Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Rs40,000 bearer prize bonds allowed conversion up to March 31

    Rs40,000 bearer prize bonds allowed conversion up to March 31

    KARACHI: People can surrender Rs40,000 denomination bearer prize bonds by March 31, 2020 and exchange the amount with registered bonds or other given options.

    The SBP stopped the issuance of Rs40,000 denomination prize bonds on June 24, 2019 and given deadline of March 31, 2020 for exchange the such denomination with other registered mode of investment.

    Since the announcement of the central bank, the holders of bearer bonds had surrendered around Rs238 billion till November 2019.

    The total investment Rs40,000 denomination bearer bonds peaked at Rs258 billion by May 2019, which reduced to around Rs20 billion by November 2019.

    SBP stops banks selling Rs40,000 prize bonds, issues procedure for conversion into registered bonds

    The SBP in a notification issued in June 2019 issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:

    a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.

    b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.

    c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:

    1. Conversion of premium prize bonds (registered)

    2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)

    3. Encashment at face value.

    d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:

    Conversion to Premium Prize Bonds (Registered)

    i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).

    ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.

    iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.

    Replacement with the Special Saving Certificate (SSC)/Defence Saving Certificate (DSC)

    i. The bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.

    ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.

    iii. The bondholder shall also be required to submit application form for purchase of SSC/DSC (SC-1) as per the prescribed procedure.

    Encashment at Face Value:

    i. The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches.

    ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.

    A copy of the application form, duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.

    The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.

    Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

    It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.

  • Advance tax on purchase of immovable property to be paid on fair market value

    Advance tax on purchase of immovable property to be paid on fair market value

    KARACHI: Federal Board of Revenue (FBR) will collect advance income tax on sale of immovable properties on the basis of fair market value.

    Sources in FBR said that the purchaser of immovable property shall make payment of advance tax income tax on the amount determined at fair market value not on the DC value or valuation tables notified by the FBR.

    Under Section 236K of Income Tax Ordinance, 2001, advance tax on purchase or transfer of immovable property.

    (1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.

    (2)The advance tax collected under sub-section (1) shall be adjustable.

    (3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    (4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:

    “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

    The rate of tax to be collected under section 236K shall be 1 percent of the fair market value from a person appeared on Active Taxpayers List (ATL). The rate shall be at two percent of the fair market value from persons not appearing on the ATL.

  • Pakistan Customs’ security, integrity at mercy of lappus

    Pakistan Customs’ security, integrity at mercy of lappus

    KARACHI: The sensitive data of Pakistan Customs and integrity of the department are totally at mercy of privately hired persons ‘lappus’ by Customs officers.

    These lappus are not only accessing sensitive data of Pakistan Customs but also doing all illegal work for their bosses, which is commonly known as ‘settlement’.

    The gravity of situation can be gauged with the recent example where a lappu auctioned of huge amount consignments where importer had paid duty and taxes.

    The customs authorities apprehended one person in the case, who was identified as lappu and was working and representing customs officers for the last five to six years.

    According to details a First Information Report (FIR) dated November 15, 2019 was lodged at Research and Development Department, Model Customs Collectorate of Appraisement (East) Customs House, Karachi.

    The FIR was lodged by Shakeel John, Appraising Officer following a crime of removing goods from Shaheen Container Yard after an illegal auction of goods.

    The FIR nominated persons included: Muhammad Zaki; Adeel Ahmed; Meer Rizwan Ali; and concerned staff and management of M/s Pak Shaheen Container Yard.

    In the case three lots of consignments were auctioned valuing over Rs12 million on which importer had paid duty and taxes.

    The importer namely Abid Japanwala made strong protest on illegal auction by customs authorities and demand recovery of his consignments.

    The text of relevant paragraphs of reply submitted by Pak Shaheen to the FIR stated:

    “… an LCL cargo bearing IGM No. 402/18 consisting of 10 pallets STC Copper Foil weighing 6053kgs was imported on 21.08.2018 by M/s. Paramount Radiators and forwarded to Pak Shaheen Container Terminal for clearance by the freight forwarders i.e. Facilities Shipping Agency.

