Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Draft MoU for sharing taxation data sent to China

    Draft MoU for sharing taxation data sent to China

    ISLAMABAD: Pakistan has sent draft Memorandum of Understanding (MoU) to China for sharing taxation data between the two countries.

    Federal Board of Revenue (FBR) Chairman Syed Muhammad Shabbar Zaidi on Monday sent the draft Memorandum of Understanding (MoU) on cooperation between FBR and China’s State Administration of Taxation in order to share taxation data between both the countries.

    A statement said that the draft MoU has been sent through a letter addressed to Pakistan’s Ambassador in China Ms Naghmana A. Hashmi.

    In this regard, Pakistan’s Ambassador in China has been authorized to sign the MoU on behalf of FBR.

    The FBR chairman in his letter has stated that the signing of the MoU will enable the Taxation Authorities of both the countries to share data and learn from each other’s best practices.

    The MoU will promote improvement in trade and investment in both countries.

  • FBR notifies revision in exemption regime under sales tax laws

    FBR notifies revision in exemption regime under sales tax laws

    ISLAMABAD: Federal Board of Revenue (FBR) has issued changes brought through Finance Act, 2019 in exemption regime under Sixth Schedule of the Sales Tax Act, 1990.

    Following changes have been made in Table-1 of the Schedule:

    i. Exemptions at the existing serial numbers 2,3, and 72, relating to meat, fish, poultry meat etc. have been amended to clearly provide that these exemptions also apply to products specified thereunder even if these products are packed.

    ii. Under serial number 19, the products of milling industry, as sold in retail packing bearing brand names, have been excluded from purview of exemption, however, wheat and meslin flour shall remain exempt even if so packed or sold under a brand name. Redundant PCT Heading 1102.1000 has also been omitted.

    iii. Serial numbers 36 and 37 pertaining to Gold and Silver, in unworked condition, have been omitted. Gold and Silver have been placed in the 8th schedule and chargeable to sales tax at the reduced rate of 1%. Gold and Silver have also been excluded from the purview of minimum value-addition tax of@ 3% at import stage under Twelfth Schedule.

    iv. The expression “excluding electricity and natural gas” has been added in serial number 52A relating to exemption on goods supplied to specified hospitals. Now, such hospitals are no more eligible for exemption on supplies of electricity and gas.

    v. The exemption at serial number 85, as available to fat filled milk, has been restricted to such milk as is not sold in retail packing under a brand name or a trademark. Such packed and branded fat filled milk now shall be subject to 10% sales tax under Eighth Schedule.

    vi. In view of doing away with the special procedure for steel industry, the exemption available to vessels / ships for breaking at serial number 95 has been omitted. Vessels imported for breaking up are now taxable at 17%. Field formations of Customs should ensure chargeability of sales tax on import of vessels since 1st July, 2019.

    vii. New serial number 151 has been added. This is a transposition of exemption under SRO 1212(I)/2018 which now has been rescinded and which provided exemption on supplies made within the tribal areas. In the transposed form, it allows further exemption on imports of industrial input including plant and machinery imported by industrial units located within tribal areas. These exemptions on imported inputs / plant and machinery shall be available subject to security mechanism specified under this serial.

    viii. Newly added serial 152 provides exemption on supplies of electricity as made to all consumers in tribal areas. However, this exemption shall neither be available to industries established after 31st May, 2018, nor to any steel and ghee /oil industries.

    ix. Through new serial number 153, imports and supplies by manufacturers of steel billets, ingots, ship plates, bars and other long re-rolled profiles, have been exempted. In lieu of this exemption, federal excise duty has been imposed on these items in sales tax mode.

    In Table-2, relating to local supplies, two changes have been made:

    (i) Exemption under serial number 16 shall not be available to ginned cotton, as the same has been subjected reduced rate of 10% in Eighth Schedule, at newly inserted serial number 65 in Table 1.

    (ii) The exemption to cottonseed oil has been provided at serial number 25.

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  • SBP advises public not to share banking information

    SBP advises public not to share banking information

    KARACHI: State Bank of Pakistan (SBP) has advised the public not to share their banking information to fake calls.

    In a statement issued on Monday, the SBP said that it had come to the central bank’s knowledge that fraudsters were attempting to defraud the banking customers by seeking bank account details on the pretext of biometric verification.

    In many cases, this is being done through fake calls by masking the official helpline or registered numbers of banks.

    The receivers apparently believe that the call is genuine or from the bank and share their personal information including bank Account Number, ID, Password, CNIC Number, etc. resulting in loss of funds even during the calls.

