Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Equity market ends down by 2.4% on political situation

    Equity market ends down by 2.4% on political situation

    KARACHI: The equity market fell by 1,027 points or 2.4 percent on Monday due to geo-political and regional security concerns.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 41,296 points as against 42,323 points showing a decline of 1027 points.

    Analysts at Arif Habib Limited said geo-political and regional security concerns took toll on market sentiment and investors resorted to selling.

    Although crude price jumped significantly, with Arab Light trading near $73/bbl, Oil & Gas chain didn’t take any positive impact.

    Power sector led the volumes with 52.6 million shares, followed by Banks (291 million) and Cement (22.8 million). Among scrips, KEL topped the chart with 46 million shares, followed by UNITY (17.6 million) and BOP (16.9 million).

    Sectors contributing to the performance include Banks (-186 points), Fertilizer (-155 points), Cement (-111 points), E&P (-92 points) and Power (-85 points).

    Volumes declined further from 322.9 million shares to 266.6 million shares (-17 percent DoD). Average traded value also declined by 29 percent to reach US$ 67.5 million as against US$ 94.8 million.

    Stocks that contributed significantly to the volumes include KEL, UNITY, BOP, TRG and FFL, which formed 38 percent of total volumes.

    Stocks that contributed positively include JLICL (+4 points), DCR (+1 points), SCBPL (+0 points), COLG (+0 points). Stocks that contributed negatively include ENGRO (-97 points), HUBC (-65 points), LUCK (-53 points), PPL (-48 points), and FFC (-36 points).

  • Rupee falls by five paisas on import demand

    Rupee falls by five paisas on import demand

    KARACHI: The Pak Rupee ended down by five paisas against dollar on Monday owing to higher demand for import and corporate payments, dealers said.

    The rupee ended Rs154.95 to the dollar from last Friday’s closing of Rs154.90 in interbank foreign exchange market.

    Currency dealers said that the market witnessed higher demand for dollar owing to first trading day of the week.

    The dealers however said that the exchange rate might witness an adverse effect due to rising tension in Middle East after killing of Iranian leader in the US attack.

    The foreign currency market was initiated in the range of Rs154.93 and Rs154.98. The market recorded day high of Rs154.98 and low of Rs154.93 and closed at Rs154.95.

    The exchange rate in open market witnessed depreciation in rupee value. The buying and selling of dollar was recorded at Rs155.00/Rs155.30 as compared with last Friday’s closing of Rs154.80/Rs155.10 in cash ready market.

  • Achieving 4% GDP growth target unlikely: SBP

    Achieving 4% GDP growth target unlikely: SBP

    The State Bank of Pakistan (SBP) issued a cautionary statement on Monday, stating that achieving the targeted 4 percent GDP growth for the current fiscal year is unlikely.

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  • Procedure for conducting audit of transfer pricing cases unveiled

    Procedure for conducting audit of transfer pricing cases unveiled

    KARACHI: The Director General of International Tax Operations has been empowered to select and conduct transfer pricing audit of cases under section 230E of Income Tax Ordinance 2001.

    Federal Board of Revenue (FBR) in explanation to Tax Laws (Second Amendment) Ordinance, 2019 said that previously, there was no provision which specified the procedure to be adopted for conducting transfer pricing audit of taxpayers.

    It has now been specified that transfer pricing audit of cases selected by the Director General of International Tax Operations shall be conducted as per procedure laid down in 177 of the Ordinance.

    Moreover, the right to conduct transfer pricing audit under section 230E of the Ordinance shall not prejudice the right of the Commissioner to determine transfer price at arms length in transactions between associates while conducting audit under section 177 or 214C of the Ordinance or whilst making amendment under section 122 of the Ordinance.

    Tax experts at PwC A F Ferguson Chartered Accountants said that Section 230E was introduced in the Income Tax Ordinance, 2001 through the Finance Act, 2017 for establishing a separate Directorate for conducting transfer pricing audit of taxpayers.

    Through the Finance Supplementary (Second Amendment) Act, 2019, Section 230E was substituted so as to establish Directorate General of International Tax.

    However, no specific procedure or mechanism for transfer pricing audit was prescribed in the said section which was causing ambiguity amongst the field officers and taxpayers.

    Through the Second Amendment Ordinance, necessary amendment has been made in Section 230E to prescribe that transfer pricing audit is to be conducted as per the procedure laid down in section 177 and other provisions of the Ordinance.

    This way, the ambiguity relating to the transfer pricing audit procedure has now been removed, the experts said.

  • Rupee falls nine paisas in early day trading

    Rupee falls nine paisas in early day trading

    The Pakistani rupee weakened by nine paisas against the US dollar in early trading on Monday, driven by increased demand for import and corporate payments. The greenback was being traded at Rs154.99 during morning hours in the interbank foreign exchange market, compared to the previous closing rate of Rs154.90.

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  • Traders associations nominate representatives to determine turnover for tax registration

    Traders associations nominate representatives to determine turnover for tax registration

    ISLAMABAD: Traders associations has nominated their representatives for determination of business turnover for mandatory tax registration.

    FBR spokesman said that traders associations had assured of income tax registration of medium and large size retailers.

    The spokesman said that the FBR had agreed to genuine demands of small traders and necessary amendments had been introduced through Tax Laws (Second Amendment) Ordinance, 2019.

    According to the FBR the condition of CNIC (Computerized National Identity Card) had become part of the law and it was genuine demand of traders to reduce the minimum income tax.

