The Pakistani Rupee demonstrated resilience against the US Dollar on Tuesday, making a slight gain despite increased demand for imports and corporate payments, according to dealers in the interbank foreign exchange market.
(more…)Author: Mrs. Anjum Shahnawaz
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FBR to issue ATL Tax Year 2019 on March 01
KARACHI: Federal Board of Revenue (FBR) will issued Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020 to enable persons filed income tax returns for the tax year availing reduced rates and other benefits.
ATL is published every financial year on the March 01 and is valid up to the last day of February of the next financial year, the FBR said.
For example, Active Taxpayer List for Tax year 2017 was published on March 01, 2018 and will be valid till February 28, 2019.
Similarly, Active Taxpayer List for Tax year 2018 was published on 1st March 2019 and will be valid till February 29, 2020.
The appearance of ATL has become more important following amendment introduced through Finance Act, 2019 under which 100 percent additional tax has been imposed on certain transactions by persons not appearing on the ATL.
The FBR in an official memorandum said that previously the law provided for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.
This tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.
The measure was meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.
The measure had not achieved the desired results as the previous regime did not provide for any legal framework to ensure filing of return by such non filers.
In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ is being abolished from the statute, wherever occurring.
A separate Schedule has introduced to specifically provide a legal framework for punitive measures for persons not appearing on ATL and to ensure filing of return by such persons.
The main attributes of this scheme are as under:-
— Persons whose names are not appearing on the ATL will be subjected to hundred percent increased rate of tax.
— The withholding agents will clearly specify the names, CNIC or any other identification of such persons in the withholding statement so that legal provisions to enforce return can come into effect.
— Where a withholding agent is of the opinion that hundred percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish an intimation to the Commissioner setting out the basis on which the person is not required to file return. The Commissioner shall accept or reject the contention on the basis of existing law. In case the Commissioner fails to respond within thirty days, permission shall be deemed to be granted to not deduct tax at hundred percent increased rate
— Where the person’s tax has been deducted or collected at hundred percent increased rate and the person fails to file return of income for the year for which tax was deducted, the Commissioner shall make a provisional assessment within sixty days of the due date for filing of return by imputing income so that tax on imputed income is equal to the hundred percent increased tax deducted or collected from such person and the imputed income shall be treated as concealed income.
— The provisional assessment shall be of no effect if the person files return within forty five days of completion of provisional assessment and the provisions of the Ordinance shall apply accordingly. Where return is not filed within forty five days of provisional assessment, it shall be treated as final assessment and the Commissioner shall initiate penalty proceedings for concealment of income.
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SBP to announce monetary policy on January 28
The State Bank of Pakistan (SBP) is set to unveil its monetary policy for the upcoming two months on Tuesday, January 28, 2020, as confirmed by a statement released on Tuesday.
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NCCPL says CGT December payment due on January 29
KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Tuesday announced date for payment of capital gain tax (CGT) for the month of December 2019.
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Sales tax rates issued for retailers integrated with FBR
ISLAMABAD: Federal Board of Revenue (FBR) has issued sales tax rate for different categories of retailers, who integrated their sales with online system of the FBR.
The FBR said that the rate of sales tax for items sold by integrated retailers shall be the same as for all other suppliers as provided under the Sales Tax Act, 1990.
Only exception is for locally manufactured textile and leather items, which if sold by integrated retailers are subject to concessionary rate of 14 percent, and if sold by any other supplier are subject to 17 percent standard sales tax.
Category-wise rates for items sold by integrated retailers is as below:
Items falling in Sixth Schedule to the Sales Tax Act, 1990, the sales tax shall be exempted on sale of milk, rice, wheat flour, pulses, fruits & vegetables (except canned and packaged), uncooked meat, poultry, eggs, stationary items, medicines, laptops and personal computers etc
Items falling in Eighth Schedule to the Act, the reduced rate of sales tax rate shall be as provided in the Schedule. The sale of dairy items other than milk, fat-filled milk (tea-whitener), flours other than that of wheat, if sold in retail packing under a brand name, are subject to sales tax rate of 10 percent; and prepared products of meat or meat offal, if sold in retail packing under a brand name, are subject to sales tax rate of 8 percent;
Precious jewellery at 1.5% of value of gold, plus 0.5% of value of diamond, used therein, plus 3% of making charges
Finished fabric, and locally manufactured finished articles of textile and textile made-ups and leather and artificial leather (See S. No. 66 of Table 1 of Eighth Schedule) shall be subject to 14 percent of sales tax.
