The Federal Board of Revenue (FBR) has taken a significant step towards concluding the tax assessment process for the year 2019 by issuing the final return forms for salaried individuals, business entities, and Associations of Persons (AOPs).
(more…)Author: Mrs. Anjum Shahnawaz
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Stock market gains 385 points amid fault at opening
KARACHI: The stock market gained 385 points on Monday after witnessing technical fault at the opening of trading.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 30,057 points as against 29,672 points showing an increase of 385 points.
Analysts at Arif Habib Limited said that after encountering a technical glitch at start, the index progressed well during the day, led by across the board buying activity in E&P, Banks, Cement and Steel Sectors.
The main reason behind the surge in index can be attributed to resolution a host of measures approved by SECP over the weekend that helped investors take a positive view on equities.
Besides, expectation of lower inflation reading going forward that hints of reduction in SBP policy rate.
Overall, the index went high by 506 points during the session and although receded later but rebounded market close.
Sectors contributing to the performance include Commercial Banks (+130 points), E&P (+71 points), OGMC (+37 points) and Fertilizer (+35 points).
Volumes decreased from 110 million shares to 77.4 million shares. Average traded value decreased by 34.7 percent to reach $16.5 million as against $25.3 million.
Stocks that contributed significantly to the volumes include WTL, MLCF, OGDC, KEL and TRG, which formed 39 percent of total volumes.
Stocks that contributed positively include PPL (+46 points), BAHL (+32 points), FFC (+27 points), UBL (+26 points) and HBL (+23 points). Stocks that contributed negatively include THALL (-8 points), MUREB (-7 points), MTL (-3 points), HASCOL (-3 points) and MARI (-2 points).
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Rupee gains 23 paisas on improved inflows
KARACHI: The Pak Rupee appreciated 23 paisas against dollar on Monday owing to improved inflows of remittances and export receipts.
The rupee ended Rs156.63 to the dollar from previous last Friday’s closing of Rs156.86 in interbank foreign exchange market.
Currency experts said that the rupee value was improved on inflows of remittances and export receipts.
The foreign currency market was initiated in the range between Rs156.40 and Rs156.55. The market recorded day high of Rs156.70 and low of Rs156.45 in interbank foreign exchange market.
The exchange rate in open market also witnessed 30 paisas appreciation in value of the local currency.
The buying and selling of dollar was recorded at Rs156.20/Rs156.70 from last Friday’s closing of Rs156.50/Rs157.00 in cash ready market.
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FBR explains treatment of duty, taxes on goods imported under foreign trade agreements
The Federal Board of Revenue (FBR) has provided comprehensive details regarding the taxes for goods imported under trade agreements with foreign countries.
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MCC Port Qasim surpasses revenue collection target for August 2019
KARACHI: Model Customs Collectorate (MCC) Port Muhammad Bin Qasim has surpassed revenue collection target for the month of August 2019.
The collectorate collected Rs56 billion during August 2019, three percent higher than the target of Rs54.3 billion.
The collection is also 17 percent higher when compared with Rs46.65 billion collected in August 2018, according to a press release issued by the collectorate on Sunday.
The break-up of collection revealed that the collection of customs duty posted 15 percent growth to Rs18 billion during the month under review as compared with Rs15.2 billion in the same month of the last year.
Similarly, in the same period the collection of sale tax increased to Rs32.47 billion as compared with Rs25.8 billion. Besides the collection of federal excise duty has increased to Rs393 million from Rs345 million.
The collection of advance income tax at import stage increased to Rs5.6 billion in August 2019 as compared with Rs5.2 billion in the same month of the last year.
Commenting on the revenue collection performance, Mumtaz Ali Khoso, collector of MCC Port Muhammd Bin Qasim said that the collection was impressive despite steep decline in imports.
He lauded the leadership of Chairman of Federal Board of Revenue (FBR) Syed Muhammad Shabbar Zaidi, Member Customs-Operations Dr. Jawwad Uwais Agha and Chief Collector (Appraisement-South), Kharachi Ms. Suraiya Ahmed Butt.