    The traders were demanding to reduce the minimum tax because it was high considering their returns and it was the reason the traders were reluctant to declare their details.

    In order to ensure filing declaration by the retailers the minimum tax rate has been rationalized, the spokesman said. Further to provide ease in doing business the traders have been excluded from collecting withholding tax.

    The spokesman said that traders associations had assured to cooperate with the FBR for bringing medium and large size retailers into the tax net.

    In this regard the traders associations had nominated their representatives to determine the turnover of traders for mandatory tax registration.

    The traders associations also assured to cooperate with the FBR to resolve audit related issues. The spokesman said that the FBR wanted to better working relations with the trade community for betterment of the economy.

  • Baggage false declaration to be treated as smuggled goods

    Baggage false declaration to be treated as smuggled goods

    KARACHI: Any misdeclaration or false declaration of baggage carrying by passengers or crew members shall be treated as smuggled goods and penalties will be applicable related to smuggled goods.

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  • Automatic issuance of exemption certificate granted

    Automatic issuance of exemption certificate granted

    KARACHI: The Federal Board of Revenue (FBR) allowed automated issuance of exemption certificate in case commissioner delays in approval.

    Tax experts at PwC A F Ferguson Chartered Accountants said Clause (72B) contained in Part IV of the Second Schedule to the ITO 2001 allows a taxpayer to obtain a withholding exemption certificate from the concerned Commissioner Inland Revenue so as to avoid tax collection at import stage.

    Due to procedural issues, hardships were being faced by taxpayer in getting such withholding exemption certificates renewed, which are generally issued for 6-months validity although tax liability for the entire year as prescribed is discharged.

    To facilitate the taxpayers, the relevant clause has now been amended to provide for automatic approval of application filed on FBR’s IRIS portal for renewal of the certificate in case no action is taken by the Commissioner by the expiry of prescribed time period.

    The concerned Commissioner has, however, been empowered to cancel or modify any such certificate automatically issued on IRIS but any such cancellation or modification may be made after granting the taxpayer an opportunity of being heard and for reasons to be recorded by the Commissioner in writing.

  • SRB notifies sales tax exemption on services provided by restaurants, marriage halls

    SRB notifies sales tax exemption on services provided by restaurants, marriage halls

    KARACHI: Sindh Revenue Board (SRB) has notified exemption of 13 percent sales tax on services rendered by restaurants and marriage halls.

    The SRB issued working tariff applicable from January 01, 2020.

    The service provided or rendered by restaurants and marriage halls are subject to 13 percent sales tax.

    The SRB said that services provided or rendered by restaurants shall be exempted from sales tax whose turnover does not exceeds Rs4 million in a financial year:

    Provided that the exemption shall not apply in case of restaurants:-

    (i) which are air-conditioned on any day in a financial year and which are located within the building or premises of air-conditioned shopping malls or shopping plazas;

    The SRB further said that the marriage halls and lawns are also exempt from sales tax at 13 percent, which are located on plots measuring 800 square yards or less.

    Provided that the exemption shall not apply in case of marriage halls and lawns:

    (i). which are air-conditioned on any day in a financial year;

    (ii).located within the building, premises or precincts of a hotel, motel, guest house, restaurant or club whose services are liable to tax;

    (iii). as are owned, managed or operated by caterers whose services are liable to tax;’

    (iv). which are franchisers or franchisees; and

    (v). marriage halls and lawns having branches or more than one hall or lawn in Sindh.

    (ii) located within the building, premises or precincts of any hotel, motel, guest house or club whose services are liable to sales tax;

    (iii) providing or rendering services in the building, premises, precincts, hall or lawn of any hotel, motel, guest house, marriage hall or lawn or club whose services are liable to sales tax;

    (iv) which are franchisers or franchisees;

    (v) having branches or more than one outlet in Sindh; and

    (vi) whose total utility bills (gas, electricity and telephone) exceed Rs. 40,000/- in any month during a financial year.

  • Traders given tax incentives

    Traders given tax incentives

    KARACHI: Federal Board of Revenue (FBR) has allowed tax concession to traders to bring them into tax net.

    The tax concessions have been granted through Tax Laws (Second Amendment) Ordinance, 2019.

    Tax experts at PwC A F Ferguson Chartered Accountants said that pursuant to the agreement between representatives of federal government and trade bodies on October 30, 2019; certain concessions have been allowed to traders through the Second Amendment Ordinance.

    The term ‘trader’ has been defined to mean an individual engaged in business of buying and selling of goods in the same state, including a retailer and a wholesaler but excluding a distributor.

    The concessions provided to traders are as under:

    (i)The general rate of minimum tax payable (under section 113 of the Income Tax Ordinance 2001) has been reduced from 1.5 percent to 0.5 percent for tax year 2020 for traders having turnover up to Rs100 million.

    However, for traders who have filed income tax returns for tax year 2018, the tax liability for tax years 2019 and 2020 should not be less than the tax liability for tax year 2018, to become eligible for reduced rate of minimum tax of 0.5 percent.

    (ii)Individual having turnover of Rs. 50 million or more in any of the preceding tax years is liable to deduct tax under section 153 while making payments against supply of goods, services and contracts.

    Through the Second Amendment Ordinance, traders being individuals having turnover up to Rs100 million have been exempted from deducting tax under section 153 while making payment against supply of goods, services and contracts.

    The board is expected to clarify the year with respect to which turnover of Rs100 million will be calculated by the trader.