically, SBP has taken three steps: one, the banks are now bound to offer the domestic payment scheme card, PayPak, to the customers as a first priority, whereas cards of international payment schemes like Visa, MasterCard and Union Pay may be issued on the request of the customer.

    Two, the merchant discount rate (MDR) i.e. the fee charged by banks to the merchants, will now be in the range of 1.5 to 2.5 percent. Earlier banks were allowed to charge any fee to the merchants.

    Three, the distribution of revenues generated from a merchant among the players including card issuer, card machine deploying entity and the payment scheme company, has also been rationalised to keep the incentives equitable among all the players.

    These measures are expected to increase payment card acceptance access points in the country and in turn will also help in digitizing the economy and promoting financial inclusion.

    It may be recalled that SBP launched the National Payment Systems Strategy in November 2019 and has since taken a number of steps to promote digitization of payment transactions in the country.

  • Stock market plunges by 1222 points due to high inflation

    Stock market plunges by 1222 points due to high inflation

    KARACHI: The stock market plunged by 1222 points or three percent on Monday owing to higher than expected inflation numbers.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,409 points as against 41,631 points showing a decline of 1222 points.

    Analysts at Arif Habib Limited said that the market saw a significant drawdown of around 1400 points during the session and closed negative 1222 points.

    Over the weekend, worse than anticipated Inflation caused concern amongst investors, which were otherwise anticipating a rate cut just last week, before the announcement of monetary policy.

    However, the prospects of a rate cut got dampened by the latest release of inflation statistics.

    Declining international crude prices added to the woes of investors and significant dip in oil stocks was also observed. Banking sector stocks realized trading volumes of 40.7 million shares, followed by Cement (27.4 million) and Technology (26.4 million).

    Among scrips, BOP led the trading volumes with 23.5 million shares followed by HASCOL (12.7 million) and MLCF (11.9 million).

    Sectors contributing to the performance include Banks (-320 points), E&P (-271 points), Fertilizer (-137 points), Cement (-98 points) and O&GMCs (-71 points).

    Volumes increased from 193.9 million shares to 203.1 million shares (+5 percent DoD). Average traded value also increased by 15 percent to reach US$ 59.1 million as against US$ 51.2 million.

    Stocks that contributed significantly to the volumes include BOP, HASCOL, MLCF, UNITY and WTL, which formed 31 percent of total volumes.

    Stocks that contributed positively include SYS (+12 points), DCR (+1 points), and ATLH (+0 points). Stocks that contributed negatively include PPL (-111 points), HBL (-97 points), ENGRO (-91 points), OGDC (-82 points), and MCB (-74 points).

  • Finance ministry hopes ease in inflation in coming days

    Finance ministry hopes ease in inflation in coming days

    ISLAMABAD: Ministry of Finance has said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal/provincial levels, and favorable weather will bring better results in easing out inflation and sustaining the economy towards growth and productivity in the coming days.

    Adverse effects of pre-monsoon rains on the wheat crop, disruption of the supply chain of essential items due to harsh winters and thick fog, delay in harvest and arrival of the crop in the market, and lower production of vegetables, including tomato in Sindh, led to higher food inflation but the change of weather and better supply of potatoes, tomatoes and onions should result in smooth supply and decrease price pressure, says the Finance Division in an official statement on Monday.

    The Finance Division noted that another factor contributing to higher inflation was the global price impact due to international commodity prices like Palm oil increased by 43.9 percent, Soybean oil by 12.8 percent, Crude oil by 16.6 percent, etc December 2019 over December 2018 also pushed up the domestic prices. A downward trajectory in crude oil in the market will result in a downward pattern in domestic prices in the coming months.

