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Author: Mrs. Anjum Shahnawaz

  • Car import registers 148 percent growth amid coronavirus pandemic

    Car import registers 148 percent growth amid coronavirus pandemic

    KARACHI: Import of motor vehicles in completely built-up unit (CBU) condition registered phenomenal growth of 148 percent in April 2020 despite restrictions to foreign trade owing to lockdown for preventing coronavirus pandemic.

    According to data released by Pakistan Bureau of Statistics (PBS) the import of motor vehicles in CBU condition increased to $10.77 million in April 2020 as compared with $4.34 million in the same month of last year.

    Sources said that due to coronavirus pandemic many overseas Pakistanis opted to return homeland and they brought household along with them.

    It is interesting to note than due to the pandemic most of the imported goods registered massive decline in the month of April 2020 due to restrictions imposed on the foreign trade.

    Whereas, the lockdown imposed in the country not a single locally manufactured car was sold during April 2020.

    The commercial import of motor car is not allowed in Pakistan. However, overseas Pakistanis are allowed to bring motor car under three different ways including personal baggage, transfer of residence and gift schemes.

    The import of CBU motor vehicles registered 64.58 percent decline to $75.57 million during first ten months (July – April) 2019/2020 as compared with $23.37 million in the corresponding period of the last fiscal year.

    The overall decline in import of motor vehicles can be attributed to measures taken by the government to discourage misuse of the facility which is only allowed to overseas Pakistanis.

    Last fiscal year the government brought changes to these schemes and customs clearance of imported cars under these schemes only through payment made out of foreign exchange, which should be verified by banking system.

    Recently, the ministry of commerce through a SRO issued on December 30, 2019 amended in payment system for clearance of imported cars under which local resource could be utilized in case of shortage of payment due to enhancement of exchange rate fluctuation or enhancement in duty rate etc.

    The import of motor vehicles in completely knocked down (CKD) condition registered 40 percent decline to $405.6 million during first ten months of current fiscal year as compared with $678.76 million in the corresponding period of the last fiscal year.

    Industry sources said that the decline in motor vehicles in CKD condition was due imposition of duty and taxes in the last budget, which resulted in hike in prices of locally manufactured cars.

    Besides, slowdown in economy in pre-Covid and later imposition of lockdown to prevent coronavirus spread also discourage the sales of locally manufactured motor cars.

  • Huge lot of Afghan transit vehicles to be auctioned on May 15

    Huge lot of Afghan transit vehicles to be auctioned on May 15

    KARACHI: A large number of motor vehicles of Afghan Transit Trade has been offered for auction at Port Muhammad Bin Qasim International Terminal Operator (QICT), Karachi.

    The auction is scheduled for May 15, 2020.

    Following vehicles will be presented for auction:

