Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Limits of US Dollars taking out of Pakistan

    Limits of US Dollars taking out of Pakistan

    KARACHI: State Bank of Pakistan (SBP) has categorized age limits for taking out of Pakistan US Dollars or equivalent amount of foreign exchange.

    According to updated foreign exchange manual the SBP granted general permission to any person to take out of Pakistan US Dollars or equivalent thereof in other foreign currencies as per the following limit:

    Up to five years $1,000 or annual ceiling per person $6,000

    From 5 years to 18 years $5,000 or annual ceiling per person $30,000

    Above 18 years $10,000 or annual ceiling of $60,000

    In pursuance of sub-section (2) of Section 8 of the Act, the State Bank has issued Notification No. F.E.2/98-SB dated July 21st, 1998 granting general permission to: –

    (a) Authorized Dealers to send out of Pakistan, cheques, drafts or bills of exchange which have been acquired by them in the normal course of their business and within the terms of their authorization.

    (b) Any person maintaining an account expressed in a foreign currency, and held under any permission, general or otherwise, granted by the State Bank of Pakistan to take or send out of Pakistan, cheques or drafts drawn on such account.

    (c) Any person, other than a person to whom foreign exchange is issued for travelling purposes only, to send out of Pakistan foreign exchange issued to him by an Authorized Dealer.

    (d) Any person to take out of Pakistan foreign exchange issued to him by an Authorized Dealer in Pakistan and endorsed on his passport and

    (e) Any person not ordinarily resident in Pakistan, to take out of Pakistan the unspent amount of foreign currency brought by him into Pakistan, provided the period of his continuous stay in Pakistan does not exceed three months.

    As an exception, NGOs, UN/Other Donor Agencies would be able to draw foreign currency from their accounts without any limit for taking it to Afghanistan to the extent of such remittances.

    Authorized Dealers would issue Certificates to these entities in duplicate, one copy of which would be submitted to Customs Authorities and the second would be kept by the concerned NGO/agency which would, however, be stamped by Customs Authorities as ‘Amount allowed to be taken out’.

    The record of all such transactions would be kept by Authorized Dealers for SBP inspection.

  • Pakistan’s trade deficit narrows by 34.42pc in July – November

    Pakistan’s trade deficit narrows by 34.42pc in July – November

    ISLAMABAD: Pakistan’s trade deficit has narrowed by 34.42 percent during first five months (July – November) of current fiscal year owing to improvement in exports, said Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce, Textile, Industry & Production and Investment, on Sunday.

    In a tweet message, he said that as a result of the same policies of the government, the increasing EXPORTS are contributing to improvement in our Balance of Payments position and stabilization of the economy.

    The trade deficit reduced to $9.496 billion during July – November of current fiscal year as compared with the deficit of $14.479 billion in the corresponding period of the last fiscal year.

    The country’s exports registered five percent growth during the period under review. The exports grew to $9.55 billion during first five months of the current fiscal year as compared with $9.11 billion in the same period of the last fiscal year.

    However, the import bill of the country sharply fell by 19.27 percent during the period. The import bill declined to $19.04 billion during July – November of the current fiscal year as compared with $23.59 billion in the corresponding period of the last fiscal year.

  • Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    ISLAMABAD: All two and three wheelers manufactured under Electric Vehicle Policy will sold at less than one percent sales tax for next seven years to bring the purchase price of EVs down, according to the policy.

    However, all two and three-wheeler EV’s imported shall be sold at one percent sales tax for the next five years.

    EVs will be exempted from registration fees and annual token tax to encourage prospective buyers and the FBR shall evolve a policy to evolve tax incentives for prospective buyers of the two-wheeler and three wheelers.

    All existing incentives of the Auto Development Policy 2016-2021 will remain intact, according to EV Policy 2019.

    The policy said that Pakistan had a large market of two and three wheelers. More than twenty million such vehicles are already on roads in Pakistan.

