Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • KCCI demands terminal operators to publicize container charges

    KCCI demands terminal operators to publicize container charges

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the terminal operators to make public the container charges.

    Agha Shahab Ahmed Khan, President, KCCI while referring to numerous complaints submitted at the Chamber by the importers, urged the Terminal Operators and Shipping Agents to publicize Full Container Load (FCL) and Less Than Container Load (LCL) charges on their websites in order to facilitate trade and industry.

    It has been observed that terminal operators and shipping agents do not share the breakup of charges even on demand and seek aggregate amount decided whimsically which was highly unfair as the relevant traders are totally unaware of what exactly was being charged under what label.

    “Access to such information is the fundamental right and a fair demand of the importers who are carrying out legitimate businesses and timely paying all their taxes”, he said, adding that the Ministry of Maritime Affairs must look into this issue and order the Terminal Operators and Shipping Agents to share breakup of charges with importers which would certainly be appreciated by the business community.

    Agha Shahab was of the opinion that Pakistan’s sea port charges were one of the highest in the South Asian region which discourage cost efficient shipping lines from taking cargo to and from Pakistan resulting in a demand/supply gap and higher transportation costs for the traders.

    “As per studies conducted earlier, Karachi’s two ports have charges which are estimated to be three times that of Sri Lanka’s, and seven times that of Singapore. Such problems should be addressed at the earliest, if we want to see Pakistan rapidly become a hub of regional trade”, he added.

    He said that the business community faces inconsistency in the charges of shipping companies, thus making costing and forecasting difficult for businessmen.

    Shipping lines are charging exorbitant charges in the name of free competitive rates and loose cargo landing delivery orders.

    “In addition, high port charges are being charged as there is no fixed policy in this regard. This is adversely affecting the business in terms of flow thus creating a negative impact for the business community,” he added.

    He stressed that the charges of KICT, PICT and QICT are too high in comparison with global standards and need to be reduced.

    “There is a need to increase the time of free days of delivery order and detention charges of containers to 21 days and detention slab of not more than $5 per day after 21 days by the shipping companies. The number of demurrage free days should also be increased to around 10 days,” he added.

  • Exemption on electricity bills for commercial, industrial consumers withdrawn

    Exemption on electricity bills for commercial, industrial consumers withdrawn

    ISLAMABAD: Federal Board of Revenue (FBR) has withdrawn the exemption of advance income tax on electricity bills to industrial and commercial consumers.

    The exemption has been withdrawn through Tax Laws (Second Amendment) Ordinance, 2019.

    The FBR said that in terms of clause (66) of Part-IV of the Income Tax Ordinance, 2001 exemption from collection of advance tax under section 235 of the Ordinance on the electricity bills of commercial and industrial consumers was available to the five export oriented sectors who fulfill the twin conditions of falling under the zero rated regime of sales tax and being registered in sales tax as exporters or manufacturers.

    The zero rating regime for the five export–oriented sectors has now been abolished, therefore, consequent amendment in clause (66) of Part-IV of the Second Schedule has been made to remove the legal anomaly.

  • Telecom services to pay 19.5 percent as per SRB working tariff

    Telecom services to pay 19.5 percent as per SRB working tariff

    KARACHI: Sindh Revenue Board (SRB) issued working tariff updated up to December 31, 2019 under which the sales tax on services will be 19.5 percent on telecommunication services. (more…)

  • Pakistan’s foreign exchange reserves increase to $18.081 billion

    Pakistan’s foreign exchange reserves increase to $18.081 billion

    KARACHI: The liquid foreign exchange reserves of the country increased by $486 million to $18.081 by week ended December 27, 2019 as compared with $17.595 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by the central bank increased by $582 million to $11.489 billion by week ended December 27, 2019 as compared with $10.907 billion a week ago.

    The SBP attributed the increase to bilateral and multilateral inflows including proceeds of US$ 452.4 million received from IMF under EFF program.