    S. No.Lot No.DescriptionNo pkgs/Units
    1QAT=01July2011Suzuki Jeep and Motorcycle06 units
    2QAT=08June2011Toyota Corolla car06 units
    3QAT=05June2011Toyota Corolla Car06 units
    4QAT=03June2011Toyota Corolla Car06 units
    5QAT=11May2011Toyota Corolla Car06 units
    6QAT=10May2011Toyota Corolla Car06 units
    7QAT=06May2011Toyota Corolla Car06 units
    8QAT=05May2011Toyota Corolla Car05 units
    9QAT=04May2011Toyota Corolla Car05 units
    10QAT=01Jan2011Suzuki STRIMB/Toyota Corolla Car06 units
    11QAT=02Nov2010Toyota Corolla Car05 units
    12QAT=01Nov2010Suzuki Balino05 units
    13QAT=02Sep2010Used Toyota Corolla05 units
    14QAT=02Sep2009Toyota Corolla Car05 units
    15QAT=02Feb2011Toyota Corolla Car06 units
    16QAT=01Mar2011Toyota Corolla Car06 units
    17QAT=02Mar2011Toyota Corolla Car06 units
    18QAT=01Apr2011Toyota Corolla Car06 units
    19QAT=05Mar2011Toyota Corolla Car06 units
    20QAT=04Mar2011Toyota Corolla Car06 units
    21QAT=03Mar2011Toyota Corolla Car05 units
    22QAT=03Apr2011Toyota Corolla Car05 units
    23QAT=02May2011Toyota Corolla Car06 units
    24QAT=10Jun2011Toyota Corolla Car06 units
    25QAT=25July2011Toyota Corolla Car06 units
    26QAT=24July2011Toyota Corolla Car06 units
    27QAT=12Jun2011Toyota Corolla Car06 units
    28QAT=11Jun2011Toyota Corolla Car06 units
    29QAT=07Jun2011Toyota Corolla Car06 units
    30QAT=06Jun2011Toyota Corolla Car06 units
    31QAT=01Aug2010Truck Cabin With Accessories04 units
    32QAT=01Sep2010Toyota Corolla Car04 units
    33QAT=01May2011Toyota Corolla Car06 units
    34QAT=26July2011Crane01 unit
    35QAT=02Jun2011Toyota Corolla Car06 units
    36QAT=03May2011Toyota Corolla Car06 units
    37QAT=01Dec2010Divo Matiz Car04 units
    38QAT=01Oct2010Old Used TV 
    39QAT=03Feb2011CT Scanner Machine 
    40QAT=01Dec2011Glass Wool (Loos) 
    41QAT=02Oct2013Oil Base Paint 
    42QAT=01June2011Old Used Road Roller06 units
    43QAT=08May2011Vehicles Suzuki Maruti06 units
    44QAT=09May2011Vehicles Toyota Corolla05 units
    45QAT=03Jan2011Vehicles Toyota Corlla04 units
    46QAT=03Aug2012Glass Weare1X40 Cont
    47QAT=05Nov2010Toyota Corolla05 units
    48QAT=09June2011Toyota Corolla06 units
    49QAT=07Mar2011Toyota Corolla06 units
    50QAT=04April2011Toyota Corolla06 units
    51QAT=21July2011Toyota Corolla06 units
    52QAT=23July2011Toyota Corolla06 units
    53QAT=22July2011Toyota Corolla06 units
    54QAT=02Jan2011Toyota Corolla06 units
    55QAT=07May2011Toyota Corolla06 units
    56QAT=17June2017Excavator Model DX-22501 unit
    57QAT=01April2011Toyota Corolla Car 199606 units
    58QAT=25July2011Toyota Corolla Car 199705 units
    59QAT=24July2011Toyota Corolla 199606 units
    60QAT=02April2011Toyota Corolla Car 199705 units
    61QAT=11Aug2011Toyota Corolla Car 199706 units
    62QAT=08June2011Toyota Corolla Car 199606 units
    63QAT=02Sep2011Toyota Corolla Car 199505 units
    64QAT=02Feb2011Toyota Corolla Car 199706 units
    65QAT=03April2011Toyota Corolla Car 199505 units
    66QAT=03Nove2010Suzuki Alto 199508 units
    67QAT=10May2011Toyota Corolla Car 199406 units
    68QAT=10Aug2011Toyota Corolla Car 199906 units
    69QAT=08Aug2011Toyota Corolla Car 199705 units
    70QAT=01Dec2010Daewoo Matiz 199905 units
    71QAT=02Sep2010Toyota Corolla Car 199506 units
    72QAT=01Sep2010Toyota Corolla04 units
  • Reduction in corporate rate for E&P companies recommended

    Reduction in corporate rate for E&P companies recommended

    KARACHI: Federal Board of Revenue (FBR) has been recommended to reduce the income tax rate for exploration and production (E&P) companies especially in wake of massive reduction in international oil prices.

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  • 10th National Finance Commission constituted

    10th National Finance Commission constituted

    ISLAMABAD: The President of Pakistan on Tuesday constituted the 10th National Finance Commission (NFC) consisting members of federal and provincial governments.

    The finance commission has been constituted with effect from April 23, 2020, consisting following members:

    01. Minister for Finance, Government of Pakistan: Chairman

    02. Minister For Finance, Government of the Punjab: Member

    03. Minister for Finance, Government of Sindh: Member

    04. Minister for Finance, Government of Khyber Pakhtunkhwa: Member

    05. Minister for Finance, Government of Balochistan: Member

    06. Advisor to the Prime Minister on Finance and Revenue: Member

    07. Tariq Bajwa, Government of Punjab: Member

    08. Dr. Asad Sayeed, Government of Sindh: Member

    09. Musharraf Rasool Cyan, Government of Khyber Pakhtunkhwa: Member

    10. Javed Jabbar, Government of Balochistan: Member

    11. Finance Secretary, Government of Pakistan: Official Expert

    The president has also authorized Advisor to the Prime Minister on Finance and Revenue to chair the meeting of the NFC in the absence of Federal Finance Minister.