    Their local production has reached indigenization of more than 90 percent. Therefore, the need is to incentivize the already available manufacturing expertise for converting to e-bikes and e-rickshaws.

    Moreover, a new category of low speed electric vehicles have emerged that is added into this category.

    The policy said that EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent customs duty and one percent sales tax for the next two years.

    Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas. The registration number plates will be different from other typical vehicles to distinguish between two, three and low speed four wheel electric vehicles and other vehicles segments.

    A special provision for import of swappable battery-based three wheelers is being introduced to help both introduction of such vehicles and charging infrastructure.

    Those manufacturers or consortia who demonstrate setup of manufacturing of these units and battery swapping infrastructure of running of these vehicles will be allowed to import a cumulative number of 20,000 completely built units (CBU) along with the charging infrastructure at one percent customs duty and can sell these units at one percent sales tax.

  • Property tax collection sharply rises by 214 percent

    Property tax collection sharply rises by 214 percent

    KARACHI: The collection of property tax witnessed unprecedented growth of 214 percent owing to back to back increase in valuation of immovable properties by Federal Board of Revenue (FBR), sources said.

    The quarterly data released by the finance ministry revealed that the provinces had collected property tax to the tune of Rs7.8 billion during first quarter (July – September) 2019/2020 as compared with Rs2.48 billion in the corresponding period of the last fiscal year.

    The sources attributed the significant rise in property tax to increase in FBR valuation which was introduced in August 2016 and increased by 20 percent in February 2019 and further increased with the same ratio in July 2019.

    The provinces have jurisdiction over the collection of property tax in the shape of rented properties in their respective localities.

    The sources said that with the increase of FBR valuation the provinces could able to increase their revenue because the rent agreements are being made on the basis of existing valuation.

    On the other hand the valuations of immovable properties notified by the provinces are very low comparing the open market values. However, under the proposed reform program funded by the World Bank the provinces may review their valuations of immovable properties.

    The major increase in property tax comes from Punjab as the province collected Rs6 billion during first quarter of the current fiscal year.

    It was followed by Sindh, which collected Rs1.5 billion, Khyber Pakhtoonkhwa collected Rs243 million and Balochistan collected Rs89 million.

    The sources said that digitalization of property record and effective measures of documentation would further help the provinces to increase the revenue collection under the head of property tax.

  • SRB suspends sales tax registration of rice mill

    SRB suspends sales tax registration of rice mill

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of a rice mill for defaulting payment and non-compliance of return filing.

    The SRB through a notice suspended the registration of sales tax of M/s. Abdullah Lakhair Rice Mill for failure to deposit due amount of Sindh Sales Tax of Rs502,400.

    Besides, the rice mill also failed to file its monthly returns for the tax periods from August 2017 to December 2017 and from January 2019 to October 2019.

    The SRB asked the mill that the suspension of the registration would only be revoked if it ensures compliance by December 03, 2019.

    The SRB said that in case of non-satisfactory response to take remedial measures the case would be further proceeded for cancellation of registration with SRB.

  • FBR collects Rs1,617 billion in five months; shortfall increases by Rs206 billion

    FBR collects Rs1,617 billion in five months; shortfall increases by Rs206 billion

    ISLAMABAD: The shortfall in revenue collection by Federal Board of Revenue (FBR) has soared to Rs206 billion during first five months (July – November) 2019/2020 making it more difficult for revenue authorities to achieve full year target of Rs5,550 billion.

    As per the revenue collection till Friday evening, the FBR provisionally collected Rs1617 billion during July – November 2019/2020 as compared with the five – month target of Rs1,829 billion.

    The FBR sources said that the provisional figures may increase to Rs1623 billion after finalization of collection.

    However, the FBR achieved 17 percent growth in first five months by collecting Rs1617 billion when compared with Rs1383 billion in the corresponding months of the last fiscal year.

    In the month of November 2019 the FBR collected Rs334 billion, which is 18 percent higher when compared with Rs282 billion in the same month of the last year.

