Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Restoration of multiple years audit to burden taxpayers

    Restoration of multiple years audit to burden taxpayers

    KARACHI: Business community has criticized the government for eliminating condition of conducting audit once in three-year period.

    Overseas Investors Chamber of Commerce and Industry (OICCI) highlighted anomalies in the Finance Bill 2020, sent to the Federal Board of Revenue (FBR) and said that omission of the condition would burden the taxpayers and would give sweeping powers to tax officials.

    The Finance Act 2018 restricted the frequency of conducting audits to once in a three-year period.

    This amendment of 2018 demonstrated the confidence of the Government on the records maintained by registered persons.

    The Bill now seeks to omit the condition of conducting the audit once in a three-year period. If passed, this will unnecessarily burden taxpayers, while handing over sweeping powers to the assessing officers of Inland Revenue to conduct audits covering one or multiple tax years with no reprieve for the taxpayer available under the law, in absence of any prescribed limitation.

    The consequence of this change will likely erode the taxpayer’s confidence in the revenue machinery and the probable unnecessary wastage of time and effort by the revenue authorities.

    The OICCI said that during the FBR/OICCI Web link meeting on May 5th the FBR Member (IR-Operations) informed that new Audit Policy will be announced soon, where there will be only one audit in three years u/s 122, which was welcomed by OICCI members.

    Therefore the removal of condition of one audit in three years in the Finance Bill 2020, is a shock for OICCI members.

    “Hence, we strongly advocate maximum of one for audit within three years, for promoting Ease of Doing Business,” the OICCI said.

  • Foreign investors express concerns on proposed rates for imported raw materials

    Foreign investors express concerns on proposed rates for imported raw materials

    KARACHI: Foreign investors have raised concerns over the proposed tax rates on import of raw materials.

    Overseas Chamber of Commerce and Industry (OICCI), which is represented of foreign investors and multinational companies in Pakistan, highlighted anomalies in the Finance Bill 2020 and proposed rectifications.

    The OICCI said that the reduction in rate of income tax u/s 148 to 2 percent on import of raw materials/items mentioned in Part II of the Twelfth Schedule is a significant relief that will improve the cash flow position of companies.

    However, two concerns have been voiced on the changes proposed:

    a) The Bill seeks to introduce a new Schedule as the Twelfth Schedule to the Ordinance wherein all the goods imported into Pakistan may be classified under either of the three categories viz Part I, Part II and Part III based on PCT code wise listing of goods.

    However, certain core raw materials used by manufacturers are still falling under the category of 5.5 percent income tax by virtue of non-inclusion in Part II of Twelfth Schedule.

    It is suggested that a general rate of 2 percent may be prescribed for all imports by manufacturing companies for own consumption.

    b) The Bill now seeks to omit Clause 72B, therefore, exemption would no longer be available in respect of tax collected under Section 148 of the Ordinance to an industrial undertaking.

    Though there is substantial reduction in rate of collection of tax, as a result of withdrawal of such exemption, nevertheless, the taxpayer operating on margins lower than the rate of advance tax collected on imports or having adjustable losses/tax credits or enjoying tax exemption may still face liquidity hitches.

    In order to avoid cash flow issues and tax refundable situation, it is suggested that instead of omitting clause 72 B, industrial undertakings importing raw materials for in house consumption should be provided an option.

  • SRB suspends sales tax registration of Turnotech for defaulting tax payment

    SRB suspends sales tax registration of Turnotech for defaulting tax payment

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Turnotech (Pvt) Limited defaulting tax payment and non-compliance of filing monthly returns.

    In a notice the SRB said that M/s. Turnotech (Pvt) Limited had failed to comply with the following obligations:

    — To discharge the Sindh sales tax liability against the services provided or rendered during the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2018.

    — e-file their Sindh sales tax return for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017.

    The SRB said that the suspension of the company would be revoked on taking following measures:

    — to discharge the due Sindh Sales Tax liability along with default surcharge for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017.

    — to e-file the true and correct monthly Sindh sales tax returns for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017, accordingly.

    The SRB said that the compliance date for remedial actions had been fixed on June 23, 2020. In case of non-satisfactory response or failure to take remedial measures the case would be proceeded for cancellation from the provincial tax authority.

  • Inland Revenue offices to observe extended working hours on June 29 – 30

    Inland Revenue offices to observe extended working hours on June 29 – 30

    ISLAMABAD: The offices of Inland Revenue have been directed to observe extended working hours on last two days of current fiscal year in order to facilitate taxpayers in payment of duty and taxes.

    In an office order issued on Monday, the Federal Board of Revenue (FBR) said that all Large Taxpayers Units (LTUs), Corporate Regional Tax Offices (CRTOs) and RTOs would remain open and observe extended working hours till 9:00 PM on Monday June 29, 2020 and till 11:00PM on Tuesday June 30, 2020 to facilitate taxpayers in payment of duty and taxes.

    The FBR directed chief commissioners to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on June 30, 2020 as per SBP’s letter dated June 18, 2020.

