ISLAMABAD: Section 7C and Section 7D of Income Tax Ordinance, 2001 deal with tax on income of builders and developers.
(more…)Author: Faisal Shahnawaz
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Tax on profit on debt under Section 7B
The Federal Board of Revenue (FBR) has introduced a pivotal addition to the Income Tax Ordinance, 2001, with the incorporation of Section 7B. This section specifically addresses the taxation of profit on debt derived by individuals or non-corporate entities.
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Tax on shipping, air transport income of non-residents
ISLAMABAD: Section 7 of Income Tax Ordinance, 2001 deals with tax chargeability on shipping, air transport income of non-residents.
The Federal Board of Revenue (FBR) issued the updated Income Tax Ordinance, 2001. The Ordinance incorporated amendments brought through Finance Act, 2021.
Section 7: Tax on shipping and air transport income of a non-resident person.— (1) Subject to this Ordinance, a tax shall be imposed, at the rate specified in Division V of Part I of the First Schedule, on every non-resident person carrying on the business of operating ships or aircrafts as the owner or charterer thereof in respect of –
(a) the gross amount received or receivable (whether in or out of Pakistan) for the carriage of passengers, livestock, mail or goods embarked in Pakistan; and
(b) the gross amount received or receivable in Pakistan for the carriage of passengers, livestock, mail or goods embarked outside Pakistan.
(2) The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the relevant rate of tax to the gross amount referred to in sub-section (1).
(3) This section shall not apply to any amounts exempt from tax under this Ordinance.
Section 7A. Tax on shipping of a resident person.—(1) In the case of any resident person engaged in the business of shipping, a presumptive income tax shall be charged in the following manner, namely:—
(a) ships and all floating crafts including tugs, dredgers, survey vessels and other specialized craft purchased or bare-boat chartered and flying Pakistan flag shall pay tonnage tax of an amount equivalent to one US $ per gross registered tonnage per annum;
(b) ships, vessels and all floating crafts including tugs, dredgers, survey vessels and other specialized craft not registered in Pakistan and hired under any charter other than bare-boat charter shall pay tonnage tax of an amount equivalent to fifteen US cents per ton of gross registered tonnage per chartered voyage provided that such tax shall not exceed one US $ per ton of gross registered tonnage per annum:
Explanation.—For the purpose of this section, the expression “equivalent amount” means the rupee equivalent of a US dollar according to the exchange rate prevalent on the first day of December in the case of a company and the first day of September in other cases in the relevant assessment year; and
(c) A Pakistan resident ship owning company registered with the Securities and Exchange Commission of Pakistan after the 15th day of November, 2019 and having its own sea worthy vessel registered under Pakistan Flag shall pay tonnage tax of an amount equivalent to seventy five US Cents per ton of gross registered tonnage per annum.
(2) The provisions of this section shall not be applicable after the 30thJune, 2030.”
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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SRB extends date for sales tax payment, return filing
The Sindh Revenue Board (SRB) announced on Monday an extension of the deadline for sales tax payment and the filing of returns for June 2021.
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Mari Petroleum signs exploration agreement
KARACHI: Mari Petroleum Company Limited (MPCL) on Monday announced that it has executed a farm-in agreement.
The company signed the with MOL Pakistan Oil and Gas Co. B.V. for acquisition of significant working interest in Margala Block. The company signed the deal to collaborate resources and efforts to jointly perform exploration activities.
The Block is situated in the Potwar Basin in the vicinity of Islamabad. The assignment of working interest shall be subject to Government approval.
This farm-in is part ofMPCL’s aggressive strategy not only to increase its exploration acreage, reserves replacement ratio and maximizing shareholder’s value. it will also meet Country’s increasing energy demand from indigenous resources and lowering the burden of imported fuels on national economy.
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Section 4B of Income Tax Ordinance, 2001: super tax
ISLAMABAD: The Section 4B of the Income Tax Ordinance, 2001 deals with super tax for rehabilitation of temporarily displaced persons. The Federal Board of Revenue (FBR) issued the updated Income Tax Ordinance, 2001.
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Section 4 of Income Tax Ordinance, 2001: tax on taxable income
ISLAMABAD: The Federal Board of Revenue (FBR) issued the updated Income Tax Ordinance, 2001 after incorporating amendments brought through Finance Act, 2021. The Section 4 of the Income Tax Ordinance, 2001 deals with tax on taxable income.
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Tax auditor awarded major penalty for misconduct
In a recent development, the Federal Board of Revenue (FBR) has awarded with a major penalty to a tax auditor, Sardar Abdul Rab Nashtar, Assistant Director (Audit) of the Inland Revenue Service (IRS).
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ECC approves hike in prices of sugar, wheat flour, edible ghee
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved increase in prices of three essential items.
Shaukat Tarin, Federal Minister for Finance and Revenue chaired the meeting.
Ministry of Industries and Production presented a summary regarding extension of the Prime Minister’s Relief Package-2020. The package has provided subsidies on five essential commodities from July 15, 2021 to September 30, 2021. The extension has been provided till the Enterprise Resource Planning (ERP) system becomes fully operational.
Moreover, the ECC also approved the revision in prices of three essential commodities namely Atta (20 kg bag) to Rs. 950, Ghee (per kg) to Rs. 260 and Sugar (per kg) to Rs. 85 respectively. The increase was granted because of increasing gap between the subsidized prices and the prevailing market prices.
The committee approved revision in prices of three essential commodities to rationalize provision of subsidies by the Utility Stores Corporation (USC).
Federal Minister for National Food Security and Research Fakhar Imam, Federal Minister for Energy Hammad Azhar, SAPM on Finance and Revenue Dr. Waqar Masood, SAPM on Power and Petroleum Tabish Gauhar, SAPM on Youth Affairs Usman Dar, Secretary Finance Division, Secretary Communication, Secretary M/o Industries and Production, Governor SBP, Chairman PTA and other senior officers participated in the meeting.