This will include locally manufactured garments, shoes, bags, made-ups etc of textile, leather and artificial leather.Mobile phones and satellite phones: Under Ninth Schedule, sales tax is to be paid by the importer and manufacturers only. No sales tax to be charged on subsequent supplies. However, suppliers may pass on the burden of sales tax charged on their purchases in their selling price.
Items not covered above shall be liable to standard sales tax rate at 17 percent on items in Third Schedule except fertilizers, imported textile and leather items, electronic items, watches, sugar, hardware, sanitary ware, kitchenware, toys, furniture, sports goods, surgical instruments, crockery, plastic products, imitation jewellery, etc.
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SECP extends company registration facility to transgenders
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has extended facility of company registration to transgenders community.
The regulator introduced a separate category for members of transgenders community in its online portal for company registration and compliance i.e. eServices.
This initiative is in line with the government efforts to grant fundamental rights to transgender community, under the “the Transgender Persons (Protection of Rights) Act, 2018”.
This Act allows individuals to mention their identity on all official documents including IDs, passport, educational certificates and driving licenses.
Now, in eServices, a person has an option to self-identify under three classifications i.e. male, female and other. With this initiative, the transgender community is able to register a company or become shareholder or director in a company with personal identity of their choice.
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Banks asked to ensure compliance in collection of donations for Dam Fund
KARACHI: State Bank of Pakistan (SBP) on Monday said any laxity by banks in collection of donations for Dam Funds will tantamount to contempt of court.
“The apex court of the country [Supreme Court of Pakistan] is monitoring progress in the matter of donations to the Fund. Any laxity by banks or their staff at branches will attract penal action and may also tantamount to contempt of court,” the SBP said.
The banks are therefore, advised to ensure meticulous compliance of above instructions and extend full cooperation to donors in deposit of their donations/contributions, the SBP added.
The central bank said that in a recent hearing of the subject case, the Honorable Supreme Court of Pakistan has observed that there are complaints that banks are not accepting donations from people contributing to the Dam Fund, and are also not actively facilitating donors in remittance of the funds stuck abroad.
In order to address the issues being faced by donors, banks are advised to ensure that the arrangements made for collection of donations and contributions to the Dam Fund shall remain in place at every bank branch on an ongoing basis; requiring all concerned to provide necessary support and facilitation to donors.
The banks are further directed to ask their overseas branches to facilitate the donors in depositing and remittance of donations to the Fund in accordance with the legal and regulatory framework of concerned jurisdiction.
The banks shall display SBP’s helpline number and email address on their websites and branch notice boards for lodging of complaints by donors if they face any difficulty in depositing and contributing to the Fund.
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ECC allows import of 300,000 tons wheat
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday allowed 300,000 tons of wheat to ensure sufficient supply of the commodity and reducing prices in the domestic market.
A meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh on Monday allowed import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement.
Under the decision, the wheat would be imported by the private sector by withdrawing regulatory duty to the extent of the approved quantity.
The ECC further decided that the wheat to be imported under the ECC decision would be allowed in the country until March 31, 2020 to ensure that the local wheat to be available from the start of April was picked up at the right price from the market.
The ECC also issued instruction for the immediate release of stocks held by the PASSCO and the provincial departments.
Besides the import of wheat, the ECC approved a proposal by the Ministry of Industries and Production to reduce the GIDC on gas consumed by the fertilizer manufacturers from Rs 405 to Rs 5 per bag so that this benefit could be passed on to the farmers.
ECC also allowed the raising of Rs 200 billion on the request of Ministry of Energy (Power Division) from the Islamic Banks as fresh facility through Power Holding Limited by way of issuance of Pakistan Energy Sukuk-II against assets of the DISCOs/GENCOs as collateral through open competitive bidding to procure financing in a fair and transparent manner.
The amount will be utilized for the purpose of the funding the repayment liabilities of the DISCOs.
ECC approved the proposed mechanism by the Ministry of Finance for the grant of Sovereign guarantees. All requests for government guarantees are to be accompanied by request for guarantee by the governing body of PSE’s.
Further
• Every request must be reviewed and endorsed by the concerned Administrative Ministry/Department of the relevant entity.
• Audited Financial statements of previous year prior to issuance of guarantee is mandatory for evaluation of guarantee request
• Business plan including an explanation of the business model and financial projections for at least 5 years;
• A note explaining the following;
1. Whether its need for guarantee is short term or long term.
2. Business model followed by the entity since inception or over the last 5 years, whichever is less
3. Financial as well as non-financial performance of the entity since its inception or over the last five years, whichever is less
4. Request, along with justification, for the type and amount of guarantee needed by the entity and the timelines over which it is required The Finance Division shall evaluate the request internally and finalize its recommendations with the approval of the Finance Secretary.