He also lauded the efforts of his team of officers and staff in achieving the revenue target and expressed the resolve to achieve the remaining revenue target for the current financial year.
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FBR explains dutiable goods imported into Pakistan
KARACHI: Federal Board of Revenue (FBR) has defined dutiable goods imported into Pakistan under Customs Act, 1969.
The FBR issued Customs Act, 1969 updated June 30, 2019 and explained goods dutiable under Section 118 of the Act.
Section 18: Goods dutiable
(1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on,-
(a) goods imported into Pakistan;
(b) goods brought from any foreign country to any customs station, and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs-station; and
(c) goods brought in bond from one customs station to another. 105(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on import of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein.
(2) No export duty shall be levied on the goods exported from Pakistan.
(3) The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the goods imported or exported, as specified in the First Schedule at a rate not exceeding one hundred per cent of the value of such goods as determined under section 25 or, as the case may be, section 25A.
(4) The regulatory duty levied under sub-section (3) shall –
(a) be in addition to any duty imposed under sub-section (1) or under any other law for the time being in force; and
(b) be leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day.]
(5) The Federal Government may, by notification in the official Gazette, levy an additional customs-duty on such imported goods as are specified in the First Schedule, at a rate not exceeding thirty-five per cent of value of such goods as determined under section 25 or, as the case may be, section 25A:
Provided that the cumulative incidence of customs-duties leviable under sub-sections (1) and (5) shall not exceed the rates agreed to by the Government of Pakistan under multilateral trade agreements.
(6) The additional customs-duty levied under sub-section (5) shall be,-
(a) in addition to any duty imposed under sub-sections (1) and (3) or under any other law for the time being in force; and
(b) leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the official Gazette in which such notification appears is published at any time after that day.
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All sales tax refund claims to be processed through risk management system
ISLAMABAD: Federal Board of Revenue (FBR) has said that every refund claim of sales tax refund shall be processed through Risk Management System of the FBR’s computerized system.
The FBR amended the Sales Tax Rules, 2006 through SRO 918(I)/2019 to make mandatory the routing of refund claims through RMS of the FBR’s computerized system.
Based on the parameters in RMS, a refund claim shall be routed to any of the following three channels as described below, namely:−
(a) Fully Automated Sales Tax e-Refund System (FASTER), The provisions related to this channel are prescribed in Chapter V-A.
(b) Expeditious Refund System (ERS), The claims filed by the manufacturer cum-exporters under section 10 of the Act that do not fulfill parameters of FASTER channel and the same are considered as involving medium risk by RMS shall be routed to ERS. The RPO for verified amount shall be generated and forwarded to CSTRO for payment.
(c) Sales Tax Automated Refund Repository (STARR), The claims that do not fulfill criteria for both FASTER and ERS channels shall be processed through STARR in the manner as provided in rule 29.
For the refund claims processed through FASTER or ERS, the part of the refund claim that is not verified or not found admissible shall be subjected to system validation checks every week and Refund Payment Order (RPO) shall be generated for the amount found valid during each validation check. After every validation process, the information regarding RPO generated, if any, as well as the objections shall be communicated by the system to the refund claimant and also to the concerned RTO or LTU for information.
The FBR said that RPO so generated shall be communicated to the State Bank of Pakistan for payment in the aforesaid manner. After eight validation checks, including the initial one, if any amount still remains un-cleared, the same shall then be processed under STARR channel.
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Abolition of SRO 1125 does not affect income tax concessions
KARACHI: The abolition of SRO 1125(I)/2011 has not taken away concessions available under income tax laws, the ministry of law and justice said in its opinion.
The SRO 1125(I)/2011 has been rescinded through Finance Act, 2019 and all the benefits available under this such as zero-rating of sales tax and reduced rates of sales tax had been abolished.
The Federal Board of Revenue (FBR) sent an Office Memorandum (OM) to the ministry of law and justice explaining that SRO 1125(I)/2011 dated December 31, 2011 had prescribed zero-rate sales tax for a particular class of taxpayers, while SRO 480(I)/2007 dated June 09, 2007 had specified the Sales Tax Procedure Rules, 2007.