    A circular issued in this regard stated that in terms of Article 160(2) of the Constitution, the terms of reference for the 10th NFC are as under:

    a. Distribution between the Federation and the provinces of the net proceeds of the following taxes:

    i. Taxes on income, including corporation tax, but not including taxes on income consisting of remuneration paid out of the federal consolidation fund;

    ii. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed;

    iii. Export duties on cotton, and such other export duties as may be specified by the president;

    iv. Such duties of excise as may be specified by the president; and

    v. Such other taxes as may be specified by the president.

    b. Making of grants-in-aid by the federal government to the provincial governments;

    c. Exercise by the federal government and the provincial governments of the borrowing powers conferred by the constitution;

    d. Assessment and allocation of resources to meet expenditures related to Azad Government of the States of Jammu and Kashmir, Government of Gilgit-Baltistan and newly merged districts of Khyber Pakhtunkhwa (erstwhile FATA);

    e. Assessment and allocation of resources to meet expenditures made on security and natural disaster/calamities;

    f. Assessment of total public dent and allocation of resources for its repayment;

    g. Rationalization of subsidies given by the federal and provincial governments in their budgets and agreeing on a mechanism to finance them;

    h. Exploring ways to reduce losses of state-owned enterprises and agreeing on mechanism for sharing these losses between the federal government and the provincial governments;

    i. Any other matter relating to finance referred to the commission by the President.

    The finance division shall, as per the Rule of Business, 1973, provide the secretarial support to the commission.

  • FBR urged to reduce regulatory duty on lighting fittings

    FBR urged to reduce regulatory duty on lighting fittings

    KARACHI: Federal Board of Revenue (FBR) has been urged to reduce regulatory duty on lighting fittings in alignment with LED bulbs and LED tubes.

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  • Uniform tax rate suggested on rental income

    Uniform tax rate suggested on rental income

    KARACHI: The tax rate on rental income should be made uniform for individual, Association of Persons (AOPs) and company at 15 percent.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021, recommended to bring uniformity in taxing the rental income.

    The FPCCI said that at present for every person except companies the income from property is chargeable to tax at the rate specified in Division (VIA) of Part I of the First Schedule to the Ordinance, which is considered to be their final tax liability and they are not allowed any expenditure against gross rent, except option provided under sub-section (7) of section 15A of the Ordinance, in case income exceeds Rs.4 Million. Whereas, the companies are required to pay normal tax (current at 29 percent) on such income after adjustment of admissible expenditure out of gross rent.

    The tax rate on rental income has now been gradually increased from 20 percent to 35 percent for individuals and AOPs though the Finance Act, 2019.

    Apart from that the lessor is also required to pay Sindh Sales Tax at the rate of 3 percent to Sindh Revenue Board (SRB), which makes the total tax impact very unfair and exorbitant and lead towards un-documented business.

    The present scheme of taxation on rental income resulted the rents of warehouses had increased exorbitantly and the exporters who warehoused their exportable goods are financially hurt.

    Moreover, it has also distorted the income of the senior citizens, retired persons, pensioners, widows etc., whose livelihood solely depends upon rent of their property, made from their income in good old days.

    The FPCCI made following proposals:

    i) The rental income from property, AOP or individual and company be taxed at a uniform rate of 15% of the Gross Rent as full and final discharge of tax liability.

    ii) Rental income taxable under Normal Tax Regime should be allowed to be adjusted against business loss. The restriction imposed through Finance Act, 2013 needs to be reconsidered.

    Giving the rationales to the proposals, the FPCCI said:

    i) The impact of taxes (direct and indirect) on rental income will be rationalized.

    ii) Investors will be encouraged to declare their genuine rental income.

  • Premium prize bonds get Rs19.21 billion investment; grow by 228 percent

    Premium prize bonds get Rs19.21 billion investment; grow by 228 percent

    KARACHI: The investment in premium prize bonds has surged by 228 percent to Rs19.21 billion by March 2020 as compared with Rs5.86 billion by the same month a year ago.

    (more…)
  • Tariff Policy Board discusses budget proposals

    Tariff Policy Board discusses budget proposals

    ISLAMABAD: The Tariff Policy Board (TPB) on Monday discussed budget proposals submitted by various stakeholders.

    Advisor to the Prime Minister on Commerce Abdul Razak Dawood chaired the meeting.

    The advisor said that the budget proposals, forwarded by different stakeholders, would be given due consideration by the TPB so that economy of the country could be revitalized at this difficult juncture.