ECC also approved the report on proposed exemption of 5% sales tax on cotton seed cake.
It was briefed to the ECC that in case the exemption of sales tax on Cotton Seed Cake cannot be introduced during CFY 2019-2020, the same can be considered for inclusion in the Finance Bill of 2020-2021.
The approval of Technical Supplementary Grant of Rs. 96.652 million of National Book Foundation in favor of Ministry of Federal Education and Professional Training was also granted by ECC.
Technical Supplementary Grant amounting to Rs 15 million for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for implementation of E-Governance program was also approved.
ECC granted approval to the request of the Ministry of Interior for the Technical Supplementary Grant amounting to Rs458 million for payment of subsistence allowance to Personnel of Civil Armed Forces deployed in UN Peacekeeping Missions.
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FBR clarifies delay in track, trace system implementation
ISLAMABAD: Federal Board of Revenue (FBR) has said that implementation of track and trace system has been stayed by a court. As soon the stay is vacated by the court the process will be implemented, said a statement issued on Monday.
The FBR issued the clarification in response to news reports published on January 20, 2020 about delay in the implementation of FBR’s Track & Trace System to control illicit tobacco trade.
FBR has clarified that a license has been issued to M/s NRTC on October 14, 2019 through a transparent and fair process of bidding which is strictly in accordance with the PPRA Rules, 2004 and Licensing Rules, 2019.
However, the award of license to lowest bidder i.e. M/s NRTC was challenged by some unsuccessful bidders i.e. M/s SICPA Ink in Sindh High Court and M/s Reliance IT Solutions (Pvt) Ltd and M/s NIFT Consortium in Islamabad High Court.
Since, the Honorable Court has granted status quo and the matter is sub-judice before the aforesaid courts, therefore, there is no delay on the part of FBR.
The process of implementation of Track and Trace System will be resumed as and when the stay order is vacated by the Honorable Court.
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FPCCI fears no advantage for Pakistan under Phase-II FTA with China
KARACHI: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) feared that Pakistan would not be able to take advantage of opportunities under Phase II of China Pakistan Free Trade Agreement (CPFTA-II).
Mian Anjum Nisar, President FPCCI and Sheikh Sultan Rehman, Vice President FPCCI said in a statement on Monday expressed fear that Pakistan may not be able to reap benefits under Phase II of China Pakistan Free Trade Agreement (CPFTA-II) despite elimination of duties on 313 tariff lines covering most of Pakistan’s exports.
He pointed out that during Phase I of China Pakistan FTA, the balance of trade remained greatly in favor of China which managed to export 57 percent of its product lines while Pakistan could take advantage of only 5 percent of its product lines.
Pakistan exported US $ 2.1 billion approx. while imports from China have reach more than US $ 17 billion approx. that created trade gap of US $ 15 billion approx. in favor of China.
While products included in this volume of Pakistan’s exports to China are cotton (US $ 872.85 million), Cereals (US $ 161.3 million), Copper (US $150.26), Beverages, spirits and vinegar (US $133 million), Fish, crustaceans, molluscs, aquatics invertebrates (US $ 91.21 million), Ores slag and ash (US $ 66 million), Machinery, boilers (US $45.9 million), Salt, sulphur, earth, stone, plaster, lime and cement ( US $ 43.36 million), Raw hides and skins (other than furskins) and leather ( US $ 35 million, Articles of apparel, knit or crocheted (US 30 million).
FPCCI Office Bearers expressed serious concern about Pakistan’s ability to benefit from Phase II, when Pakistan does not have surplus products to exportdue to a shrinking economy.
He further highlighted the fact that industrial output is declining because of de-industrialization in the last few years. Serious issues like, high interest rates, frequent increases in power and gas tariff, unavailability of gas to industries, abrupt changes in government policies, rampant smuggling, refunds to exporters and an overall hostile environment are making it difficult for industries to sustain their existence.
FPCCI Office Bearers urged Government of Pakistan to urgently develop a robust and holistic industrial policy that would lead to massive industrialization in the country, encourage R&D, innovation, diversification and development of new products, improve quality standards and enhance technical skills of labor.
He also urged Chinese companies to enter into joint ventures with Pakistani manufacturers and relocate their industries to Special Economic Zones. These efforts will significantly raise industrial output enabling Pakistan to take advantage from Phase II of China Pakistan FTA.
Otherwise, Pakistan will not be able to receive benefits from supposedly vast opportunities available to us and the fate of Second Phase of China Pakistan FTA will not be any different that the First Phase.