Both SROs stood rescinded through SRO 694(I)/2019 dated June 29, 2019.
“Thus, in view of the aforesaid recession there is no doubt that the sales tax concession available under SRO 1125 and SRO 480 is no longer available.”
The ministry said that the answer to the queries raised in the OM warrants to be divided into two parts. The first part deals with Part II of the First Schedule to the Income Tax Ordinance, 2001, which deals with imports under Section 148 of the 2001 Ordinance; while the second part deals with Section 235-B(1) of the 2001 Ordinance.
“We have been instructed to the effect that Part II of the First Schedule to the 2001 Ordinance has given a certain reprieve to a ‘specified class of taxpayers’ for the purposes of import under section 148 of the 2001 Ordinance. In prescribing the said reprieve of income tax, the specified class of taxpayers who qualify for the said concession have been described in Part II of the First Schedule to the 2001 Ordinance to be those who are covered under SRO 1125 i.e. the notification which had prescribed the zero rated sales tax.”
“Therefore, the precise query posed to us is whether the repeal of SRO 1125 automatically also takes away the income tax concession given under Part II of the First Schedule to the 2001 Ordinance, in respect of imports under Section 148 of the 2001 Ordinance, 2001? The simple answer is that the concession prescribed in Part II of the First Schedule to the 2001 Ordinance has not been taken away.”
It is only for the purpose of a handy and convenient description of the person who are meant to enjoy the benefit or reprieve under Part II of the First Schedule to the 2001 Ordinance have been cross referred or defined to be the ‘specified class of taxpayers’ who qualify for the reprieve under SRO 1125.
The said reference is only for the purpose of a convenient identification of that class which is meant to enjoy the concession under Part II of First Schedule to the Income Tax Ordinance, 2001, the ministry said.
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Customs stops goods removal from EPZ without authority
In a bid to tighten regulatory oversight and prevent unauthorized movement of goods, Pakistan Customs has barred customs agents from removing goods from Export Processing Zones (EPZ) without a proper authority letter issued by the relevant investor or importer.
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Weekly Review: Bulls likely return on attractive levels
KARACHI: The stock market may witness bullish trends during the next week after bears dominated the current week, analysts said.
Analysts at Airf Habib Limited said expect that the market to remain positive in the upcoming weeks since valuations have opened up to attractive levels.
Moreover, the government intends to issue Rs200 billion Sukuks so as to address problems of power sector. Any development in this regard will serve as a positive trigger for the market. With foreign reserves and external accounts improving as well as stability on PKR/USD front, they expect foreign interest to revive.
The market commenced on a negative note this week, carrying the pressure from last Friday since Asia Pacific Group kept Pakistan on enhanced monitoring mechanism. Moreover, privatization commission’s decision to divest some portion of government’s stake in State Owned Companies such as OGDC, PPL, KAPCO and PAKRI kept the sentiment weak.
However, amendment in GIDC Act 2015, giving 50 percent waiver to Fertilizer, Chemical, Cement and Textile Companies, cushioned the dip. Albeit, the market closed at 29,672 points down by a massive 1,678 points (5.4 percent WoW).
Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (519 points) ii) Commercial Banks (400 points), iii) Oil & Gas Marketing Companies (160 points), iv) Cement (139 points), and v) Power Generation & Distribution (216 points). Scrip-wise negative contributions were led by OGDC (247 points), PPL (193 points), HBL (134 points), BAHL (79 points) and PSO (63 points).
Foreign buying was witnessed this week clocking-in at USD 0.97 million compared to a net sell of USD 4.97 million last week. Buying was witnessed in Commercial Banks (USD 2.5 million) and Technology and Communication (USD 1.0 million).
On the domestic front, major selling was reported by Mutual Funds (USD 13.5 million), however Individuals remained net buyers of USD 7.8mn. Average Volumes settled at 124mn shares (down by 29 percent WoW) while average value traded clocked-in at USD 29 million (down by 23 percent WoW).