Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • FBR upgrades data entry operators to BS-14

    FBR upgrades data entry operators to BS-14

    ISLAMABAD: Federal Board of Revenue (FBR) has upgraded the post of Data Entry Operators (DEOs) to BS-14 from BS-12 following the approval of the finance ministry.

    The FBR on Tuesday issued an office order stating that in pursuance of Finance Division letter dated December 17, 2019 wherein to standardize the pay scale of DEOs the Finance Division had given concurrence to the upgradation of the post of Data Entry Operators from BS-12 to BS-14 under the federal government as per NOC contained in Establishment Division letter dated September 23, 2019; the post of DEOs of Inland Revenue Department in the field formations and FBR Headquarters stands upgraded to BS-14.

    The competent authority is pleased to appoint all incumbent DEOs (BS-12) to the upgraded post of DEO (BS-14) with effect from December 17, 2019.

  • FBR to impose penalty for not printing retail price on imported goods

    FBR to impose penalty for not printing retail price on imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that printing of retail price on imported consumer items is mandatory and any violation by importer/manufacturer will attract fine and penalty.

    Through recent Tax Laws (Second Amendment) Ordinance, 2019, penalty has been introduced for importers and manufacturers violating the provision of printing retail price.

    The FBR said that it had received queries from various Customs Clearing Agents and Customs Collectorates regarding application of newly inserted Serial No.26 in Section33 of the Sales Tax Act, 1990, related to penalty.

    In this regard it is clarified that at import stage the mechanism of clearing of goods already defined in STGO 103 of 2019 is to be followed.

    The STGO recognizes that in some situations, the printing of retail price is not possible and allows clearance of goods on payment of Sales Tax in the manner as provided therein subject to furnishing of an undertaking that the retail price shall be duly printed.

    Therefore, the provisions of the STGO be followed by the Customs Authorities.

    However, the aforesaid undertaking shall mention that the importer shall print the retail price within ten days of release/clearance of the consignment and intimate the Commissioner concerned for inspection before further supply.

    However, if inspection is not made within ten days after intimation the importer/manufacturer will be free to supply in the market.

    The newly inserted penal provisions shall be invoked if the manufacturer/importer violates the undertaking or is otherwise non-compliant with requirement of retail price taxation.

  • Measures to ensure transparency in PM relief package

    Measures to ensure transparency in PM relief package

    KARACHI: Utility Stores Corporation (USC) has taken all measures to ensure transparency in provision of subsidized items under the Prime Minister Relief Package, a top official said.

    “Our investigation teams are working across the country to prevent any misuse of the package,” said Zulfiqar Rahat, Zonal Manager, Sindh in a media briefing.

    He said that general public in case identifying any misuse can complaint at the numbers displayed at all the USC outlets across the country.

    The zonal manager said that in the era of social media every person has direct access to the prime minister and the managing director of the USC to make any complaint.

    The zonal manager said that the investigation teams of USC Headquarters Islamabad and zonal teams simultaneously conducting surprise visits at the stores.

    He said that five basic commodities have been provided under the relief package, included: pulses, rice, edible ghee, sugar and wheat flour (Atta).

    On the occasion, Javed Khan, Regional Manager, North said that the corporation had ensured sufficient availability of subsidized items at the stores.

    The regional manager said that the government had granted Rs6 billion for sales of subsidized items through the utility stores.

    He said that a huge demand of those items was expected due to huge gap in prices of subsidized items as compared with the local market.

    Therefore, the region had ensured the sufficient stock at its warehouses as well as at its stores, he added.

    The regional manager also took the media to visit a store which was flooded with subsidized items.

  • SBP imposes penalty on five banks for violation

    SBP imposes penalty on five banks for violation

    KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty on five banks including Summit Bank, Habib Metropolitan Bank, MCB Bank, National Bank of Pakistan and Bank Alfalah for violating regulatory environment.

    The central bank on Tuesday issued significant enforcement measures by imposing monetary penalty on banks for violating rules, regulations and other regulatory environment.

    The SBP imposed Rs219.138 million as penalty on five banks during the month of December 2019 for violating mainly regulations related to foreign trade operations, Customers Due Diligence (CDD) and Know Your Customer (KYC).

    The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
    In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions

    With the latest penal action the total amount of penalty during first six months (July – December) 2019 increased to Rs1,569 million.

    According to the highlights of significant enforcement actions by the SBP during December 2019, the central bank imposed Rs219.138 million as monetary penalties.

    The central bank on December 11, 2019 imposed penalty amount of Rs17.422 million on Summit Bank Limited for procedural violations in the area of foreign exchange operations.

    “Monetary penalty was imposed on deficiencies in the area of foreign trade operations,” the SBP said.

    The central bank on December 11, 2019 imposed an amount of Rs34.578 million on Habib Metropolitan Bank Limited for violating CDD/KYC.

