Author: Mrs. Anjum Shahnawaz

Threshold amount to purchase immovable properties removed for withholding tax collection: FBR

ISLAMABAD: Federal Board of Revenue (FBR) has removed threshold amount to purchase of immovable properties for collection of withholding tax.

The FBR issued Income Tax Circular No. 09 dated July 30, 2019 and said that through the Finance Act, 2019, the rate of tax on purchase of immovable property under Section 236K of Income Tax Ordinance, 2001 has been reduced to 1 percent from 2 percent.

Prior to the Finance Act, 2019, no tax was collected under Section 236K on purchase of property where the value of property up to Rs4 million.

“Through the Finance Act, 2019, the threshold of Rs4 million for collection of tax has been removed. Now tax on purchase of property will be collected on all transactions irrespective of the value of immovable property,” the FBR said.

The FBR said that tax under section 236C is collected from the seller or transfer at the rate of one percent of the gross amount of consideration received.

Prior to the Finance Act 2019, this tax was not collected if the property was held for a period exceeding three years.

Through the Finance Act, 2019, the period of three years has been extended to five years which means that tax under section 236C shall be collected if the immovable property is held for a period up to five years.

The FBR further explained that as per section 236W read with clause (c) of sub-section (4) of Section 111, every person responsible for registering, recording or attesting transfer of any immovable property was required to collect tax at the rate of 3 percent of the difference between the FBR value of property and the value recorded by the authority registering or attesting the transfer in cases where FBR value was greater than the recorded value.

So by paying three percent on the difference, the purchaser was not required to explain the source of difference of amount between FBR value and the recorded value.

Through Finance Act, 2019, section 236W as well as clause (c) of sub-section (4) of Section 111 have been omitted. Consequently, the purchasers are not required to explain the source of investment of property up to the FBR value of property whereas previously such purchasers were required to explain the source of investment to the extent of recorded value of property.

July 31, 2019
Meezan Bank, Indus Motors sign MoU for priority vehicle delivery

KARACHI: Meezan Bank – Pakistan’s leading Islamic bank – has recently signed a Memorandum of Understanding with Indus Motor Company Ltd (IMC) – one of the largest automotive manufacturers and distributors in Pakistan, to provide priority delivery of all Toyota variants to Meezan Bank’s customers.

The signing ceremony took place in Karachi and was attended by Arshad Majeed – Group Head Consumer Finance, Meezan Bank and Abdul Rab – Senior General Manager, Indus Motor Company Limited along with their respective team members.

Under this agreement, Meezan Bank will provide additional value-added services of priority processing as well as fast track delivery of Toyota vehicles to customers of Meezan Car Ijarah, Pakistan’s first Riba-free car financing product.

Arshad Majeed while speaking at the occasion said, “Meezan Bank is the leading player in Pakistan’s Islamic Auto Financing industry. We are hopeful that our alliance with Indus Motor Company Ltd will further facilitate our clients by providing them with the best services across the country.”

Meezan Bank is the leading Islamic Bank of Pakistan and the 7th largest Bank in the country. Meezan Bank has consistently been recognized as the Best Islamic Bank in Pakistan by numerous local and international institutions, which is a testimony of the Bank’s commitment to excellence. The Bank has also been recognized as the Best Bank – 2018 by Pakistan Banking Awards, the most prestigious awards in the country’s banking sector.

The Bank provides a comprehensive range of Islamic banking products and services through a retail banking network of over 680 in 190 cities supported by a countrywide network of over 700 ATMs, Visa & MasterCard Debit cards, a 24/7 Call Center, Internet Banking and Mobile Banking facility.

The VIS Credit Rating Company Limited (Formerly JCR-VIS Credit Rating Company Limited), an affiliate of Japan Credit Rating Agency, Japan has reaffirmed the Bank’s long-term entity rating of AA+ (Double A Plus) and short-term rating at A1+ (A One Plus) with stable outlook. The rating indicates sound performance indicators of the Bank.

July 31, 2019
ECC approves 10 percent regulatory duty on cotton import

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved imposition of 10 percent regulatory duty on import of cotton.
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July 31, 2019

FBR streamlines anti-benami regime to stop white collar crimes

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued official note to streamline Anti-Benami Regime to stop white collar crimes.

The FBR said that Benami Transactions, entailing the phenomenon of Benami moveable and immoveable properties, Bank A/Cs, Luxury Vehicles, off shore investments and stocks & shares is one of the biggest economic and financial threats, currently camouflaging the rampant corruption in our society, deadly confronting Pakistan’s taxation system and practically compromising the economic viability of the country.