    The fraudsters generally impersonate as officials of State Bank of Pakistan, Army Officer or representative of Superior Courts of law, etc. on pretext of biometric verification of accounts.

    In this context, public is advised to immediately contact their banks on their registered numbers/helpline themselves instead of responding the incoming calls and sharing their credentials.

    It is informed that SBP/Banks/Micro Finance Banks do not conduct biometric verification of Banks’ existing customers through telephone calls. If public receive any such call, they may share details of these cases/incidents with law enforcement agencies or SBP helpline at 021-111-727-273 or email at [email protected].

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  • Share market sheds 369 points on disappointing financial results of major scrips

    Share market sheds 369 points on disappointing financial results of major scrips

    KARACHI: The share market ended down by 369 points on Monday following disappointing financial results by many major scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 31,734 points as against 32,103 points showing a decline of 369 points.

    Analysts at Arif Habib Limited said that the market continued trimming down, where the index shed 386 points during the session and ended at -369 points.

    Key results announced today were by Attock Group, which declared results for ATRL, NRL, ACPL and POL. With the exception of POL, all the other companies failed to impress the investors.

    POL’s price appreciated from yesterday’s closing and also resulted in improved volumes. Overall volumes remained poor at 46 million shares, contributed by Cement (7.5 million), Power (7.3 million) and Banks (4.8 million). Among scrips, KEL topped the charts with 6.3 million shares, followed by MLCF (3.7 million).

    Sectors contributing to the performance include Banks (-80 points), Fertilizer (-49 points), Power (-48 points), Cement (-42 points), and O&GMCs (-39 points).

    Volumes declined again from 86.5mn shares to 45.5mn shares (-47 percent DoD). Average traded value also declined by 22 percent to reach US$ 9.4 million as against US$ 12.1 million.

    Stocks that contributed significantly to the volumes include KEL, MLCF, TRG, PIBTL and BOP, which formed 40 percent of total volumes.

    Stocks that contributed positively include KAPCO (+4 points), FATIMA (+3 points), POL (+3 points), AGP (+3 points) and HMB (+3 points). Stocks that contributed negatively include HUBC (-40 points), UBL (-27 points), ENGRO (-27 points), BAFL (-19 points) and PPL (-19 points).

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  • Rupee gains 14 paisas in interbank market

    Rupee gains 14 paisas in interbank market

    KARACHI: The Pak Rupee 14 paisas against dollar on Monday owing to improved sentiments following approval of the US support.

    The rupee ended Rs160.45 to the dollar from last Friday’s closing of Rs160.59 in interbank foreign exchange market.

    The foreign currency market was initiated in the range of Rs160.45 and Rs160.60. The market recorded day high of Rs160.59 and low of Rs160.40 in interbank foreign exchange market.

    Currency experts said that improved sentiments helped the rupee to gain the value. The US administration last week approved support to sale fighter jet to Pakistan after the successful visit of Prime Minister Imran Khan.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs160.00/Rs160.50, the same previous value, in cash ready market.

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  • Non-ATL person to pay 10pc withholding tax for offshore digital service

    Non-ATL person to pay 10pc withholding tax for offshore digital service

    ISLAMABAD: Persons not appearing in the Active Taxpayers’ List (ATL) shall pay 10 percent as withholding tax on payment of fee for offshore digital service to non-resident person under Section 152(1C) of Income Tax Ordinance, 2001.

    The Federal Board of Revenue (FBR) issued withholding tax card for tax year 2020 effective from July 01, 2019. The FBR said that tax shall be deducted on remittance outside Pakistan, of fee for off-shore digital services , chargeable to tax u/s 6, to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan.

    A banking company or financial institution shall collect withholding tax under this section from non-resident persons at the time the amount is actually paid at 5 percent of the gross amount.

    The FBR said that persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 10 percent of the gross amount.

    The FBR said that tax will be deducted from Non-resident on any payment of insurance premium or re-insurance to a non-resident person under Section 52(1AA) of Income Tax Ordinance, 2001 at 5 percent of gross amount by every person making the payments from non-resident person at the time the amount is actually paid.

    The FBR further said that tax will be deducted under Section 152 (1AAA) on payments for advertisement services from non-resident person relaying from outside Pakistan.

    The tax shall be collected by every person making payment non-resident at the time the amount is actually paid. The tax rate shall be 10 percent of the gross amount. Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 20% of the gross amount.

