KARACHI: The State Bank of Pakistan (SBP) announced on Tuesday that it has decided to maintain the policy rate at 13.25%. SBP Governor Dr. Raza Baqir conveyed this decision, which was made during the Monetary Policy Committee (MPC) meeting. The SBP emphasized that the outlook for inflation remains steady, prompting the committee to retain the current monetary policy stance.
(more…)Author: Mrs. Anjum Shahnawaz
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FBR advised to allow sales tax refunds on local supplies
KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday advised Federal Board of Revenue (FBR) to allow sales tax refund to manufacturers making local supplies.
The tax bar in a letter to FBR suggested in order to promote diversification of exports instead of relying solely on 5 export oriented sectors, you are requested to kindly issue necessary clarification/make necessary amendment to the effect that exporter-cum-manufacturers include all manufactures engaged in local as well export sales.
The tax bar said that apart from five export oriented sectors, conditional facility for expeditious processing of sales tax refunds through FASTER system has been given to exporter-cum-manufacturers, however, as per Income Tax Circular no. 10 of 2008 dated August 27, 2008, the term exporter-cum-manufacturers means those manufacturers whose exports during the preceding year are more than 80 percent.
The KTBA pointed out that input tax on fixed assets is adjusted against the minimum sales tax liability under section 8B of the Act only incase where other normal input tax [on goods / services] is less than 90 percent of the Output Tax, however, in case any unadjusted / unutilized input tax relating to fixed assets is carried forward to subsequent months than the same is treated at par with normal input tax and not being treated as input tax on fixed assets.
Therefore it suggested that in order to allow fair treatment of input tax on fixed assets and in order to promote capital intensive investment, kindly direct concerned person to make necessary amendments in online sales tax return portal to treat input tax on fixed assets as part of the input tax on fixed assets even if the same is carried forward to subsequent months.
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SRB suspends sales tax registration of M/s. Ability Logistics International
KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Ability Logistics International for failure to pay taxes and non-compliance of filing monthly returns.
The SRB said that scrutiny of tax profile of the taxpayers showed that, it had failed to electronically file true and correct Sindh Sales Tax Return for the period October 2012 to December 2019.
The provincial revenue authority said that the sales tax registration of the company had been suspended with immediate effect.
The sales tax registration shall be revoked if the taxpayer takes remedial action by January 30, 2020. The remedial action should include to discharge sales tax liability along with default surcharge for the aforementioned periods and shall also deposit the same with the government of Sindh.
Further, the logistic company is also required to electronically file true and correct monthly sales tax returns for the said tax periods.
The provincial revenue body said that in case of non-satisfactory response or failure to take remedial measures on or before January 30, 2020, the case shall be further proceeding for cancellation of the registration with the SRB.
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FBR issues list of software vendors for integrating big retailers’ sales
ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued list of vendors providing software for integrating sales of big retailers with the tax machinery.
The FBR said that the list of vendors who have provided Point of Sales (POS) softwares to those retailers who have integrated their POSs with FBR.
The list is in alphabetical order and the retailers may approach and engage any of them that they find suitable after due diligence.
Following is the list of vendors:
ABUZAR CONSULTANCY, Karachi, 021-32005755
AWA SOFTWARE, Karachi, (021) 34973694
COMPUTER INFORMATION SERVICES PVT LTD, Karachi, 021-34521329
CONFIZ LIMITED, Lahore, (042) 35717906, Zainulabidin 0321-4711101, Hamid Rasheed 0333-4741004, Faheem Karachi 0322-4566589
DELTA SOFT, Faisalabad, 041-8721577, 0301 7104466
DEVELOPER ZONE, Mobile, 0306 5619198
DYNEXCEL , Faisalabad, (041) 8500733
EZEE TECH TARIQ JAMIL, Mobile, 0321-4012074
EZI SOLUTION, Mobile, 0321 4598991
G. Tech, Karachi , Muhammad Ahsan Naeem 0323-8023327
GENTEC, Karachi, (021) 34167766
HISAAB.PK, Mobile, 0300 8296954
INTELLECT SOLUTIONS, Karachi, 021-35651576-7
IPOS, Mobile, 0333 5413847
ITRESOURCES, Mobile, 0306 2450000
ITSTECHWORLD.COM, Mobile, 0321-647-2001
