Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • 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.

  • PTBA asks FBR to allow amnesty declaration filing on already paid tax

    PTBA asks FBR to allow amnesty declaration filing on already paid tax

    LAHORE: Pakistan Tax Bar Association (PTBA) has said that those persons who had made payment for availing tax amnesty scheme but failed to file their returns should be given an opportunity for compliance.

    In a letter to Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) on Friday, the PTBA requested for filing of declaration under Asset Declaration Act, 2019 of persons who made payment of tax prior to deadline.

    The PTBA referred to its letter sent to the chairman on September 18, 2019 on the same issue.

    The tax bar said that in this regard the desired independent legal opinion was also forwarded as given by Makhdoom Ali Khan, Senior Advocate Supreme Court of Pakistan with the previous letter.

    The legal opinion concluded as under:

    The FBR should allow the taxpayers to file their declaration after July 03, 2019 considering –

    That the scheme of the Act 2019 foresees the possibility of the late filing of declaration.

    That the deadline under Section 3 is a directory provision.

    That filing late return cannot be penalized if tax has been paid.

    And that factually the issue arose due to a technical failure of FBR’s online system.

    The FBR’s online portal should be reopened at the very least for filing of declaration of those persons who deposited the tax under the Act 2019 on or before June 03, 2019.

    The PTBA said that the taxpayers, who had paid due tax under this Act, should have been allowed to file their declaration as the basic purpose of the said scheme was to facilitate the taxpayers in order to achieve the objective of documentation of economy and revival of taxation system within the country by bringing more and more people into tax net.

    “Needless to say that, the taxpayers also cannot be suffer from the technical failure of the FBR system.”

    The tax bar once again urged the FBR to allow the taxpayers, who had already paid due tax in this regard, to file their declaration under the Asset Declaration Act, 2019 through their e-portals.

  • PSX signs agreement with Shenzhen Stock Exchange for trading, surveillance system

    PSX signs agreement with Shenzhen Stock Exchange for trading, surveillance system

    KARACHI: Pakistan Stock Exchange (PSX) has signed an agreement with Shenzhen Stock Exchange (SZSE) for the acquisition of a Trading and Surveillance Systems, to bring PSX at par with other international stock exchanges.

    The PSX, in its Board Meeting held on September 26, 2019, took the decision and approved the execution of the contract, said a statement on Friday.

    The formal signing ceremony took place in a grand and colorful event in Shenzhen, China, earlier this week.

    The PSX delegation was headed by the Chairman PSX, Sulaiman S. Mehdi. The Chinese side was represented by the Chief Executive Officer of Shenzhen Stock Exchange, Wang Jianjun.

    The Trading and Surveillance System offered by SZSE is state-of-the-art, robust system. The additional benefits of the SZSE Trading System would be built-in Risk management, Market access, Market data dissemination, Market control, Real-time trading system, Disaster Recovery & System operation, monitoring and management, Growth Enterprise Market (so far known as Small and Medium enterprise trading), Bonds/Term Finance Certificate trading, Single stock option trading, Index option trading and Real time fault-tolerant system. A further additional interface is China Connect which can give PSX access to the other Exchanges that SZSE is connected to i.e. Shanghai and Hong Kong etc.

    This would open up the Asian market to PSX and Pakistan for business opportunities. Additionally, the improved data quality will compound PSX data vending potential and capability immensely.

    The surveillance system consists of features, such as Real-time monitoring, Ex-post investigation, Trade replay, Data query and reporting, Case management, Surveillance task management, Security and audit, and Job Schedule system. These features are world class stock market surveillance tools and PSX stakeholders of the Capital Market will be direct beneficiaries.

    “In today’s fast changing technological world, a reliable, secure and efficient Trading system is a basic requirement for PSX. Further, a robust and state-of-the art Surveillance System, is also an essential requisite as PSX is the only National Exchange and the front line Regulator,” said PSX Chairman Sulaiman Mehdi while speaking at a Media briefing session.

    He further added, “We have received immense support and applause from the Capital Market stakeholders, from the brokerage industry as well as the listed corporates as they all stand to benefit from the efficient operations, new product possibilities and surveillance capabilities that this system will bring.”

    The PSX is confident on the quality of the system which is currently used by the Shenzhen Stock Exchange itself without any lapses. SZSE is the world’s third largest Exchange in terms of trading value which shows the robustness of the trading & surveillance system. SZSE has assured continuous technical support to PSX as a strategic partner post-installation of this system.

    Both PSX and SZSE reaffirmed their commitment to technological cooperation which would be helpful in elevating the image and standing of PSX vis a vis other developed exchanges around the world.