    The foreign exchange reserves held by commercial banks however declined by $95 million to $6.592 billion by week ended December 27, 2019 as compared with $6.687 billion a week ago.

  • Rupee eases on import, corporate demand

    Rupee eases on import, corporate demand

    KARACHI: The Pak Rupee eased by three paisas on Thursday owing to higher import and corporate payments, dealers said.

    The rupee ended Rs154.88 to the dollar from Tuesday’s closing of Rs154.85 in interbank foreign exchange market.

    The dealers said that last day the market was remained closed due to bank holiday. Therefore, the demand was higher today for import and corporate payments.

    They said that improved economic indicators would help the rupee against the foreign currency in coming days.

    The exchange rate in open market also witnessed slight change in rupee value. The buying and selling of dollar was recorded at Rs154.70/Rs155.10 from Tuesday’s closing of Rs154.70/Rs155.00 in cash ready market.

  • Stock market gains 1,081 points on tax incentives

    Stock market gains 1,081 points on tax incentives

    KARACHI: The stock market gained 1,081 points on Thursday owing to positive outcome of tax amendment ordinance promulgated a day earlier.

    The benchmark KSE-100 of Pakistan Stock Exchange (PSX) closed at 42,481 points as against 41,400 points showing an increase of 1081 points.

    The sentiments of the market was positive on tax incentives granted to foreign investors in domestic debt securities.

    Analysts at Arif Habib Limited said that second trading day of 2020 took the index to an even higher number with an increase of 1144 points and closing the session 1081 points.

    Reasons that contributed to the performance of index were rumour of downward adjustment in NSS rates by a significant margin and buying activity from Banks and Foreign Fund, in addition to the recent release of a host of high index targets from various brokerage houses.

    Buying activity was mainly observed in Banks, E&P and Cement Sectors.

    Power sector led the volumes with 58.8 million shares, followed by Banks (58.1 million) and Cement (36.3 million).

    Among scrips, KEL traded 46.8 million shares, followed by BOP (27.7 million) and FFL (21.4 million).

    Sectors contributing to the performance include Banks (+332 points), E&P (+133 points), Power (+107 points), Cement (+95 points) and Fertilizer (+91 points).

    Volumes increased from 330.7 million shares to 412.4 million shares (+24 percent DoD). Average traded value also increased by 111 percent to reach US$ 110.2 million as against US$ 52.1 million.

    Stocks that contributed significantly to the volumes include KEL, BOP, FFL, UNITY and PAEL, which formed 33 percent of total volumes.

    Stocks that contributed positively include HUBC (+101 points), HBL (+85 points), ENGRO (+83 points), UBL (+73 points) and PPL (+67 points). Stocks that contributed negatively include KTML (-2 points), SHEL (-1 points), GSKCH (-1 points), POL (-1 points), and FHAM (-1 points).

  • Commissioner empowered to cancel business license

    Commissioner empowered to cancel business license

    ISLAMABAD: The commissioner of Inland Revenue has been empowered to cancel business license of person on violation of tax laws.

    An amendment has been made to Section 181D of Income Tax Ordinance, 2001 through Tax Laws (Second Amendment) Ordinance, 2019 to empower commissioner to impose fine and penalty and cancel business license.

    Federal Board of Revenue (FBR) in salient features to tax amendment ordinance said that in order to document business activity section 181D of the Ordinance was inserted through the Finance Act, 2019 whereby it was made mandatory for every person engaged in any business, profession or vocation to obtain and display a business license as prescribed by the board.

    In order to complement efforts towards implementation of this scheme the Commissioner is being empowered to impose a fine of Rs.20,000/- in the case of a taxpayer deriving income chargeable to tax under the Ordinance and Rs.5,000/- in all other cases.

    Moreover, the Commissioner shall also be empowered to cancel a business license after providing an opportunity of being heard if a person fails to notify any change in particulars within 30 days of such change or if a person is convicted of any offence under any Federal Tax Law.