LUMENSOFT, Lahore, (042) 111 290 290, Abdul Jabbar 0346-7999797
MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040
MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040
MAISON CONSULTING, Mobile, 0321 8450197
MANTAQ SYSTEMS, Lahore, (042) 32116687
MB COMMUNICATION, Islamabad/RWP, (051) 5700111
MIANTECH, Mobile, 0311 5679955
MILESTONE, Karachi, (021) 35148294
MILLENIUM SOFTWARE, Karachi, 02132582001-4
MTECH, Mobile, 0306 8512354
NETTECH, Islamabad/RWP, 051-8356632
NETTECH TECHNOLOGY, Islamabad/RWP, 051-8356632
NUBIT SOFTWARE (PVT) LTD, Karachi, (021) – 32428197
PAKISTANWEBHOST, Mobile, 0334 5662119
RETAIL PRO INTERNATIONAL, LLC, Mobile, 0345-888-7875
Sidat Haider Murshid Asociates, Lahore, 042-35789725
SOFTWORLD, Mobile, 0321 9436268
SOLUTION XPERT, Mobile, 0333 8112161
SULEMAN SWEETS, Mobile, 0333 8112161
System Plus, Lahore, (042) 37184805
SYSTEMS LIMITED, Lahore, (042) 111 797 836, Imran Khan 0313-5289270
TECHNOSYS, Mobile, 0334 396 8215
TECHNOSYS , Karachi, (021) 34325117
TMR Consulting Pvt Ltd, Islamabad, Munawar 0324-4235028
TRIOBYTE, Mobile, 0333 3490585
UNICON INTERNATIONAL PVT LTD., Karachi, (021) 5071161-65
UNIVERSAL NETWORK SYSTEMS, Karachi, (021) 34327917
WASEELA, Islamabad/RWP, (051) 111 962 962
YEHPOS, Islamabad/RWP, 051-8356632
YY TECH, Karachi, (021) 35346500
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Murtaza Syed appointed as SBP deputy governor
KARACHI: The federal government has officially appointed Dr. Murtaza Syed as Deputy Governor of the State Bank of Pakistan (SBP), in accordance with Section 10(4) of the SBP Act of 1956 (as amended), the central bank announced on Tuesday. Dr. Syed assumed his responsibilities at the SBP on January 27, 2020, bringing with him a wealth of experience in macroeconomic policy and research.
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National Savings screening meant to stop ill-gotten money: Finance Division
ISLAMABAD: The Finance Division on Monday said that the screening of all saving schemes is meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investors from the menace of Money Laundering and Terrorist Financing.
The Ministry of Finance, while clarifying news reports, said that Central Directorate of National Savings (CDNS) is committed to mitigating the deficiency to improve customer service delivery and to comply with the FATF recommendation to safeguard the investors’ interests.
Banks under the supervision of SBP have already put in place all the required systems and KYCs (Know Your Customers) processes to comply with the FATF recommendations.
In order to implement this requirement, Finance Division through promulgation of National Savings Schemes (AML-CFT) Rules, 2019 has decided to engage an AML-CFT compliant bank, through competitive bidding, to put in place the requirements as well as the necessary training of employees of National Savings.
Accordingly, Expression of Interest, in consultation with SBP, has been sought from the interested bank to conduct KYC and other requirement of new as well as existing clients of CDNS.
This will include the biometric verisys and screening of potential clients in UN Proscribed person List.
All these screenings are meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investor from the menace of Money Laundering and Terrorist Financing.
Finance Division therefore reiterates that the steps of the Government are aimed at making the CDNS compliant with the FATF requirement and are not intended to jeopardize the interests of the account holders / customers.
Moreover, third-party arrangement will make the organization i.e CDNS more transparent and viable for the customers and will not in any case affect its financial business.
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FBR warns legal action against non filers
KARACHI: Federal Board of Revenue (FBR) on Monday warned persons having taxable income to file their annual returns for tax year 2019 otherwise tax authorities will initiate legal proceedings.
The FBR issued reminder for persons having taxable income but so far unable to file their annual returns for tax year 2019.
The FBR said that the last date for filing income tax returns is January 31, 2020. It said that filing of income tax return is mandatory for all persons with annual income of Rs400,000 or more.
The tax body warned that in case individual/company fails to file their returns by due date, the FBR will assess the applicable tax without serving any notice.
It highlighted the disadvantages of not filing or late filing the returns as those persons would not be part of Active Taxpayers List (ATL).
The FBR said that non appearance on ATL the withholding tax will be charged at double rates.
Further, the FBR will initiate legal action that may result into imprisonment of one to three years. Besides, fine will be charged on late submission of income tax returns.