    The FBR also missed the monthly target for the month of November 2019, which was Rs381 billion.

    It is worth mentioning here that the collection for fiscal year 2018/2019 had posted negative growth in 51 years.

  • Customs detects fake financial instruments by importers for provisional clearance

    Customs detects fake financial instruments by importers for provisional clearance

    KARACHI: Customs authorities have foiled a bid to clear consignments by some fabric importers on basis of fake financial instruments as payment of duty and taxes.

    In a statement on Saturday, Model Customs Collectorate (MCC) Port Muhammad Bin Qasim said that importers M/s. Gravity Trading Company, M/s. Iqra Textile and M/s Voroly Impex were required to submit pay order in lieu of provisional assessment of value on the basis of Sindh High Court order dated October 31, 2019 in various petitions.

    The importers submitted 43 pay orders amounting Rs63.50 million, in the bank guarantee section of the collectorate as securities.

    The collectorate said that the importers were involved in submission of fake pay orders. The phenomenon was detected after scrutiny of the financial instruments, such as printing of same branch code pertaining to different branches of Karachi and Lahore of same bank. The bank has also confirmed the pay orders as fake.

    The illegal and fraudulent act, with the active connivance of their clearing agent M/s Kanwal Enterprises and M/s. Welcome Services constituted an offence. Accordingly the GDs of the importers have been blocked.

    The collectorate lodged FIR against the importers and their facilitators.

    The bank guarantee section has also been directed to be vigilant on submission of the securities along with verification of available and new securities, especially pay orders and bank guarantees.

  • Information of account holders to be furnished by banks under Section 165A

    Information of account holders to be furnished by banks under Section 165A

    KARACHI: Federal Board of Revenue (FBR) and banks have agreed on sharing information of financial transactions made by account holders.

    The information to be furnished by the banks was to be implemented in 2013 but due to litigation it was not enforced.

    However, on November 27, 2019 the banks, in a meeting with FBR chairman, agreed to provide information of transactions. They also agreed to withdraw cases filed against implementation of Section 165A.

    The Section 165A was introduced to Income Tax Ordinance, 2001 through Finance Act, 2013.

    165A. Furnishing of information by banks

    (1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

    (a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month.”

    (b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

    (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;

    (d) a list of persons receiving profit on debt exceeding five hundred thousand rupees and tax deductions thereon during preceding financial year.

    (2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.

    (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.

    (5) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.

  • Weekly Review: Stock market to remain positive on improved macroeconomic position

    Weekly Review: Stock market to remain positive on improved macroeconomic position

    KARACHI: The stock market to remain positive during next week owing to inflows in treasury bills and improved macroeconomic position of the country, analysts said.

    Analysts at Arif Habib Limited hoped that market to remain positive on the back of improving macroeconomic position, country witnessing foreign net inflows in T-bills to USD 1,154 million in FY20TD, declining fixed income yields, improvement in ease of doing business, stable market determined exchange rate since last four months around 156/USD, and likelihood of monetary easing to start soon.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.7x (2020) compared to Asia Pac regional average of 13.5x while offering a dividend yield of ~8.1 percent versus ~2.6 percent offered by the region.

    During the outgoing week trading commenced on a positive note attributable to State Bank leaving discount rate unchanged which bode well for local bourse. However, the index lost -400 points on Tuesday as Honorable Supreme Court took notice on Army Chief’s appointment.

    Meanwhile, index recovered after considering this appointment as a procedural issue along with continuous surge in foreign investment in T-Bills which crossed USD 1bn mark leading to rising foreign exchange reserves improving investor’s sentiments.

    As a result, the benchmark KSE-100 index crossed 39K mark after eight months and closed at 39,288 points, increasing by 1,362 points or 3.59 percent WoW. During Nov’19, KSE-100 index increased by 5,084 points or 14.9 percent MoM (this is highest ever monthly return after May’13).