    “Since the cargo was not cleared within the prescribed time period as per Section 82 of the Customs Act, 1969, an auction lot number PS-216-10-18 was assigned to it and the customs was informed accordingly on October 15, 2018.

    “On November 11, 2019, the importer namely Abid Japanwala approached the Terminal and informed that his cargo has been cleared by the customs and requested for rebate in storage charges as his cargo remained at the terminal for more than a year incurring heavy amount of storage charges.

    “On receipt of such request from Japanwala the record of the terminal was checked and it was found that, as per record, the said cargo was auctioned by the Customs and on November 08, 2019 the delivery was made to the bidder Babar Saleem through his agent Mir Rizwan Ali.

    “When Abid Japanwala was informed about the auction of his cargo, he showed his out of charge GD to the Head of Commercial Naveed Nabi Khan and appeared to be shocked and stated that how can his cargo be auctioned when he deposited the Customs duty.

    “After seeing the out of Charge GD, Abid Japanwala was informed that as per customs rules no duty paid consignment can be auctioned and that he should take up his case with Collector (East) directly.

    “He was also given a complete set of auction/delivery documents to take up his case with the Collector (East).

    “We were later informed that the importer approached the Collector (East) along with the auction documents provided by the terminal as it was feared that some unscrupulous element managed to play fraud depriving the importer of his consignment and depriving the client of demurrage charges.”

    The reply further pointed out:

    “… On November 15, 2019, the Customs apprehended one Zaki who was working with the Customs staff at the terminal since last five to six years as customs assistant commonly known as ‘lappu’ and during all these years h ad attained the status of focal person of Customs and for all practical purposes he was representing the customs official.

    “On November 16, 2019, Akmal Durrani, Assistant Collector posted at Pak Shaheen Terminal, called the concerned staff of Customer Services and interrogated them and also took the video recording of November 08, 2019 in which Zaki can been seen taking subject document from his car.”

    The detailed reply by Pak Shaheen Terminal helped the terminal operator to clear its position in this fraud. This resulted that interim challan presented by the customs authorities at the Special Judge Customs and Taxation, Karachi dated December 02, 2019 the name of Pak Shaheen was excluded from the case.

    The revelation of Pak Shaheen in its reply is eye opener for Federal Board of Revenue (FBR) and other relevant authorities that how privately hired persons or lappus were authorized access to customs records.

    This is also surprising that how these unauthorized lappus getting entry to terminal yard.

    The presence of lappus in Pakistan Customs is not new. The lappus are working for long time in the department and conducting official works on behalf of senior customs officials.

    It is commonly known that the customs officers hire these people for their ‘speed money’.

    The lappus as agent create win win situation for both customs officers and importers at the cost of national revenue. As facilitators lappus get huge commission beside their fixed income set by the customs officers.

    These lappus have direct interaction with importers on those consignments where misdeclaration made. The customs officers are no where or have no direct links in such illegal activities.

    The dangerous aspect of presence of lappus is access to sensitive data of Pakistan Customs, which has also strategic importance.

    Recently, Prime Minister Imran Khan pointed out massive corruption in Pakistan Customs. Although the prime minister quoted exaggerated amount but the instant case may be an example that how much the customs collectors are earning through illegal means.

    The Federal Board of Revenue (FBR) has issued many warnings to field formations to avoid the presence of unauthorized persons working within their jurisdictions. But all in vain as presence of lappus are still in the key places of Pakistan Customs.

    FBR chairman Shabbar Zaidi, in May 2019 soon after becoming chairman, while taking notice of presence of large number of visitors for making the entire clearance system doubtful, had ordered Customs Wing to strictly restrict, entry into Customs Houses, only to the concerned traders, their authorized representatives and members and relevant trade bodies/ associations.

  • Tax return to be valid on submission of information

    Tax return to be valid on submission of information

    KARACHI: Submission of relevant particulars or information shall make a return of income a valid document.