The FBR explain the procedure to file income tax returns. It said that an individual should login to IRIS with username and password; click on declaration tab after login; select tax year; select the form for relevant category; click on verification after entering details such as salary slip, bank statement, utility bill, tax statement, expenditure and assets etc.
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Revised gas price proposal to hit fertilizer industry
ISLAMABAD: In response to the recommendation by OGRA dated December 11, 2019 the Ministry of Petroleum has worked out certain revisions in the sector wise gas prices where it has recommended to increase fertilizers feed gas price by 5 percent while fuel gas price to be linked with RLNG prices currently at Rs1,672/MMBTU.
It must be noted that the previously, fuel gas prices for the fertilizer sector were in line with prices of other captive power gas at Rs1,021/MMBTU.
This parity was also substantiated by the OGRA recommendation where it had proposed fuel gas prices for fertilizer industry to increase by 32 percent consistent with increase for general industry and captive power gas consumers.
However, with the recent proposal of the Ministry of Petroleum, the fuel gas prices for the fertilizer industry have increased by a massive 64 percent whereas for other captive power gas consumers, this increase is only 15 percent, industry sources said.
Keeping in view, that the fertilizer industry utilizes fuel gas for its captive power requirements, this disparity in price increase, not only reflects upon irrational decision making but also goes against the fundamental objective of the current Government to curb inflationary pressures on food commodities by reducing agri input costs, they said.
This disparity among the prices of sectors may also warrant legal action by the adversely impacted sectors.
The government should learn from previous experience as in the case with GIDC that any taxes that are not applied uniformly or are seen as discriminatory towards an industry will be challenged in court and affected companies are likely to withhold payment which in turn will hamper the inflows for the government.
The proposal of the Ministry of Petroleum subjects the fertilizer sector with the highest increase in fuel cost amongst all other sectors.
The stark contradiction is baffling as on one hand, the Economic Coordination Committee (ECC) has last week approved reduction in GIDC from Rs405/bag to Rs5/bag with the populist narrative of reducing urea selling prices and on the other hand the Ministry of Petroleum is introducing discriminatory pricing which will needlessly intensify the overall burden on the farming community of Pakistan.
If the intent of the government is to resolve the GDS imbalance it should aim to implement a basket gas pricing mechanism whereby, all gas consumers will be charged a uniform price of gas, the sources said.
Such a mechanism will provide significant relief to the providers of gas who have significant outstanding receivables from the government avoiding a circular debt like crisis of the power sector as well as ensure parity across different sectors and gas consumers, they added.
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Stock brokers express serious reservations on proposed new regime
KARACHI: PSX Stockbrokers Association has issued rebuttal on propaganda of Securities and Exchange Commission (SECP) through media to pass the proposed new brokers regime (NBR).
In a press release issued on Monday, it said that firstly, the so called “Small Brokers” term do not exist.PSX Stockbrokers Association (PSA) being representative of more than 66% of the Brokers Fraternity has serious reservations on the Proposed NBR. Regulators approach to defuse the tension by using Small, Medium and Large Size Brokerage Houses is an effort to divide and rule.
None of the objectives, used to float this NBR, can be achieved by merely increasing the Net-Worth of the Stock Brokers. Clearing and Settlement Risk, as envisaged as Primary Objective, do not exist particularly when:
1. Pre and Post trade margins are taken
2. PSX settles trade on T+2 basis
3. Minimum Rs.16 million per broker is being collected as margin under Base Minimum Capital (BMC) irrespective of any trade
4. Minimum Rs.5 million under Net Capital Balance
5. Minimum Rs.7.5 million under Liquid Capital Balance(LCB)
Apart from the above, a total fund of more than Rs.7 billion is accumulated under Settlement Guarantee Fund and Investor Protection Funds collected by National Clearing Company of Pakistan Ltd (NCCPL) and Pakistan Stock Exchange (PSX) respectively.
Stock Market declined by more than 50% from May 2017, from 53,500 Index to 28,000 Level without any clearing and settlement default. This clearly reflects that Exposure Margins, acquired by Front Line Regulators, have also minimized, if not eroded the existence of Clearing and Settlement Risk.
As far as the Custody Risk is concerned, this Proposed NBR in fact increases the said risk, rather than reducing it. A simple calculation based on the parameters provided under the scheme would reveal that Stock Brokers would now be allowed custody by more than 200% of what is allowed currently.