  • Bashirullah Khan posted as Director General Intelligence, Investigation

    Bashirullah Khan posted as Director General Intelligence, Investigation

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified posting of Dr. Bashirullah Khan as Director General, Directorate General of Intelligence and Investigation (Inland Revenue) with immediate effect.

    Dr. Basirullah Khan, a BS-21 officer of Inland Revenue Service (IRS) has been transferred from the post of Chief Commissioner, Regional Tax Office (RTO), Rawalpindi.

    Qaiser Iqbal, BS-21 officer of IRS, has been transferred and posted as Chief Commissioner IR, RTO, Rawalpindi from the post of Director General, Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad.

  • Income tax return filing date extended to December 16

    Income tax return filing date extended to December 16

    In a significant relief for taxpayers, the Federal Board of Revenue (FBR) has once again extended the deadline for filing income tax returns and wealth statements for the tax year 2019. According to FBR’s latest notification – Circular No. 16/2019 – the new date for submission has been set as December 16, 2019, offering individuals and companies a final opportunity to comply with their tax obligations.

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  • FBR, PBA agree on sharing account holders information; banks to withdraw court cases

    FBR, PBA agree on sharing account holders information; banks to withdraw court cases

    KARACHI: Federal Board of Revenue (FBR) has made major breakthrough regarding obtaining information of bank account holders ahead of FATF review.

    The FBR and commercial banks agreed on sharing information of financial transactions by account holders, which was remained under litigation since 2013.

    The FBR sources said that it would help the tax machinery to identify the movement of black economy and also ensure compliance to FATF conditions regarding prevention of money laundering and other fiscal crimes.

    The FATF next review is scheduled in February 2020 to decide Pakistan status, as the country is presently in the grey list.

    FBR chairman Syed Shabbar Zaidi in a tweet message on Friday said: “On behalf of FBR, I thank Pakistan Bank Association and Presidents of all the banks for agreeing to withdraw pending litigation on the matter of furnishing of certain information. This positivity has been achieved by mutual consultation. A way forward of cooperation has opened.”

    In a meeting held on November 27, 2019 at the Large Taxpayers Unit (LTU) Karachi which was chaired by FBR Chairman and attended by members of Pakistan Banks Association (PBA).

    The meeting discussed the issued regarding information to be provided by the banks under Section 165A of the Income Tax Ordinance, 2001.

    The chairman emphasized that the Section 165A had been amended on the specific request of the PBA in 2014, 2018, and recently through Supplementary Finance Amendment Act, 2019.

    Therefore, members should have no objection to the withdrawal of petition in the higher courts, the chairman said.

    After detailed deliberations, the meeting decided that the PBA would withdraw their petitions from the higher courts and provide information under Section 165A after mutual consultation with the FBR.

    The participants of the meeting besides FBR chairman Syed Shabbar Zaidi, included Muhammad Aurangzeb, President/CEO, Habib Bank Limited, Chairman, PBA and Imran Maqbool, President/CEO, MCB Bank limited, Vice Chairman, PBA.

    Representatives of banks who are also executive members of PBA were also present at the meeting.

  • Stock market gains 581 points despite buying activities

    Stock market gains 581 points despite buying activities

    KARACHI: The stock market gained 581 points on Friday despite buying activities in major scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 39,288 points as against 38,706 points showing an increase of 581 points.

    Analysts at Arif Habib Limited said that the aarket went up again by +746 points during today’s sessions, following the resolution of General Bajwa’s extension, however, the market closed with +581 points.

    Market saw brisk buying activity with major contribution from Banks.

    Though E&P remained positive, even better performance was seen in Refinery and OMCs sectors.

    Banks realized trading volume of 86 million shares, mainly contributed by BOP (51.8 million) and BIPL (12.8 million).

    Chemical and Cement sectors trailed Banks with 37.7 million and 35.5 million shares respectively. Among scrips, BOP was followed by PAEL (20.1 million) and KEL (16.4 million).

    Sectors contributing to the performance include Banks (+277 points), Power (+45 points), Cement (+31 points), Autos (+26 points) and Insurance (+25 points).

    Volumes increased further from 348.5 million shares to 428.9 million shares (+23 percent DoD).

    Average traded value also increased by 18 percent to reach US$ 92.6 million as against US$ 78.2 million.

    Stocks that contributed significantly to the volumes include BOP, PAEL, KEL, BIPL and PIBTL, which formed 26 percent of total volumes.

    Stocks that contributed positively include HBL (+97 points), UBL (+76 points), HUBC (+37 points), BAHL (+17 points) and BAFL (+17 points). Stocks that contributed negatively include SNGP (-7 points), MARI (-7 points), EFERT (-6 points), INIL (-4 points), and OGDC (-4 points).