Due to non existence of a special Law and Rules on Benami all Anti-corruption agencies have so far failed in tracing and documenting the real/beneficial owners and criminals went scot free.

In order to combat the menace of Benami and take the spirit of accountability forward Federal Government has operationalized Benami Transaction (Prohibition), Act, 2017, which was dormant since February, 2017.

Federal Board of Revenue has been assigned the administration and implementation of this new stream of Financial Crime Investigation & Enforcement.

This office order is aimed at streamlining of newly introduced Anti-Benami Regime in Pakistan.

I. Organizational Framework: Anti Benami Regime Pakistan.

FBR, as the parent/administering department envisages two distinct streams of functions for this White Collar Crime Investigation Agency: independent Authorities and supporting Administrative Oversight.

Both streams shall co-exist, though mutually exclusive yet complementing each other. For the legal functions, to be conducted by different Anti-Benami Authorities, their operational independence is fully protected under Benami Transaction (Prohibition) Act, 2017.

However FBR’s administrative facilitation, financial support and organizational oversight are essential for sustainable field operations, development and strengthening of this newly launched regime.

Authorities

Core Functions

Support Functions

Initiating Officer (BS-18)

-Initiation of Anti-Benami Proceedings

-Attachment of Benami Properties -Inquiries and Investigations

-Filing of Reference to Adjudication Authority.

-Filing of Appeals

-Enforcement of various provisions of said Act.

-Examination and Analysis of

complaints and references by

different agencies

– Development of Research &

Analysis Cells

-Data Archiving

-Services of Notices

-Litigation Management

Approving Authority (BS-20)

-Highest Legal Authority at Anti-Benami Field formations

-Supervisory/Administrative authority at Benami Zones

-Granting approval of all major legal and Enforcement functions

-Inherent powers u/s 16

-Confiscation of benami properties

-Administrative and Financial head of Anti-Benami Zone

-Focal office for all correspondence with FBR and other Anti-Benami authorities

-Addressing genuine grievances and complaints

-Performance Management and Reporting

-Reposing officer in the cases of Initiating officers and Administrators

-Linkages with FBR portal and other economic & financial data bases

Administrator (BS-17)

-Management of Attached properties -Management of Confiscated properties

-Possession of benami properties

-Confiscation of benami properties

-Disposal of Confiscated properties

-Ware Housing in the cases of attached/confiscated movable properties

-Intelligence & Vigilance function of benami Zones

-Spear heading all enforcement activities

-Maintenance of Discipline and motivation in field workforce

Adjudicating Authorities (BS-21/22)

-Adjudication of References filed by Initiating Officers

-Inquiries and investigation

-Attachment powers

-Statutory powers to add or delete any person arrayed as accused or property labeled as benami

– Passing Confiscation Order

-Constitution of Adjudication benches

-Administration of Officers and

Employees of Adjudication Authority

-Advice to the Federal Government

on Adjudication related matters

-Development of Case Studies

-Critical References filed by Benami Zones

-Administration of justice

-Periodical Review of Law, Rules and patterns of crime

A. Authorities: Benami Transaction (Prohibition) Act, 2017 provides detailed description and powers & functions of various authorities. FBR has already notified the jurisdiction and appointment of field authorities at Islamabad, Lahore and Karachi.

In addition to their statutory functions, FBR deems it necessary to assigns field Benami authorities some support functions as well.

These support functions would help in realizing the desired results of this legislation and seamless implementation of this new regime.

B. Administrative Oversight: Director General-Anti Benami Initiative (DG- ABI)

In order to facilitate the Authorities and to ensure efficient and effective implementation of Anti-Benami law the office of DG-ABI is being raised to ensure smooth and effective implementation and enforcement of Anti-Benami Act, 2017. Without any interference in their respective legal domains, this administrative structure would provide the following support to Anti-Benami Zones.

i) DG-ABI would act as FBR’s focal office for proper implementation of Benami Transaction (Prohibition) Act, 2017. DG-ABI would act as a bridge between Anti-Benami Zones and FBR, between Zones and Adjudication Authorities and among all the Anti-Benami Zones as well.

ii) Establishment of Administrative hierarchy for the newly created Anti-benami Zones at Islamabad, Lahore and Karachi.

iii) Logistic Support, Financial Back up & autonomy and capacity building for Anti-Benami Zones.

iv) Development of uniform operational SOPs for transparent functioning of field authorities.

v) Contact point for all external agencies interacting with FBR in Benami related matters. Receipt, analysis and dissemination of benami related complaints, data, information and reference from all external Quarters.

vi) Development of linkages between Anti-benami authorities and FBR’s portal and external Data Bases. Central Data Bank on Benami.

vii) Quantitative Performance Evaluation of Anti-Benami Zones.