    While the factors above are likely to ease the inflation, the government has also taken several relief measures to protect the vulnerable from the price-hike. These measures include the provision of subsidy to Utility Stores Corporation on 05 essential items for which Rs. 7 billion has been transferred to Ministry of Industries and Production; Rs. 226.5 billion allocated in the budget, Rs. 141 billion already released so far, for low-end consumers using less than 300 units of electricity in a month; PM’s Ehsaas program with doubled social safety net allocation of Rs.190bn from 100bn; out of Rs. 24 billion allocated for a gas subsidy, Rs. 12 billion have so far been released; and Rs. 1000 per family given to 5.1 million families as a special transfer in August 2019.

    Similarly, Rs. 5,000 quarterly tranche was paid to 4.3 million poor families in December 2019; Under Kifalat monthly stipends of Rs. 2,000 per month to 4.5 million families for consumption smoothing starting from 1st February 2020; 1 million new beneficiaries to be added to Kifalat in the next five months with a monthly transfer of Rs. 2,000; undergraduate scholarships to cover the cost of tuition fees and other expenses at the university for 50,000 needy students; Rs. 750 for boys and Rs. 1,000 for girls quarterly stipends to primary school-going children three million children covered; record allocation Rs.152 bn for merged FATA districts; and reduced GST on LPG to 10 percent from 17 percent.

    The Ministry of Finance said the government had also devised a strategy to control and ease out the impact of inflation through a host of policy measures which included ECC permission for import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement; Zero borrowing by Govt from SBP in Current FY.

    Government retired Rs. 837.2 billion (1st July-17th January 2020) compared to the borrowing of Rs. 3770.5 billion same periods last year; Reduction in fiscal deficit, primary surplus H1FY 20; monetary tightening and demand compression by austerity; complete restriction on supplementary grants; prices monitoring Cell in Ministry of National Food Security & Research to check price hikes of essential food items; network of Sasta Bazaars and Utility Store outlets is being expanded for provision of essential items; cheaper Roti provided with a subsidy of Rs.1.5 bn for public tandoors; provincial governments monitoring the display of price list and quality of items in the open market and Sasta Bazaars; and 10) effective measures being taken by the CCP to control Cartelization and undue Profiteering

  • Rupee eases by two paisas against dollar

    Rupee eases by two paisas against dollar

    Karachi – The Pakistani Rupee experienced a marginal decline of two paisas against the US Dollar on Monday, settling at Rs154.51 in the interbank foreign exchange market.

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  • Chartered accountants liable to penal action for issuing false tax certificate

    Chartered accountants liable to penal action for issuing false tax certificate

    KARACHI: Any auditor of professional accountancy firm is liable to penal action in case found guilty of misconduct in furnishing false tax certificate, sources in Federal Board of Revenue (FBR) said.

    Referring to Section 8B of Sales Tax Act, 1990, the sources said that tax authorities allowed input tax adjustment to a taxpayer on the basis of certificate issued by auditors of professional accountancy firms.

    “Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961,” according to Sales Tax Act, 1990.

    Section 20D of Chartered Accountants Ordinance, 1961 explains:

    “20-D. Orders by the Council if member found guilty.-(1) If, on receipt of the report under Section 20-B the Council is of opinion that the member of the Institute has been guilty of any professional misconduct specified in Schedule I, it may, after affording such member an opportunity of being heard, either personally or through counsel or another member of the Institute, make any of the following orders, namely:-

    (a) Reprimand or warn such member;

    (b) Impose such penalty as it may deem necessary not exceeding one thousand rupees; and

    (c) Remove the name of such member from the Register for a period not exceeding five years:

    Provided that, where it appears to the Council that the case is one in which the name of such member ought to be removed from the Register for a period exceeding five years or permanently, he shall not make any order but shall refer the case to the High Court with its recommendations thereon.

    (2) If the Council is of opinion that the member of the Institute is guilty of a professional misconduct specified in Schedule II, it shall refer the case to the High Court with its recommendations thereon.

    According to Section 8B of Sales Tax Act, 1990 taxpayers have not been allowed to adjust input tax except for some cases.

    Following is Section 8B of the Act:

    “8B. Adjustable input tax.– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

    Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:

    Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).

