ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued Urdu version of presidential ordinance for Tax Amnesty Scheme – 2019.
The FBR said that the Urdu translated version had been issued for the facilitation of people to understand the scheme and participate/avail proactively.
However, the FBR said that the translated version can not be referred anywhere and English version will be treated as authentic document.
ISLAMABAD: Prime Minister Imran Khan has said that the government is working on a new petroleum policy, which will offer incentives to foreign exploration and production (E&P) companies.
The prime minister said this at a meeting with Chief Executive Officer Kuwait Petroleum Shaikh Nawaf Saud Al-Sabah, along with his delegation, which called on Prime Minister Imran Khan at Prime Minister’s Office on Wednesday.
The prime minister said that in order to capitalize the existing potential of the sector, the fovernment was working on a new petroleum policy offering incentives to foreign exploration and production (E&P) companies and removing impediments in way to undertaking smooth and profitable business ventures.
Minister for Energy Omar Ayub Khan, Minister Energy Punjab Dr. M. Akhtar Malik, Secretary Petroleum Mian Asad Hayauddin and senior officers were also present during the meeting.
Shaikh Nawaf Saud Al-Sabah briefed the Prime Minister about Kuwait Petroleum’s business ventures in Pakistan since 1980s in the area of exploration.
He evinced keen interest in further expanding business activities in the country.
The prime minister welcomed Shaikh Nawaf Saud Al-Sabah and his delegation to Pakistan and assured Government’s continued support to the company in their smooth business operations.
The prime minister highlighted various steps that the present Government has taken for improving ease of doing business and facilitation of foreign investment.
The prime minister observed that exploration remained a neglected area in past.
Imran Khan appreciated company’s contribution towards imparting training to the local manpower in E&P sector.
Minister Energy Punjab Dr. M. Akhtar Malik also briefed the meeting about various initiatives being taken by Punjab Government in Petroleum sector.
ISLAMABAD: Syed Muhammad Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) Wednesday warned industrial and commercial consumers of gas and electricity to get registered with sales tax authorities, otherwise penal action will be initiated from July 01, 2019.
Addressing a press conference, he said that currently there were around 341,174 industrial electricity connection and 7000 industrial gas connections, however compared to this the sales tax registration of industry was just 38,937, which he said was a huge gap.
“It is my request to all industrial consumers to take advantage of the scheme before June 30 and may be it (the scheme) do not remain in the same shape after July 1st,” so the people using industrial utility connections should take advantage, the Chairman added.
He said that there were possibilities that these industrial consumer connections might include some connections that come under cotton industry under law, however, added that there was dire need to check this huge difference.
“It would be our desire that under the special clause placed in Asset Declaration Scheme, the industries falling in the category pay two percent to clear past liabilities,” the chairman added.
He said that after July 1st, the FBR would make necessary legislation to get these industries and manufacturers registered and would also take actions.
He urged the industrialists and manufacturers to take advantage of the Asset Declaration Scheme and clear their past sales tax liabilities by paying just two percent tax till June 30, 2019 or the law would take its due course after the expiry of the data.
“A special clause has been included in the Asset Declaration Scheme, which was not included in it earlier, which is that if anybody is having sales tax liability he or she may clear these by paying just two percent tax,” the Chairman FBR, Muhammad Shabbar Zaidi said while addressing a press conference at FBR house here.
He urged the media to sensitize people on the issue so that those avoiding to clear their past sales tax liabilities might realize this gap and get registered with FBR by taking advantage of the Asset Declaration Scheme.
He said that the FBR would try its best to make it voluntary and do not indulge in harassment, as it wanted to create environment for the businesses.
To a question, the FBR Chairman said that there were around 3.1 million commercial consumers, however added that the strategy on how to get the unregistered consumers to get registered with FBR would be shared with media.
To another questions, the Chairman FBR said that there were over one lack companies registered with the Securities and Exchange Commission of Pakistan (SECP), however just 50,000 were filing their returns.
He said that it was high time for those having industrial connections to get registered with FBR and take benefit of the Tax Declaration Scheme.
It is pertinent to mention here that the government last week had announced Asset Declaration Scheme, providing one more opportunity to all Pakistani citizens to declare and legalize undisclosed assets inside and outside the country by paying just four percent taxes on all assets other than real estate.
The scheme would be applicable till June 30, and all Pakistan citizens, other than those holding public offices or their dependents, would be able to take benefit from it.
The basic purpose of the scheme was to document economy and make the dead assets functional to promote economy by encouraging businessmen to participate in the legal economy.
KARACHI: The stock exchange recovered around 1195 points on Wednesday on the hope of buying through state fund.
The benchmark KSE-100 index closed at 34,637 points as against 33,442 points showing an increase of 1195 points.