    Contribution to the upside was led by i) Commercial Banks (+522 points) due to attractive valuation, ii) Cement (+120 points) amid robust sales numbers, iii) Fertilizer (+116 points), iv) Automobile Assemblers (+80 points), and v) Chemicals (+75 points).Scrip wise major gainers were HUBC (+132 points), FFC (+94 points), PSO (+40 points), LUCK (+32 points), and NATF (+29 points). Whereas, scrip wise major losers were HBL (-63 points), BAHL (-26 points), and PIBTL (-15 points).

    Foreign offloaded stocks worth of USD 8.06 million compared to a net buy of USD 8.46 million last week. Major selling was witnessed in Cements (USD 3.36 million) and E&P (USD 1.95 million).

    On the local front, buying was reported by Mutual Funds (USD 11.06 million) followed by Individuals (USD 7.30 million). That said, average daily volumes for the outgoing week were up by 5 percent to 348 million shares likewise value traded increased by 8 percent to USD 80 million.

  • Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    KARACHI: The new 72-hour sales tax refund clearance strategy of Federal Board of Revenue (FBR) has failed as another Rs62 billion refunds were stuck up since launch of the new systems, exporters said.

    Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum in a statement on Friday said that around Rs62 billion of textile exporters liquidity held up with the government under FASTER Refund System in last 4 months, after imposition of 17 percent Sales Tax on Exports.

    Before abolishing SRO 1125 – zero percent sales tax for five export oriented industries –the government committed that sales tax refund claims payments will be paid immediately after submission of GD like Bangladesh Model.

    Contrary to Bangladesh Refund Model, Govt. launched FASTER by which sales tax refunds to be paid within 72 hours electronically. New FASTER system has been failed and FBR processing claims manually and SBP paying refund on advice of FBR.

    He said that huge amount of exporters’ liquidity of billions of rupees in Sales Tax Refund, Custom Rebate, Withholding Tax, DDT and DLTL has been stuck up with the government causing great sufferings to the already burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the Value Added Textile Exporters.

    On the demand of exporters, the government has withdrawn Refund Bonds electronically but payments against refund bonds have not been paid yet to the exporters, he informed.

    FBR also claimed that Custom Rebates shall be paid electronically with Export Proceeds as a result of system automation, however, the plan has not been turned into reality but previous backlog of eight months have been increased to twelve months.

    He added that due to financial hardships, Value Added Textile SMEs are not taking new export orders.

    It is pertinent to note that meager increase in the exports of value added textile sector due to previous policies of Government before Budget 2019-20.

    The impact of the policies of current Budget 2019-20 will be arrived in 2020 calendar year. It is a great irony that FBR vide SRO 747(I)/2019 dated 9th July, 2019 has withdrawn the exemption of sales tax and federal excise duty on buying of locally procured input goods by Export Oriented Units under SRO327.

    This Scheme was introduced on the pattern of Export Processing Zone (EPZ) where there is no taxes on buying of locally procured input goods and no taxes on utilities.

    Industries registered in Export Oriented Units (EOU) are liable to export 80% of their annual production. FBR should withdraw amendment to omit the clause 10 sub-section (b) and (c) of the Export Oriented Units and Small and Medium Enterprises Rules, 2008 so that exporters operating under Export Oriented Units can procure input goods without taxes as this is the safest scheme and item-wise individual analysis card is submitted in WEBOC.

    He said that exporters have a gut feeling that FBR with its harsh policies is trying to destroy value added textile export sector which is the largest export sector and labour intensive.

    It is an alarming situation that new comers are not interested in the business of export sector due to harsh incumbent government policies. Our existing Export Industry gets spillover orders from the international buyers and is surviving due to economy of scale and efficiency in the production.

    He demanded that government should clear all pending refund payments of exporters forthwith and restore zero rating (0%) of sales tax – no payment no refund regime in the best interest of exports, economy, foreign exchange earnings, employment etc.