The ECC considered and approved a summary regarding the elimination of documents attestation fee for goods imported into Pakistan from Kenya as this Non-Tariff Measure (NTM). The decision by the Committee would facilitate trade between the two countries and enhance Pakistan’s market share in the region.
The ECC approved a summary regarding non-cash settlement for power sector re-lent loans against subsidies payable by the government amounting Rs.116 billion.
The ECC approved “Kamyab Pakistan Program”. A flagship program which shall extend micro-loans to entrepreneurs and farmers under “Kamyab Karobar” and “Kamyab Kissan” schemes respectively.
The program shall also provide low cost housing loans through NAPHDA. The Kamyab Pakistan Program also includes ongoing skill development program for educational and vocational training under the title “Kamyab Hunarmand”.
The Kamyab Pakistan Program is aimed at extending loans to 04 million households at the lowest strata, as registered with the National Socio Economic Registry (NSER) of Ehsaas. Loans worth Rs.0.5 million, Rs.0.150 million and Rs.0.2 million through Micro-Finance Providers for Kamyab Karobar and Kamyab Kissan at 0% mark up will be provided. The third component of the scheme is introduction of a new tier in Naya Pakistan Low Cost Housing Scheme wherein loans of Rs.2.7 million (for NAPHDA) and Rs.2 million (for Non-NAPHDA) projects will be given at subsidized rates.
The salient features of the Kamyab Pakistan Program include loan size of Rs.150,000 (per crop) for purchase of agricultural inputs. The commutative disbursement under the program would be Rs.1.6 billion over the period of 03 years. It shall benefit 30,00,000 families.
The ECC commended all concerned for working out such a detailed program aimed at “bottom-up approach” for reducing poverty as envisaged by the Prime Minister.
The Finance Minister stated that the consultative process was followed in working out modalities of the Kamyab Pakistan Program ensuring that all relevant stakeholders are on board and micro-loans shall be disbursed as per the given criteria.
The ECC also considered and approved the Draft Policy Directives related to Auction of Next Generation Mobile Services (NGMS) in Azad Jammu & Kashmir (AJK) as submitted by the Ministry of Information Technology and Telecommunication before the Committee. This is the first time that the NGMS will be auctioned in AJK and it will improve mobile broadband services in the region.
Moreover, ECC also decided that for the payment of the Auctioned licence fee, the method in-vogue in the earlier auction processes will be followed. Ministry of Maritime Affairs presented a summary regarding award of Engineering Consultancy Service contract for up-gradation of Port Qasim Authority (PQA) amounting to Rs.86.6 million.
The ECC approved the execution of the project. ECC allowed Post Qasim Authority, Karachi Port Trust and Gwadar Port Authority Boards to transfer their Marine assets to the Pakistan Marine and Shipping Services Company Private Limited (PMSSC), a subsidiary of Pakistan National Shipping Corporation.
The maximum rates to be charged by the Pakistan Marine & Shipping Services Company (PMSSC) from the Public Sector ports & harbours shall be determined from time to time by Ministry of Maritime Affairs through a notification in official gazette.
The Ministry of National Food Security and Research (M/o NFS&R) presented a summary regarding procurement of 200,000 cotton bales by TCP to promote cotton production and bring stability in the domestic market.
The ECC also approved formation of Cotton Price Review Committee (CPRC) with a mandate to review market price and propose intervention at fortnightly basis.
The ECC also approved a summary by the M/o Industries and Production for importing 200,000 metric tons of sugar to build strategic reserves and minimize the role of speculative elements in the domestic market. In case of need more reserves will be built through import, the ECC decided.
ECC approved the amendment in its earlier decision dated 19-02-2021 regarding the “Prime Minister’s” fiscal package for Agriculture in the wake of COVID-19 Kharif”. The package offered subsidy on DAP@1500Rs/acre for cotton and rice crops, during the Kharif Season 2021. Now according to the amendment, the farmers can avail subsidy on any phosphatic fertilizer according to their choice.
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Stock market gains 137 points in mixed trading
KARACHI: The stock market increased by 137 points on Thursday in mixed trading during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 47,628 points from previous day’s closing of 47,491 points, showing an increase of 137 points.
Analysts at Arif Habib Limited said that after consolidating in the past couple of sessions, the Index regained confidence today and added a total of 246 points, on the back of OGDC, PSO and otherwise the Technology sector.
Profit booking brought the index down by the end of session, closing +137 points.
Cement, Fertilizer and Refinery sectors bore selling pressure, whereas Steel, Chemical and Banking sector stocks contributed positively to the index. Flat steel players (ASL & ISL) increased prices today, which prompted an uptick in both stock prices.
Among scrips, WTL topped the volumes with 50.6 million shares, followed by KEL (38.9 million) and TPL (36.1 million).
Sectors contributing to the performance include E&P (+41 points), Technology (+37 points) Banks (+26 points), O&GMCs (+19 points) and Vanaspati (+15 points).
Volumes declined slightly from 508.2 million shares to 506.3 million shares (-0.5 per cent DoD). Average traded value declined by 4 per cent to reach US$ 97 million as against US$ 101 million.
Stocks that contributed significantly to the volumes include WTL, KEL, TPL, PIBTL and TPLP, which formed 36 per cent of total volumes.
Stocks that contributed positively to the index include OGDC (+28 points), TRG (+26 points), BAFL (+16 points), UNITY (+15 points) and PSO (+13 points). Stocks that contributed negatively include PAKT (-21 points), PSX (-15 points), HBL (-9 points), FFC (-8 points) and NML (-6 points).