Analysts at Arif Habib Limited said that the market is showing signs of a bull run in the wake of the State Fund that will likely buy scrips of State owned listed entities.
On the whole, market shot up by 1256 points during the session, and closed +1195 points. Majority stocks hit upper circuit including index blue chips OGDC, PSO, SNGP, NBP and otherwise traded in green zone throughout the session.
Volumes maintained the healthy stride of 150M plus for the third consecutive session and today crossed 200 million shares mark. Banking sector led the volumes table with 44 million shares, followed by Technology (32 million) and Power (19 million) Sectors.
Among banking sector BOP marked hefty volume of 25 million shares, followed by WTL (20 million) in Technology Sector.
Sectors contributing to the performance include E&P (+269 points), Fertilizer (+219 points), Banks (+216 points), Power (+116 points) and Cement (+96 points).
Volumes increased significantly from 153.6mn shares to 203.5mn shares (+32 percent DoD). Average traded value, however, increased by 1 percent merely to reach US$ 35.2 million as against US$ 34.9 million the other day.
Stocks that contributed significantly to the volumes include BOP, WTL, KEL, PIBTL and UNITY, which formed 40 percent of total volumes.
Stocks that contributed positively include OGDC (+93 points), PPL (+93 points), HUBC (+73 points), ENGRO (+66 points) and HBL (+65 points). Stocks that contributed negatively include BAFL (-8 points), INDU (-5 points), JLICL (-4 points), ICI (-2 points) and COLG (-2 points).
KARACHI – The Pakistani Rupee displayed resilience on Wednesday, maintaining its level after a series of continuous declines against the US Dollar in the interbank foreign exchange market.
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KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed concerns over recent significant rise in key policy rate by State Bank of Pakistan (SBP).
In a statement on Wednesday Engr. Daroo Khan Achakzai, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) showed his serious concern over the hiking of policy rate by another 150 basis points in view of prevailing inflation, devaluation of currency and twin deficit in Pakistan.
He added that SBP continues to operate a tight monetary policy despite the clear evidences that this policy strangulates investment and hampered the economic activities in Pakistan in Pakistan.
He underlined that the IMF bailout package will further create burden on poor segment of society in terms of rising utility prices which will ultimately increase inflation in the economy.
At present, every Pakistani possess a debt of one lac fifty nine thousands rupees.
The President FPCCI termed the contractionary monetary policy as an anti-investment policy which has declined the economic activities in the first ten month of the current fiscal year due to declining of large scale manufacturing and service sector.
He indicated that 12.25 percent policy rate is very high compared to regional economies like India 6.0 percent, China 4.35 percent, Sri Lanka 9.0 percent, Thailand 1.75 percent, Indonesia 6.5 percent, Malaysia 3.00 percent etc.
While commenting on the devaluation of currency, he stated that the rising of exchange rate will increases the prices of imports particularly petroleum products which comprises 30 to 35 percent import bill of Pakistan.
He suggested the government to intervene in the economy for currency stabilization and control of inflation. He said that the present inflation rate is 7.0 percent which is high compared to last year same period 3.8 percent; but this inflation is cost push inflation which can’t be controlled through demand management policies.
The major cause of rising inflation in the country is high cost of doing business particularly utility prices, increase in the prices of industrial inputs and shortage of essential items of daily necessity.
The Government should focus to increase the demand for credit by declining interest rates and make easy access to finance. Globally, the aim of monetary policy is to protect the value of the currency in co-ordination with the fiscal policy in order to achieve the objectives of macro-economic stability with constraining inflation and expansion of private sector investment, he added.
The President FPCCI further stated that the government should create its own fiscal space for financing its expenditures instead of borrowing from SBP and other institutions. During the first ten month of year, there was an expansion in private sector credit, but is largely attributed to working capital due to rising of input prices.
This private sector credit should be expanded to agriculture and industrial sector which are showing declining growth trend, he suggested.
KARACHI: The government has been proposed to make Federal Board of Revenue (FBR) as an autonomous body on similar line as State Bank of Pakistan.
The Overseas Chamber of Commerce and Industry (OICCI) in its budget proposals for 2019/2020 suggested restructuring of FBR as an independent governing body.
It suggested that FBR should be made an autonomous body on similar lines as State Bank of Pakistan, SECP, and Internal Revenue Services (IRS) of United States.
FBR should operate and work in a corporate governance structure with a Board of Directors, vested with powers like that of the Boards of Public listed companies.
The Chairman of FBR and fifty percent of the Board members may be nominated by the government (Ministries of Finance, Law, and Commerce) and, the remaining fifty percent Board members should be nominated by bodies like OICCI, PBC and ICAP.
A transparent accountability system in tax administration should be introduced, and reasonable independence and empowerment given to various operational positions.