  • FBR exempts duty, taxes on import of Remdesivir

    FBR exempts duty, taxes on import of Remdesivir

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday exempt duty and taxes on import of antiviral drugs for prevention of coronavirus.

    The FBR issued SRO 557(I)/2020 to exempt income tax on import of finished drug Remdesivir 100mg injection and injectable solution 100 mg vital.

    A new section 12D has been inserted to Section 148 of Income Tax Ordinance, 2001 to provide relief on import of the drug.

    Similarly, another SRO 558(I)/2020 has been issued by the FBR to exempt the import of finished drug Remdesivir 100 mg injection and injectable solution 100mg vial (PCT3004.9099) from whole of the customs duty and additional customs duty.

  • Stock market gains 299 points after intra-day losses

    Stock market gains 299 points after intra-day losses

    KARACHI: The stock market increased by 299 points on Monday after making recovery of intra-day losses.

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  • Senate committee rejects taxpayers profiling, real-time access to information

    Senate committee rejects taxpayers profiling, real-time access to information

    ISLAMABAD: The Standing Committee on Finance, Revenue and Economic Affairs, in a meeting, has rejected new clauses of taxpayers profiling and real-time access to information.

    The committee strongly rejected the amendments to the taxpayers profile, appeal to appellate tribunal, offences and penalties and power to enter and search premises.

    Clauses related to real time access to Information and databases have been disapproved as well, said a statement.

    The standing committee meeting was held last week took up the Finance Bill 2020, containing the Annual Budget statement presented in the House on 12 June, 2020. Review of the Income Tax Ordinance, 2001 and Federal, Excise Provisions of Finance Bill, 2020 was completed.

    Amendments recommended by the Committee in the Public Finance Management Act 2019 were carried out and shared with the Committee.

    Chaired by Senator Farooq Hamid Naek, the meeting was attended by Senator Mohsin Aziz, Senator Zeeshan Khanzada, Senator Musadik Masood Malik, Senator Mian Muhammad Ateeq Sheikh, Senator Senator Talha Mehmood, Senator Ayesha Raza Farooq, and senior officers from the Ministry for Finance, Revenue and Economic Affairs, Ministry of Commerce and Federal Board Revenue.

    The Committee deliberated over Restriction on deduction of profit on debt payable to associated enterprises. Agreements for the avoidance of double taxation and prevention of fiscal evasion were discussed as well.

    Special concessions have been awarded to items that are essential during COVID 19 Pandemic.

    The Committee appreciated the measures taken by the FBR to deal with vast consequences of the Pandemic.  Omission of collection of advance tax from dealers, commission agents and arhatis etc., by market committees was welcomed.

    This is an important measure to promote agriculture in the country.

    Advance tax on education related expenses has been omitted as well.

    In an attempt to discourage the use of caffeinated drinks FED has been increased from 13 percent to 25 percent.

    Imported cigarettes, cheroots, cigarillos, cigars of tobacco and tobacco substitutes have been subjected to FED at 100 percent.

  • Rupee gains five paisas against dollar

    Rupee gains five paisas against dollar

    KARACHI: The rupee gained by five paisas against dollar on Monday after some improvement in foreign exchange reserves was seen in the latest data.

    The rupee ended Rs166.59 to the dollar from last Friday’s closing of Rs166.64 in interbank foreign exchange market.

    The foreign exchange reserves of the country have increased by $70 million to $16.775 billion by week ended June 12, 2020.

    The foreign exchange reserves were at $16.705 billion by week ended on June 05, 2020.

    The foreign exchange reserves held by the central bank increased by $11 million to $10.107 billion by week ended June 12, 2020 as compared with $10.096 billion a week ago.

    Currency experts said that the local currency was under pressure during the last week owing to repayment of external debt.

  • CGT on shares disposal to be collected on June 29

    CGT on shares disposal to be collected on June 29

    KARACHI: National Clearing Company Pakistan Limited (NCCPL) on Monday said that Gain Tax (CGT) for the month of May 2020 will be collected on June 29, 2020.

    In a statement the NCCPL said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period May 01, 2020 to May 31, 2020, would be collected on Monday June 29, 2020 through respective settling banks of the clearing members.

    All Clearing Members are hereby requested to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the said period have already been made available in the CGT System.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period May 01, 2020 to May 31, 2020, would also be collected from the Pakistan Mercantile Exchange on Monday June 29, 2020.

    Necessary details and reports for the said period have already been made available.

    Moreover, the aggregate amount of CGT arising on redemption of units of open end mutual funds have also been finalized for the period May 01, 2020 to May 31, 2020. Necessary details and reports have already been made available in the CGT System.

    The NCCPL asked the clearing members and Pakistan Mercantile Exchange to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.

    It further said that in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.

  • Tax slabs for salaried person for tax year 2020/2021

    Tax slabs for salaried person for tax year 2020/2021

    KARACHI: Following are the tax slabs for salaried persons to be applicable during tax year 2021 (2020/2021).

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