    Officials at Federal Board of Revenue (FBR) said that taxpayers should ensure making all relevant entries before filing income tax return in order to avoid hassle at the time of scrutiny,

    They said that although the tax authorities treated the income tax return as assessment order when it is filed to the FBR’s portal. However, when it is selected under defined parameters or identification of any concealment the missing entries can make problems for taxpayers, they added.

    The officials also said that a taxpayer should also ensure the payment of tax as calculated on the basis of tax chart for the relevant year for which the return is filed.

    They said that a return of income –

    (a) shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

    (b) shall fully state all the relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer;

    (c) shall be signed by the person, being an individual, or the person’s representative where section 172 applies;

    (d) shall be accompanied with evidence of payment of due tax as per return of income;

    (e) shall be accompanied with a wealth statement as required under section 116; and

    (f) shall be accompanied with a foreign income and assets statement as required under section 116A.

  • PM to announce tax relief package for traders on January 20

    PM to announce tax relief package for traders on January 20

    ISLAMABAD: Prime Minister Imran Khan is set to unveil a tax relief package for traders on January 20, 2020, as confirmed by Syed Shabbar Zaidi, the chairman of the Federal Board of Revenue (FBR), on Saturday.

    (more…)
  • Overseas Pakistanis send $11.4 billion during first half

    Overseas Pakistanis send $11.4 billion during first half

    KARACHI: Overseas Pakistanis have sent $11.4 billion during first half (July – December) 2019/2020, which is 3.31 percent higher than remittances received in the same period of the last fiscal year, State Bank of Pakistan (SBP) said on Saturday.

    The central bank said that overseas Pakistani workers remitted $11.4 billion in the first half (July to December) of FY20, showing a growth of 3.31 percent compared with $11.03 billion received during the same period in the preceding year.

    During December 2019, the inflow of workers’ remittances amounted to $ 2097.23 million, which is 15.25 percent higher than November 2019 and 20 percent higher than December 2018.

    The country wise details for the month of December 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $ 472.94 million, $ 427.56 million, $ 357.45 million, $ 324.57 million, $ 205.73 million and $ 56.42 million respectively compared with the inflow of $ 414.59 million, $ 351.19 million, $ 276.29 million, $ 267.79 million, $ 174.42 million and $ 47.48 million respectively in December 2018.

    Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during December 2019 amounted to $ 252.56 million together as against $ 216.35 million received in December 2018.

  • Razak Dawood hints incentives for exporters in next budget

    Razak Dawood hints incentives for exporters in next budget

    KARACHI: Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Industry and Production on Saturday said that the ministry of commerce is planning a comprehensive strategy with the help of Federal Board of Revenue (FBR) to introduce export incentives in the next federal budget 2020/2021.

    Razak Dawood was addressing during his visit to Karachi Chamber of Commerce and Industry (KCCI). He said that increase in exports is must for economic growth. The adviser said that the purpose of increasing exports is to boost foreign exchange reserves of the country.

    The adviser said that the economy was facing immense challenges a year ago. The economy was facing monthly $2 billion deficit during the period. The present government had taken decisions to improve the economic condition. “These decisions have resulted in shrinking current account deficit,” he added.

    The foreign exchange reserves of the country have increased to $18 billion from $11 billion.

    He pointed out criticism on five percent growth in exports and rupee devaluation and said that it should be realized that globally exports had declined. He said that Pakistani exports had increased in terms of volume.

    Razak Dawood said that exports should be duty and tax free. “In this regard we are planning with the FBR to facilitate exporters,” he added.

    He informed that India was allowed duty drawback on around 1,000 items. “If India is granting duty drawback on 1,000 items then we should increase the numbers,” he added.

    The adviser said that in the past the country had focused only on five sectors for exports. “We need to identify and increase the number of exportable items.”

    He said that businessmen complaining about non-issuance of refunds. “This is not correct. The government has released Rs17.5 billion refunds,” he added. “This month more refunds will be issued to non-textile sector.”