    “In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”

    The SBP on December 12, 2019 imposed penalty of Rs49.499 million on MCB Bank Limited for procedural violations in the area of foreign exchange operation.

    “Monetary penalty was imposed on deficiencies in the area of foreign trade operations.”

    The SBP on December 18, 2019 imposed monetary penalty of Rs21.544 million on National Bank of Pakistan for violating CDD/KYC.

    “In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”

    The SBP on December 23, 2019 imposed monetary penalty of Rs96.095 million on Bank Alfalah Limited for violating KYC/CFT.

    “In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”

  • FPCCI demands uninterrupted gas supply to meet export targets

    FPCCI demands uninterrupted gas supply to meet export targets

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday urged the government to allow gas connections to new industrial units and uninterrupted gas supply to existing units in order to meet export targets.

    Mian Anjum Nisar, President and Sheikh Sultan Rehman, Vice President of the Federation of FPCCI urged the government to provide gas connection to new industrial units as well as uninterrupted supply of gas to existing industries in order to meet export targets.

    They strongly criticized the stoppage of gas to industrial estates of Karachi by Sui Southern Gas Company Ltd, resulting in serious loss of productivity.

    This in turn leads to failure in meeting export orders on time and financial losses to exporters as they have to ship by air to meet the deadlines.

    They expressed their displeasure that industrialists of Karachi had to resort to sit-ins on this issue.

    They underscored the need to provide basic amenities like water, power and gas so that industrialists can focus their attention on increasing productivity and meeting export targets rather than protesting on the streets.

    They urged the government to wholeheartedly support the industry which is facing a very hostile environment and fighting for survival.

    “Failure to supply uninterrupted gas will lead to further closure of industry resulting in increased unemployment and serious law and order situation in the near future”, they added.

  • Stock market remains flat despite selling activity

    Stock market remains flat despite selling activity

    KARACHI: The stock market remained flat on Tuesday amid selling activity during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 43,207 points as against 43,219 points showing a decline of 12 points.

    Analysts at Arif Habib Limited said that the market replicated the performance seen yesterday with a sway from +250 points to -123 points and closing the session -12 points.

    Mainly Cyclicals faced the music with major selling pressure was witnessed in Cement Stocks (due to higher coal prices) and Steel sector stocks.

    E&P sector also saw selling pressure, whereby OGDC, PPL and POL traded in red territory.

    EPCL also faced heavy selling after announcement of issuance of Preference Shares.

    Banking sector stocks remained in the limelight even today with trading volumes of 44.7 million shares, followed by Technology (42.4 million) and Cement (26.6 million).

    Among scrips, BOP managed to realize trading volumes of 18 million shares, followed by TRG (16.5 million) and TPL (14.6 million).

    Sectors contributing to the performance include Fertilizer (+48 points), Banks (+21 points), E&P (-53 points), Chemical (-21 points) and Cement (-20 points).

    Volumes declined further from 366.2 million shares to 249.7 million shares (-32 percent DoD). Average traded value also declined by 28 percent to reach US$ 50.4 million as against US$ 69.7 million.

    Stocks that contributed significantly to the volumes include BOP, TRG, TPL, BYCO and KEL, which formed 31 percent of total volumes.

    Stocks that contributed positively include ENGRO (+45 points), UBL (+34 points), HUBC (+23 points), DAWH (+20 points) and EFERT (+7 points). Stocks that contributed negatively include PPL (-27 points), OGDC (-23 points), SNGP (-16 points), COLG (-13 points), and MCB (-10 points).

  • Rupee ends unchanged amid high dollar demand

    Rupee ends unchanged amid high dollar demand

    KARACHI: The Pak Rupee ended unchanged against dollar on Tuesday amid high demand for import and corporate payments.

    The rupee ended Rs154.85 to the dollar, the same previous day’s closing, in interbank foreign exchange market.

    Currency dealers said that the market witnessed higher demand for dollar early in the day. However, the inflows of remittances and export receipts helped the rupee to maintain level.

    The foreign currency market was initiated in the range of Rs154.87 and Rs154.92. The market recorded day high of Rs154.87 and low of Rs154.84 and closed at Rs154.85.

    The exchange rate in open market also witnessed no change in rupee value. The buying and selling of the dollar was recorded at Rs154.70/Rs155.00, the same previous day’s closing, in cash ready market.

  • LTU Karachi collects Rs688 billion in first half

    LTU Karachi collects Rs688 billion in first half

    KARACHI: Large Taxpayers Unit (LTU) Karachi has collected Rs688 billion during first six months (July – December) of 2019/2020 as against Rs598 billion in the corresponding period of the last fiscal year, showing 15 percent growth, a statement said on Tuesday.

    So far as December 2019 is concerned, LTU Karachi collected Rs160 billion as compared with Rs144 billion in the same month of the last year.