The external audit of FBR should be done annually, by an independent international audit firm whose report should be presented and fully discussed in the Tax Policy Board meeting.
There should also an Internal Audit function within the FBR for an effective ongoing internal audit reporting directly to the independent members of the Board nominated by the Trade bodies.
Apart from revenue collection a key function of the FBR should be to address coordination issues between federal and provincial revenue authorities, with monthly meetings to ensure ease of doing business for taxpayers.
KARACHI: The import of motor cars sharply declined by 45 percent during first ten months of current fiscal year owing to restriction imposed of duty and tax payment through foreign currency account and verification of remittances through banks.
According to officials statistics made available to PkRevenue.com on Tuesday, the import of cars in completely built unit (CBU) was at $213.37 million during July – April 2018/2019 as compared with $388.835 million in the corresponding period of the last fiscal year.
The ministry of commerce through SRO 52(I)/2019 dated January 15, 2019 imposed the restriction of payment of duty and taxes through foreign remittances.
The SRO stated: “All vehicles in new/used condition to be imported under transfer of residence, personal baggage or under gift scheme, the duty and taxes shall be paid out of foreign exchange arranged by Pakistan Nationals themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency, as under,
a. the remittance for payment of duties and taxes shall originate from the account of Pakistani national sending the vehicle from abroad; and
b. the remittance shall either be received in the account of Pakistani national sending the vehicle from abroad or, in case, his account is non-existent or inoperative, in the account of his family.”
The customs sources said that the besides restrictions of the ministry of commerce the import of cars was also declined due to restriction on non-filers of income tax in registration with provincial registration authorities.
Through Finance Act, 2018 the government imposed ban on non-filers for registering both imported and locally assembled cars. The government, however, lifted the ban on non-filers through Finance Supplementary (Second Amendment) Act, 2019 only for locally assembled cars.
KARACHI: Federal Board of Revenue (FBR) has been advised to reduce income tax rates for banking companies in line with general corporate tax rates.
The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020, said that the banking sector tax rates have not been reduced in line with the general corporate tax rates.
Furthermore, Finance Supplementary (Second Amendment) Bill 2019, proposed to again amend the First Schedule to the Income Tax Ordinance 2001, whereby, Super Tax of 4 percent is applicable on banks from tax year 2018 to tax year 2021.
The banks, in compliance with the prevailing taxation regime have already closed the tax year 2018 (accounting year 2017) and income tax returns have already been duly filed/assessed.
As a result of the proposed abovementioned retrospective application from tax year 2018 (accounting year 2017), banks would now have to effectively pay super tax for two years or 8 percent instead of 4 percent in tax year 2019 i.e. 4 percent already paid in advance for tax year 2019 along with retrospective charge of 4 percent now being proposed for tax year 2018.
The OICCI suggested that the tax rates of the banking sector should be aligned with other sectors.
It is recommended, application of super tax on tax year 2018 should be removed to avoid the double charge of super tax in tax year 2019.
Furthermore, it is requested that the same overall relief on super tax, granted to other industries, is also provided to the banking sector as well.
KARACHI: Pakistan Tax Bar Association (PTBA) has urged the tax authorities to give benefits to persons opting out of presumptive tax regime (PTR).
In its proposals for budget 2019/2020, the apex tax bar said that through Finance Act, 2012 positive steps were taken for opting out of presumptive tax regime in respect of sale of goods, import and export of goods, subject to certain conditions, which were highly appreciated.
The Finance Act, 2014, however reversed the amendments and in place thereof inserted new clauses (56B), (56C), (56D), (56E), (56F) and (56G); whereby certain persons may opt out of the final tax regime by filing the return of income along with accounts and documents as may be prescribed subject to the condition that their minimum tax liability under normal tax regime shall not be less than the tax already collected/deducted at the applicable rates of the respective Sections.
The Finance Act, 2014 also inserted certain new clauses on similar lines. Under these clauses, the option to opt out of the final tax regime was provided to a person who provides services of stitching, dying, printing, embroidery, washing, sizing and weaving to exporters or an export house.
Furthermore, petrol pump operators and persons earning commission or brokerage are also provided with such an option.
Under the new clauses introduced by the Finance Act, 2014, the tax liability of persons is higher than the tax liability they were required to pay under the initiative introduced vide the Finance Act, 2012.
“Furthermore, it should be noted that as per the current position of the law, the taxpayers would, in practice, not obtain any financial benefit by opting out of the presumptive regime and would instead be required to face the additional burdens and risks of tax audits,” the tax bar said.
The PTBA said that the options introduced by the Finance Act, 2012 should be reintroduced or alternatively, as a first step the corporate sector is given option to opt out from presumptive taxation.
The proposed modification may help starting the journey to tax real income instead of taxation under the PTR reduces the additional burdens imposed on the corporate sector.