    The adviser said that the export of meat and poultry had increased by 54 percent. “We analyzed data and identified the exports of livestock was going to Saudi Arabia and UAE,” he said, adding that around 60 tons sea food products had been exported to China.

  • Stock market to maintain upward trajectory

    Stock market to maintain upward trajectory

    KARACHI: The stock market may maintain upward trajectory during next week, analysts said.

    Fundamentals appear intact with stable PKR, compressing current account deficit, and inflows in T-bills, PIBs and the local bourse, should all bode well for the index.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.6x (2020) compared to Asia Pac regional average of 12.5x and while offering DY of ~6.3 percent versus ~2.7 percent offered by the region.

    The market depicted a mixed trend during the outgoing week with the benchmark KSE-100 index witnessing some weakness at the beginning of the week amid rising conflict between Iran and the US.

    Sentiments further worsened mid-week given Iranian strike on US Military base in Iraq. Albeit, the Pakistani bourse echoed global stock markets, depicting a swift rally post speech of the POTUS Donald Trump, which helped de-escalate tensions. With that, the market breached a 17 month high level of 13k to close at 43,207points (up by 2.1 percent WoW, +884 points WoW).

    Sector-wise positive contributions came from i) Commercial Banks (403 points), ii) Oil & Gas Exploration Companies (178 points), iii) Fertilizer (111 points), iv) Power Generation (86 points), and v) Cement (77 points). Whereas, negative sector-wise contribution came from Automobile Assemblers (44). Scrip-wise positive contributions were led by HUBC (105 points), HBL (95 points), PPL (88 points), LUCK (87 points) and UBL (73 points).

    Foreign buying witnessed this week clocking-in at USD 7.0 million compared to a net sell of USD 7.3 million last week. Buying was witnessed in Fertilizer (USD 5.9 million) and E&Ps (USD 1.8 million).

    On the domestic front, major selling was reported by Mutual Funds (USD 5.9 million) and Individuals (USD 4.0 million). Average Volumes settled at 303 million shares (up by 8 percent WoW) while average value traded clocked-in at USD 78 million (up by 13 percent WoW).

  • WCO members accept HS 2022 for customs tariffs

    WCO members accept HS 2022 for customs tariffs

    KARACHI: Member countries of World Customs Organization (WCO) have accepted HS 2022, the seventh edition of the Harmonized System (HS) nomenclature used for the uniform classification of goods traded internationally all over the world.

    It shall come into force on January 01, 2022, said a statement issued by WCO.

    The HS serves as the basis for Customs tariffs and for the compilation of international trade statistics in 211 economies (of which 158 are Contracting Parties to the HS Convention).

    The new HS 2022 edition makes some major changes to the Harmonized System with a total of 351 sets of amendments covering a wide range of goods moving across borders.

    Here are some of the highlights:

    Adaption to current trade through the recognition of new product streams and addressing environmental and social issues of global concern are the major features of the HS 2022 amendments.

    Visibility will be introduced to a number of high profile product streams in the 2022 Edition to recognize the changing trade patterns.

    Electrical and electronic waste, commonly referred to as e-waste, is one example of a product class which presents significant policy concerns as well as a high value of trade, hence HS 2022 includes specific provisions for its classification to assist countries in their work under the Basel Convention.

    New provisions for novel tobacco and nicotine based products resulted from the difficulties of the classification of these products, lack of visibility in trade statistics and the very high monetary value of this trade.

    Unmanned aerial vehicles (UAVs), commonly referred to as drones, also gain their own specific provisions to simplify the classification of these aircraft.

    Smart phones will gain their own subheading and Note, which will also clarify and confirm the current heading classification of these multifunctional devices.

    Major reconfigurations have been undertaken for the subheadings of heading 70.19 for glass fibres and articles thereof and for heading 84.62 for metal forming machinery. These changes recognize that the current subheadings do not adequately represent the technological advances in these sectors, leaving a lack of trade statistics important to the industries and potential classification difficulties.