The foregoing clearly reflects that none of the objective of this NBR will be achieved rather than Custody Risk will be concentrated more in few hands.
Proposed increase in Net-Worth of Rs.65 million in the NBR cannot justify allowance of 200% increases in Custody.
Therefore, it cannot be claimed that it “primarily aims to strengthen the Capital Market and restore Investor’s Confidence”
Commission, while trying to aggravate using AML/CFT/FATF requirements, is unaware of the progress made by the Stock Brokerage Industry and we quote below extract from Pakistan National Risk Assessment (PNRA) Report, published in September 2019, by Ministry of Economic Affairs, wherein, clause 150 states that:Considering that all the transactions coming to the securities markets is through banking channel and the primary focus of investors in these markets is investment in securities of the companies, the securities markets are exposed to a lower TF threat abuse. Further, LEAs and EMU have so far not found any incident of TF having a link with the securities or commodities markets.
Anti Money Laundering Act, 2010, was promulgated on March 27, 2010, and Stock Brokers being Sole Properties were not made part of it. Concept of Corporate Brokerage Houses was implemented after the Demutualization in 2012.
Furthermore, the claims by SECP’s insider that 27 brokers have defaulted during last 10 years resulting in defaulting of Rs5.8 billion, is nothing but aggravating the situation as prior to demutualization Stock Broker’s Membership Card was valued at Rs150 million. Moreover, it would have been much better had the names and amount of defaulted brokerage house were also disclosed so as to give clearer picture. The average amount of Rs200 million defaults as being painted in the media is misleading.
The hidden objective of this NBR can be visualized by Section 2.2.3 of the Concept Note on NBR issued in November 2019, which stipulates that, in order to save the compliant brokerage houses that have incurred substantial compliant cost, this NBR is being introduced and all the brokerage houses are therefore forced to adopt all the compliance requirements irrespective of the nature, size and complexity of business.
This is to ensure that these third generation brokerage houses should be compelled to incur the same amount of expenses as incurred by the brokerage houses with research facilities. Regulators have overlooked the concept of discount brokerage houses, exist worldwide.
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Bahria Town investors fear their life-time savings at stake
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Monday advised the management of Bahria Town to act sensibly as investors are fearing their life-time savings are at stake.
Acting President Karachi Chamber of Commerce & Industry (KCCI) Arshad Islam and Chairman of Karachi Chamber’s Housing, Construction & Real Estate Subcommittee Asif Sumsum at a meeting while expressing deep concerns over the hardships being faced by the allottees and members of Bahria Town, stated that the management of Bahria Town should have to act sensibly and they must prudently tackle the situation otherwise the project was likely to turn into a yet another serious scam which was neither in the interest of Bahria Town nor in the interest of Real Estate Agents, Investors and the General Public whose are fearing that all their lifetime savings were at stake.
They underscored that any issue pertaining to additional charges or irregularities in the Bahria Town project have to be amicably resolved as it was not just a matter of grave concerns for the real estate agents, investors and overseas Pakistanis but also for thousands of those masses who have invested their hard earned monies and savings in different projects of Bahria Town so that they could ultimately have their own house in a beautiful, safe and secure locality which is obviously the biggest dream of almost all the people.
Nobody can afford to see Bahria Town sinking, as it would give a serious blow not just to Bahria Town but also to all the stakeholders including the perturbed allottees and investors therefore, any irregularities in this essential project must be cautiously rectified and relief has to be provided as per aspirations of the perturbed masses, they added.
Acting President KCCI and Chairman Housing, Construction & Real Estate Subcommittee stressed that the management of Bahria Town must devise those policies and strategies that ensure uninterrupted activities at Bahria Town. Not only Bahria Town but all other Developers must strictly refrain from taking those steps that terribly shake the confidence of the public and result in drowning their investments.
The present government, local relevant authorities and the management of Bahria Town will have to seriously handle the situation, they said, adding that the Karachi Chamber, being the premier chamber of the country, is keeping a strong vigil on numerous developments in this particular issue and would certainly raise strong voice and knock every single door for assistance, if any injustice is done to the public.
“KCCI, under its policy of ‘Public Service’ introduced by Chairman BMG Siraj Kassam Teli intervenes in every single matter that directly or indirectly affects the business & industrial community or the citizens of this city”, Acting President KCCI Arshad Islam said, “We are neither against the management of Bahria Town nor favoring anyone but would be happy to see that the issue is amicably resolved which is in the larger interest of this city.”