    The rise in collection has been attributed to various tax facilitation and enforcement projects during the last six months by the LTU Karachi.

    The unit issued Rs17.8 billion as sales tax refunds during the period in order to effectively address liquidity problems of the manufacturing sector.

    In ongoing Broadening of Tax Base (BTB), the LTU Karachi retrieved data of unregistered commercial and industrial gas consumers and shared with the territorial regional tax offices for issuance of notices and registering the non-filers on income tax returns. This effort resulted in substantial increase in return filers.

    The statement said that pursuing proactive policy of Federal Board of Revenue (FBR), various steps had been taken for the purpose of early disposal of litigation cases pending with the courts. On this account, senior officers have been specifically deployed for assistance of the High Court of Sindh for early disposal of cases.

    The LTU Karachi said that strong enforcement as well as on site monitoring of production had been steadily reinforced and the exercise had brought growth in revenue especially in sugar and cement sectors.

    The unit further said that strong internal accountability mechanism had been strengthened at Chief Commissioner Secretariat, whereby activities of officers and staff were being personally monitored by the Chief Commissioner himself.

    All major taxpayers of LTU Karachi were actively engaged and appreciated for their substantial revenue contribution. In order to educate and enlighten the taxpayers regarding new tax measures and procedures, numerous taxpayer education and facilitation seminars were held during this period.

    These endeavors brought significant improvement in taxpayer’s voluntary compliance besides creating congenial atmosphere between taxpayers and tax collectors.

  • Profit on debt above Rs36 million to be treated as normal tax

    Profit on debt above Rs36 million to be treated as normal tax

    KARACHI: The rate of tax on profit on debt above Rs36 million shall be treated as normal tax rate, tax officials said on Tuesday.

    Sources in Federal Board of Revenue (FBR) said that the tax rates were revised through Finance Act, 2019.

    The revised tax rates for profit on debt not exceeding Rs 5 million have be increased from 10 percent to 15 percent, between Rs5 million and Rs25 million tax rates have been increased from 12.5 percent to 17.5 percent and from Rs25 million to Rs36 million tax rates are being increased from 15 percent to 20 percent.

    The rate of advance withholding tax on payment of profit on debt has also been enhanced from 10 percent to 15 percent.

    Furthermore, the separate rates mentioned above would be applicable for profit on debt up to Rs.36 million and for amounts exceeding Rs36 million the profit on debt will be made part of the total income and taxed at normal rates.

    Previously the profit on debt is taxed separately and is not part of the income in normal tax regime.

    The tax rates were 10 percent, 12.5 percent and 15 percent for slabs up to five million rupees, between five million to twenty five million rupees and above twenty five million rupees, respectively.

    The FBR sources said that due to changes the tax collection under this head registered phenomenal growth during first six months of current fiscal year. The sources estimated that the collection from profit on debt had been increased by around 150 percent during July – December of 2019/2020.

    The sources said that persons not appearing on Active Taxpayers List (ATL) are also liable to pay around 30 percent as withholding tax.

    The FBR collects profit on debt under Section 7B and Section 151 of Income Tax Ordinance, 2001.

    The sources said that high interest rates attracted investment towards deposits of banking system. This factor has also contributed the high growth of tax from profit on debt.

  • Determination of fair market value explained

    Determination of fair market value explained

    KARACHI: The fair market value of assets shall be the value of property in open market at the time of purchase, sources in Federal Board of Revenue (FBR) said.

    The FBR sources said that Section 68 of Income Tax Ordinance, 2001 explained the methodology for determining the fair market value.

    Section 68: Fair market value

    Sub-Section (1): For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property 2[or rent], asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.

    Sub-Section (2): The fair market value of any property or rent, asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.

    Sub-Section (3): Where the price “other than the price of immoveable property” referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.

    Sub-Section (4): Notwithstanding anything contained in sub-sections (1) and (3), the Board may, from time to time, by notification in the official Gazette, determine the fair market value of immovable property of the area or areas as may be specified in the notification.

    Sub-Section (5): Where the fair market value of any immovable property of an area or areas has not been determined by the Board in the notification referred to in sub-section (4), the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty.

    (6) In respect of immovable property—

    (i) component A of the formula in sub-section (2) of section 37;

    (ii) consideration received as mentioned in Division X of Part IV of First Schedule;

    (iii) value of immovable property as mentioned in Divisions XVIII of Part IV of the First Schedule; and

    (iv) valuation for the purposes of section 111,shall not be less than the fair market value as determined under sub-section (4) or (5).

    Explanation.—(1)For the removal of doubt, it is clarified that the fair market value as determined under sub-section (4) or(5) shall be for carrying out the purposes of this Ordinance only.

    (2) It is further clarified that for the purposes of clauses (i) to (iv) of this sub-section if the fair market value determined under sub-section (4) or (5) is different than the auction price the applicable price shall be the higher of the two.