    (2) A registered person, subject to sub-section (1), may be allowed adjustment or refund of input tax not allowed under sub-section (1) subject to the following conditions, namely:–

    (i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

    (ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

    (3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

    (4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.

    (5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).

    (6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 15 percent.”

  • FBR gets information of property transactions

    FBR gets information of property transactions

    KARACHI: Federal Board of Revenue (FBR) has received information of buyers and sellers of immovable properties during the period July – December 2019, sources said.

    The sources in tax offices told PkRevenue.com that bulk of information was provided by provincial property registrar offices and housing societies along with complete details of buyers and purchasers.

    The sources said that the information would be used for detecting concealment of tax money and quantum of black money used in transactions.

    The sources said that there was huge gap between values of property declared at the time of registration or transfer with fair market values.

    They said that the property registrar offices and housing societies on behalf of the FBR collect withholding tax and deposit the same into the national kitty. Besides, working as withholding agents they also require to provide information of buyers and sellers under Section 165 of Income Tax Ordinance, 2001.

    The withholding agents under Section 165 are require to obtain information of persons making transactions such as: name, Computerized National Identity Card Number (CNIC), National Tax Number (NTN), and address of each person from whom tax was collected or to whom payments were made from which tax was deducted.

    As per law the withholding agents are required to provide details of all transactions and persons involved to the FBR by January 31, 2020 for the period July – December 2019.

    The sources said that the withholding agents require to collect withholding tax from seller under Section 236C and from buyers under Section 236K of the Ordinance.

    They said that in scrutiny process on the basis of information the tax offices would ask banks to provide payments details of buyers and sellers to identify the actual amount paid for transactions.

    The sources said that the tax authorities had been empowered to take action where fair market value was not declared in purchase of immovable properties.

    The real estate business is believed to parking lot for black money in Pakistan. Over the last few years the FBR made significant progress to encourage clean transactions in buying and selling of immovable properties.

  • Income tax return filing increases by 42%

    Income tax return filing increases by 42%

    ISLAMABAD: The filing of income tax returns has registered over 42 percent growth for tax year 2019 as compared with tax year 2018.

    Federal Board of Revenue (FBR) on Saturday said that the number of annual returns filed for tax year 2019 2.342 million by January 31, 2020 as compared with 1.645 million returns for tax year 2018 filed till January 31, 2019.

    The FBR attributed the increase in the return filing to improved confidence of people on the tax authorities.

    However, the FBR extended the last date for filing income tax return for tax year 2019 up to February 28, 2020.

    The FBR said that the tax collection for January 2020 was Rs320 billion which was 17 percent higher than in the revenue collected in the same month of the last year, showing 17 percent growth. Similarly, the total collection also registered 17 percent growth.

    The FBR said that the tax revenue on domestic sources posted 30 percent increase, which was never seen in the past.

    The FBR also issued refunds amounting to Rs120 billion in the current fiscal year as compared with Rs65 billion in the last fiscal year.

  • Coronavirus outbreak: declaration made mandatory on international arrival

    Coronavirus outbreak: declaration made mandatory on international arrival

    ISLAMABAD: The government has made mandatory for all passengers entering Pakistan to submit health declaration. The decision has been taken in the wake of coronavirus outbreak, as statement said on Saturday.

    All passengers entering Pakistan As per the instruction from Ministry of Health, all passengers entering Pakistan will be required to submit a Health Declaration form which will include contact details and brief travel history.

    The submission of those completed form will be necessary for entering Pakistan.

    Health Declaration Card will be distributed amongst all the passengers in plane.

    In accordance with the instructions of the Government of Pakistan and in view of Novel Coronavirus outbreak, all passengers are advised to fill up the form and handover to Health Staff in the International Arrival Lounge.

    Non-Compliance shall result in denial of entry to the country.

    The form contains demographic information of passenger, travel history and health status like issue of fever, cough and shortness of breath. This form is made for easiness of public.