  • Tax amendments to generate great interest in govt securities: SBP

    Tax amendments to generate great interest in govt securities: SBP

    KARACHI: State Bank of Pakistan (SBP) on Thursday said that the tax amendment for foreign investors to generate great interest in government securities.

    In a statement the central bank said that the tax amendments will help to deepen the capital market, generate greater interest in the longer-dated government securities, diversify the investor base, and reduce the cost of debt for the government.

    Amendments in the Income Tax Ordinance, 2001 have been issued to simplify the tax regime for non-resident companies investing in debt instruments and Government securities.

    The SBP said that these amendments aim to deepen our capital markets, support availability of long term rupee financing sources, support competition in the local currency debt market, and diversify the source of funding for the government.

    The existing foreign exchange framework allows non-residents to invest in debt instruments and Government securities through Special Convertible Rupee Account (SCRA) maintained with banks in Pakistan.

    However, the tax structure for non-residents investing in debt securities was historically complex. Different rates applicable for the withholding tax on profit on debt and capital gains tax, penal transaction charges for non-filers, a complex tax-filing process and uncertainty about tax applicability were the key impediments to foreign investment into the local debt market, particularly in the long-term debt instruments.

    In this context, the recent amendment in the tax laws has simplified Pakistan’s tax regime for investment in the local debt market.

    Specifically, the above Ordinance has implemented the following changes in Income Tax Ordinance, 2001 to simplify the tax regime for non-resident companies, having no permanent establishment in Pakistan, investing through SCRA in debt instruments and government securities (including Treasury Bills and Pakistan Investment Bonds):

    The capital gains tax shall be subject to withholding at the rate of ten percent and shall constitute final discharge of the tax liability;

    No deduction of 0.6% banking transaction tax under section 236P on transactions in SCRA;

    No advance tax payment under section 147 on capital gains;
    Dispensation from the requirement of registration under section 181, filing of return under section 114 and filing of statement of final taxation under section 115 in respect of income solely from capital gains or profit on debt from investment in debt securities;

    No distinction shall be made in terms of filer or non-filer;

    Many non-resident investors currently benefit from tax treaties and already enjoy reduced rates of taxation around 10 percent. The key provision in the ordinance is to simplify the tax structure and process for international investors.


  • Minimum rate reduced to 0.5%

    Minimum rate reduced to 0.5%

    ISLAMABAD: The government has reduced the minimum tax rate to 0.5 percent from 1.5 percent for traders having turnover up to Rs100 million.

    Federal Board of Revenue (FBR) issued salient features to explain changes made to Income Tax Ordinance, 2001 through Tax Laws (Second Amendment) Ordinance, 2001.

    The FBR said that the standard rate of minimum tax under section 113 of the Income Tax Ordinance, 2001 is being reduced from 1.5 percent to 0.5 percent in the case of traders having turnover up to Rs.100 million for the Tax Year 2020.

    However, traders having turnover up to Rs.100 million who have filed their returns for the Tax Year 2018 will be obliged to pay tax equal to or more than the tax paid for the Tax Year 2018 for the Tax Years 2019 and 2020.

    Moreover, a trader has been defined as an individual engaged in the buying and selling of goods in the same state including a retailer and a wholesaler, however, distributors have been ousted from the scope of this definition.

    Under section 153 of the Ordinance, individuals having turnover of Rs.50 million or above in any of the preceding Tax Years are obliged to act as withholding tax agents whilst making payments for supply of goods, rendering of services or for execution of contracts.

    Henceforth traders, being individuals and having turnover up to Rs.100 million shall not be required to act as a withholding agent under section 153 of the Ordinance.

  • Tax Amendment Ordinance: advance income tax on mobile phone import reduced

    Tax Amendment Ordinance: advance income tax on mobile phone import reduced

    ISLAMABAD: In a significant move aimed at promoting digital accessibility and e-commerce in Pakistan, the government has reduced the advance tax on the import of mobile phones.

    (more…)