    The meeting was attended by the Secretary Ministry of Commerce, Chairperson National Tariff Commission (NTC), Member Customs Federal Board of Revenue (FBR) and other senior officials of the ministries concerned.

    During the meeting, Abdul Razak Dawood emphasized that the maximum benefits would be given to the industry and the lowest strata of society, as per instructions of the Prime Minister Imran Khan, so that maximum job opportunities could be generated in the shortest possible time.

    In the meeting, the tariff related proposals pertaining to different sectors of the economy, for improving the competitiveness of Pakistan’s exports and giving new impetus to the process of industrialization, were discussed at length.

    The recommendations of TPB on tariff structure would be incorporated in the fiscal budget for the year 2020-2021.

    It was decided by the TPB that the meetings of the Sub-Committee of the board would be convened regularly and the recommendations of the Sub-Committee would be placed before the Tariff Policy Board for deliberations and taking informed decisions thereon.

    The next meeting of the Tariff Policy Board will be held by the end of this week.

  • PSX seeks permanent reduction in tax rate for listed companies

    PSX seeks permanent reduction in tax rate for listed companies

    KARACHI: Pakistan Stock Exchange (PSX) has recommended to lower the rate of tax for listed companies in order to encourage listing in the equity market.

    “The tax rate should be permanently lowered for listed companies, by giving tax credit of 20 percent of tax payable for those companies that meet the prescribed requirements including a minimum free float of 25 percent throughout,” the PSX suggested in its proposals for budget 2020/2021.

    The stock exchange said that in order to encourage new listings, the Finance Act, 2011 introduced Section 65C of the Income Tax Ordinance, 2001; whereby tax credit equal to twenty percent (20 percent) for the tax year in which a company opts for enlistment on the Stock Exchange was allowed.

    Currently, the tax credit is given for four years from the date of listing, subject to the condition that for the first two tax years.

    This tax credit is very insignificant and not enough to attract new listings.

    It is generally observed that when companies opt for a listing on a stock exchange, their profits enhance substantially due to effective corporate governance, better disclosures, and availability to additional funds from the market.

    Increased profitability ultimately leads to higher tax revenue for the government as the number of listed companies on PSX grows. Higher listings, coupled with regulations to increase trading activity will result in higher liquidity, and also lead to incremental government revenues from capital gain tax.

    The table below outlines the five-year summary of listing and de-listing on the PSX:

    ParticularsNumber of CompaniesCapital (Rs.)*
    New Listings2462,607 Million
    De-Listings4212,971 Million
    Delisted due to merger9140,535 Million

    *As of December 31, 2019

    Giving rationale to the proposals, the PSX said that It is generally observed that publically-listed companies are able to improve profitability due to effective corporate governance, better corporate disclosure and availability of additional funds.

    The incremental benefits arising from the preferential tax structure for listed companies will foster a business environment that encourages new listings on the stock exchange, resulting in higher trading volumes and lead to:

    a) Higher tax revenue from listed companies’ income as a result of higher corporate profits

    b) Higher revenues from tax on brokers activity on new listings

    c) Higher revenue from Capital Gains Tax on disposal of newly listed securities.

  • Inflows of remittances registers 5.5 percent decline in April

    Inflows of remittances registers 5.5 percent decline in April

    KARACHI: The inflow of workers remittances has registered decline of 5.5 percent in April 2020, State Bank of Pakistan (SBP) said on Monday.

    Workers’ remittances during April 2020 amounted to US $ 1.79 billion recording a decrease of US $ 104.4 million or 5.5 percent over remittance received during previous month (March 2020, US $ 1.89 billion).

    The workers’ remittances received during July – April FY20 amounted to US $ 18.78 billion recording an increase US $ 980.6 million or 5.5 percent over remittances received during July – April FY19 (US $ 17.8 billion).

    The remittances during April 2020 (US $ 1,790.0 million) increased by US $ 19.8 million or 1.1 percent over remittance received during corresponding month of FY 19 (US $ 1,770.2 million).

    During April 2020, larger amounts of Workers’ Remittances are received from Saudi Arabia (US $ 451.4 million), USA (US $ 401.9 million), UAE (US $ 353.8 million) and UK (US $ 226.6 million) recording an increase of 14.0 percent for USA whereas a decrease of 0.2 percent, 15.8 percent and 8.8 percent for Saudi Arabia, UAE and UK respectively as compared to March 2020.