  • FBR issues new withholding sales tax rates on supplies

    FBR issues new withholding sales tax rates on supplies

    ISLAMABAD: Federal Board of Revenue (FBR) has announced new rates of withholding sales tax after abolishing Sales Tax Special Procedure (Withholding) Rules, 2007.

    The FBR said that as Sales Tax Special Procedure (Withholding) Rules, 2007, have been rescinded, the rates of withholding and exclusions for the same have been provided in newly inserted Eleventh Schedule, as provided in amended section 3(7) of Sales Tax Act, 1990, effective from July 01, 2019, as under:

    Table

    S.No.Withholding agentSupplier categoryRate or extent of deduction
    (1)(2)(3)(4)
    1(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

     

    (b) Companies as defined in the Income

    Tax Ordinance, 2001 (XLIX of 2001)

    		Registered personsl/5th of Sales Tax as shown on invoice
    2(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

     

    (b) Companies as defined in the Income

    Tax Ordinance, 2001 (XLIX of 2001)

    		Person registered as a wholesaler, dealer or distributor1/10th of Sales Tax as shown on invoice
    3Federal and provincial government departments; autonomous bodies; and public sector organizationsUnregistered personsWhole of the tax involved or as applicable to

     

    supplies on the basis of gross value of supplies

    4Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)Unregistered persons5% of gross value of supplies
    5Registered persons as recipient of advertisement servicesPerson providing advertisement servicesWhole of sales tax applicable
    6Registered persons purchasing cane molasses.Unregistered personsWhole of sales tax applicable

    The rates for withholding or deduction by the withholding agent shall not be applicable on following goods and supplies:

    (i) Electrical energy;

    (ii) Natural gas;

    (iii) Petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel;

    (iv) Vegetable ghee and cooking oil;

    (v) Telecommunication services;

    (vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;

    (vii) Supplies made by importers who paid value addition tax on such goods at the time of import; and

    (viii)  Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered persons with exception of advertisement services.

  • Weather alert of wind-thunderstorm issued for ports

    Weather alert of wind-thunderstorm issued for ports

    A significant weather alert has been issued for ports and fishermen as the Joint Maritime Information Coordination Center (JMICC) anticipates severe weather conditions on July 29 and 30, 2019. Authorities have been urged to implement precautionary measures to mitigate potential impacts.

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  • Weekly Review: PM visit to US may lure foreign investors

    Weekly Review: PM visit to US may lure foreign investors

    KARACHI: PM’s trip to the US could potentially aid ongoing issues with the FATF which may lure further foreign investment in the country, analysts said.

    Moreover, attractive valuations may also revive momentum at the index. In the immediate term, result season could dictate performance of the scrips.

    The domestic equity bourse remained lackluster throughout the outgoing week. While PM Khan’s successful visit to the US could not generate a sustainable rally at the index, foreign policy appears to be in-check. Albeit, we pin commencement of the result season as key reason behind aforementioned index performance, given weaker. outcomes expected in cyclical sectors such as cement, steel, and automobiles. The market closed at 32,103 points, shedding 356 points / 1.10 percent WoW.

    Sector-wise negative contributions were led by i) Power Generation & Distribution (71 points), ii) Food & Personal Care Products (66 points), iii) Oil & Gas Marketing Companies (49 points), iv) Cement (39 points), and v) Tobacco (27 points). Scrip-wise negative contributions came from HUBC (48 points), ENGRO (47 points), NESTLE (31 points), MARI (31 points) and PAKT (27 points).

    Foreign buying was witnessed this week clocking-in at USD 8.4mn compared to a net buy of USD 6.4mn last week. Buying was witnessed in Commercial Banks (USD 5.6mn) and Cement (USD 2.3mn). On the domestic front, major selling was reported by Mutual Funds (USD 13.4mn) and Companies (USD 1.2mn). Average Volumes settled at 75mn shares (down by 29 percent WoW) while average value traded clocked-in at USD 21mn (down by 13 percent WoW).

    Other major news: i) OGDC makes oil and gas discovery in Sindh, ii) ADB approves USD 50m additional contribution for CGIF, iii) Power tariff stays high on increase in capacity payments, iv) No new tax on bike and rickshaw according to FBR, and v) Banks likely to pay higher tax on income from papers.

  • Imported consumer items to be cleared on declared retail prices: FBR

    Imported consumer items to be cleared on declared retail prices: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has said that the consumers items falling under mandatory retail price print will be assessed at declared retail price at clearance stage instead of determination through customs value.

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