Qualitative Evaluation shall be made only after obtaining input from the concerned Adjudication Authority.

viii) Addressing all jurisdiction related issues in the light of FBR’s relevant notifications.

ix) Recommendations for review and amendments in Law, Rules and Procedure, covering Anti-Benami Regime

x) Personnel Management and Litigation

II. Directorate General-ABI: The Organizational structure

i) Directorate General-ABI would comprise a Director General, Director HQs and three Commissioners, Anti Benami Zones at Islamabad, Lahore and Karachi, responsible for their notified jurisdictions.

ii) Directorate General-ABI and its formations would be manned by officers of IRS and staffed by IR Department

III. Reporting Mechanism
i) Administrators and Initiating Officers shall report to their respective Commissioners, Anti-Benami Zones.

ii) Commissioners, Anti Benami Zones would be independent in their Legal jurisdictions. For all administrative matters they will be reporting to DG-ABI Islamabad.

iii) DG-ABI would report to the National Coordinator for implementation of Benami Transactions (Prohibition) Act, 2017.

July 31, 2019

Stock market rebounds to gain 280 points on positive sentiments

KARACHI: The stock market rebounded to gain 280 points on Wednesday owing to positive sentiments prevailed during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 31,938 points as against 31,658ts showing an increase of 280 points.

Analysts at Arif Habib Limited said that the market rebounded finally on the last day of July.

Positive sentiments were seen across the board and were led by activity in cement and steel sectors.

Among Autos, HCAR and GHNI, and Steel, ISL, hit upper circuits. E&P Sector saw positivity since start of the session on the back of higher crude oil prices.

Across the board positivity can be attributed to the expectation of timid inflation and reversal of SBP’s policy rate in the short run.

Besides, last day of the rollover week contributed to the positive investor sentiment. Cement sector led the volumes table with 14.5 million shares, followed by Technology (9 million) and Engineering (8.7 million). Among scrips, MLCF took the lead with 7.1 million shares, followed by TRG (5.7 million) and ISL (4.3 million).

Sectors contributing to the performance include E&P (+69 points), Fertilizer (+63 points), Banks (+35 points), O&GMCs (+33 points), and Cement (+24 points).

Volumes increase from 51.3 million shares to 70.1 million shares (+37 percent DoD). Average traded value also increased by 24 percent to reach US$ 16.4 million as against US$ 13.2 million.

Stocks that contributed significantly to the volumes include MLCF, TRG, ISL, KEL and WTL, which formed 34 percent of total volumes.

Stocks that contributed positively include ENGRO (+34 points), PPL (+34 points), HBL (+20 points), POL (+19 points). Stocks that contributed negatively include PAKT (-31 points), AICL (-7 points), INDU (-5 points), MCB (-4 points) and CHCC (-2 points).

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July 31, 2019
Rupee gains 46 paisas in interbank market

The Pak Rupee made notable progress against the US Dollar on Wednesday, appreciating by 46 paisas amid improved inflows of remittances sent by overseas Pakistanis. This positive movement reflects the currency’s resilience in the interbank foreign exchange market.
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July 31, 2019
FBR extends date for filing withholding statements to August 20

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday extended the date for filing withholding statements by 20 days to August 20, 2019 from July 31, 2019.

In this regard the FBR issued Income Tax Circular No. 10 to allow extension for filing withholding statements under Section 165 of Income Tax Ordinance, 2001.

July 31, 2019
FBR promotes 30 appraising officers of customs department

ISLAMABAD: Federal Board of Revenue (FBR) has promoted 30 appraising officers to the post of principal appraisers (BS-16) with immediate effect and until further orders, a notification said on Wednesday.

According to notification made available to PkRevenue.com, the following Appraising Officer of Pakistan Customs Department are promoted to the post of Principal Appraiser (BS-16)with immediate effect and until further orders:

Following officers have been promoted to the post of principal officers:

01. Junaid Malik, MCC, Appraisement (East), Karachi

02. Shahrukh Akhlaq Siddiquie, MCC, Appraisement (East), Karach

03. MuhammadNazir Khan, MCC, Gilgit-Baltistan

04. Syed Masoom Raza, MCC, (JIAP), Karachi

05. MuhammadNadeem Butt, MCC, Appraisement (West), Karachi

06. Ghulam Yasin Sabri, MCC, PMBQ, Karachi

07. Altaf Ali Chandio, MCC, Preventive, Karachi

08. Ashique Ali Memon, MCC, Appraisement (East), Karachi

09. Mohammad Yaqoob, MCC, Appraisement (West), Karachi

10. Vaqas Jilani, MCC, Preventive, Lahore

11. Malik Naveed Anwar, Dte. of Post Clearance Audit, Lahore

12. Adnan Khurshid Cheema, MCC, Appraisement (East), Karachi

13. Azeem Manzoor, MCC, Islamabad (He will actualize promotion on return from Ex-Pakistan leave).

14. Saifuddin Khan, MCC, Appraisement, Lahore

15. Muhammad Iftikhar Hussain, MCC, Appraisement (East), Karachi

16. Tariq Aziz S/o Abdul Aziz, MCC, Appraisement (West), Karachi

17. Ms. Nudrat Nawaz, Dte.Gen. of PCA, Islamabad

18. Amir Nasir Ali Khan, MCC, Appraisement (East), Karachi

19. Sarfraz Bangulzai, MCC, Appraisement (East), Karachi

20. Amjad Iqbal, MCC, Appraisement (West), Karachi

21. Raja Waseem Ahmad, MCC, PMBQ, Karachi

22. Zafar Shabbir, MCC, Appraisement (East), Karachi

23. Imtiaz Hussain Khan, Dte. Gen of Valuation, Karachi

24. Farooq Ahmad, MCC, Appraisement (West), Karachi

25. Abdul Hameed, MCC, (Preventive), Lahore

26. Muhammad Afzal, MCC, (Preventive), Lahore

27. Tabasum Shahzad, Dte. of Post Clearance Audit, Lahore

28. Muhammad Ejaz Cheema,Dte. of Intelligence & Investigation (Customs), Lahore

29. Muhammad Yousaf Ansari, MCC, Appraisement, Lahore

30. Ghulam Nabi Zafar, Dte. of Internal Audit(Customs), Lahore

The FBR said that their promotion will take effect from the date of their joining, subject to the condition that no disciplinary proceedings/enquiry is pending against them.

The officers will be on probation for a period of one year, extendable for further period, not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall deem to be held until further order

The officers already drawing Performance Allowance equal to 100 percent of basic pay will continue to draw it on their promotion.

July 31, 2019
Persons not appearing in ATL will pay 100 percent increased withholding tax rate: FBR

KARACHI: Persons whose names are not appearing in the Active Taxpayers List (ATL) will be subjected to hundred percent increased rate of withholding tax, Federal Board of Revenue (FBR) said in a circular issued to explain changes made in Income Tax Ordinance, 2001 through Finance Act, 2019.

The FBR issued Circular No. 19 of 2019 and said that prior to Finance Act, 2019 a concept of non-filer existed in the Ordinance whereby higher tax rates of withholding were prescribed for persons who were non-filers.

Such non-filers could claim adjustment of the higher tax collected at the time of filing of income tax returns. The aim was to compel the non-filers to file their returns of income. “However, it was observed that the non-filers, even though subjected to higher withholding rates, still had a propensity not to file their returns,” the FBR said.

This proved detrimental to exercise of expansion or tax base. This was due to the absence of an explicit provision specifying a standard procedure for action against such persons.

Through Finance Act, 2019 the concept of non-filers has been done away with and a new concept regarding persons not appearing in the active taxpayers list has been introduced. This concept is a m ore paradigm shift from the erstwhile non-filer higher tax regime in that it not only penalizes those persons not appearing in the ATL but also introduces an effective mechanism for enforcing returns from such persons.

In this regard a new section 100BA to Income Tax Ordinance, 2001 has been introduced which provides that collection or deduction of advance income tax, computation of income and tax payable thereon shall be determined in accordance with the rules in the newly introduced ‘The Tenth Schedule’ which envisages the entire path to be adopted by the Inland Revenue Department to enforce returns from persons who make financial transactions yet choose not to file their returns of income.

The FBR said that the persons whose names are not appearing in the ATL will be subjected to 100 percent increased tax rate.

The FBR further said that where a withholding agent is of the opinion that 100 percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish a notice to the commissioner having jurisdiction over withholding agent setting out –

a. The name, CNIC or NTN and address of the person not appearing in the ATL

b. The nature and amount of the transaction on which tax is required to be collected or deducted; and

c. Reason on the basis of which it is considered that the person was not required to file return or statement, as the case may be.

July 31, 2019
Unexplained foreign remittances will be subject to tax: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that unexplained foreign remittances will be subject to income tax.
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July 30, 2019