    One area which is a focus for the future is the classification of multi-purpose intermediate assemblies. However, one very important example of such a product has already been addressed in HS 2022. Flat panel display modules will be classified as a product in their own right which will simplify classification of these modules by removing the need to identify final use. Health and safety has also featured in the changes. The recognition of the dangers of delays in the deployment of tools for the rapid diagnosis of infectious diseases in outbreaks has led to changes to the provisions for such diagnostic kits to simplify classification. New provisions for placebos and clinical trial kits for medical research to enable classification without information on the ingredients in a placebos will assist in facilitating cross-border medical research. Cell cultures and cell therapy are among the product classes that have gained new and specific provisions. On a human security level, a number of new provisions specifically provide for various dual use items. These range from toxins to laboratory equipment.

    Protection of society and the fight against terrorism are increasingly important roles for Customs. Many new subheadings have been created for dual use goods that could be diverted for unauthorized use, such as radioactive materials and biological safety cabinets, as well as for items required for the construction of improvised explosive devices, such as detonators.

    Goods specifically controlled under various Conventions have also been updated. The HS 2022 Edition introduces new subheadings for specific chemicals controlled under the Chemical Weapons Convention (CWC), for certain hazardous chemicals controlled under the Rotterdam Convention and for certain persistent organic pollutants (POPs) controlled under the Stockholm Convention. Furthermore, at the request of the International Narcotics Control Board (INCB), new subheadings have been introduced for the monitoring and control of fentanyls and their derivatives as well as two fentanyl precursors. Major changes, including new heading Note 4 to Section VI and new heading 38.27, have been introduced for gases controlled under the Kigali Amendment of the Montreal Protocol.

    The changes are not confined to creating new specific provisions for various goods. The amendments also include clarification of texts to ensure uniform application of the nomenclature. For example, there are changes for the clarification and alignment between French and English of the appropriate way to measure wood in the rough for the purposes of subheadings under heading 44.03.

    Given the wide scope of the changes, there are many important changes not mentioned in this short introduction. All interested parties are encourage to read the Recommendation carefully (to be published soon).

    Implementation

    While January 2022 may seem far off, a lot of work needs to be done at WCO, national and regional levels for the timely implementation of the new HS edition. The WCO is currently working on the development of requisite correlation tables between the current 2017 and the new edition of the HS, and on updating the HS publications, such as the Explanatory Notes, the Classification Opinions, the Alphabetical Index and the HS online database.

    Customs administrations and regional economic communities have a huge task to ensure timely implementation of the 2022 HS Edition, as required by the HS Convention.

    They are therefore encouraged to begin the process of preparing for the implementation of HS 2022 in their national Customs tariff or statistical nomenclatures. The WCO will step up its capacity building efforts to assist Members with their implementation.

  • IT ministry organizes cyber security workshop

    IT ministry organizes cyber security workshop

    ISLAMABAD: An awareness workshop on ‘Cyber Security’ was organized by Ministry of Information Technology and Telecommunication along-with National Information Technology Board (NITB) organized on Friday.

    The goal of the event was to highlight the issue of cyber-attacks and how we can protect government’s sensitive data and work towards cyber security as governments around the world are bringing more attention to cybercrimes.

    Federal Secretary Ministry of IT and Telecommunication Shoaib Ahmad Siddiqui, Syed Junaid Imam, Member (IT) MoIT, Syed Shabahat Ali, CEO NITB and Bilal Abbasi, Director (IT) MoIT along-with numerous officials from different Federal ministries/divisions were present at the workshop.

    Speaking on the occasion, Federal Secretary Ministry of IT and Telecommunication Shoaib Ahmad Siddiqui highlighted that it is important for the government to become more vigilant and secure data to avoid any security and data breaches.

    He further added that conventional warfare has been replaced by Cyber warfare and it brings a collective responsibility towards government officials to be prepared against cyber-attacks.

    In the end it was shared that MoIT will be conducting more of such events for policy makers, legislators and other government officials, as cyber security awareness is a key priority by MoIT.