Pkrevenue.com

Author: Faisal Shahnawaz

  • FBR plans prizes to encourage public take invoices from restaurants, hotels

    FBR plans prizes to encourage public take invoices from restaurants, hotels

    ISLAMABAD: Federal Board of Revenue (FBR) is planning to introduce prize scheme through draw against invoices of restaurants submitted by customers.

    Sources in FBR on Monday said that the plan was under consideration after identification of huge tax evasion by restaurants in Islamabad Capital Territory.

    The sources said that the FBR would announce different prizes through a draw of invoices. The purpose of this prize scheme is to encourage people to take their invoices for food purchased from restaurants and hotels.

    Few months back the FBR installed Restaurants Information Management System (RIMS) at top restaurants and hotels located in Islamabad to monitor their sales for collection of sales tax on services.

    The RIMS is installed at the restaurants and directly connected with FBR online system for real-time data sharing of sales invoices.

    However, it was identified that the most of the restaurants were found in suppressing sales through switching off the online system. The FBR sources said that it was detected that the restaurants were declaring less than half of their sales.

    The FBR has launched penal action against non-compliant restaurants.

    On the other side the owners of restaurants and hotels had announced shut down protest. However, this protest was called back after discussion with State Minister Hammad Azhar a day earlier.

    The owners of hotels and restaurants would again hold talks with FBR officials today to resolve the matter.

  • Ghandhara Nissan declares 44 percent decline in net profit for nine-month period

    Ghandhara Nissan declares 44 percent decline in net profit for nine-month period

    KARACHI: Ghandhara Nissan Limited, the assembler of light commercial and heavy vehicles in Pakistan, has posted significant decline in net profit by 44 percent for nine-month period ended March 31, 2019.

    The company submitted its finance results for July – March 2018/2019 to Pakistan Stock Exchange (PSX) on Monday.

    The company declared Rs135.92 million profit after tax for the period as compared with Rs242.85 million for the corresponding period of the last fiscal year.

    The earnings per share also fell to Rs2.38 for the period under review as compared with Rs4.91 in the same quarter of the last fiscal year.

    The revenue off the company was stagnant at Rs1.7 billion for the first nine months of the current fiscal year as compared with Rs1.74 billion in the same period of the last fiscal year.

    After excluding the cost of sales the gross profit of the company was at Rs300.89 million as against Rs358.95 million in last year.

    The profit before taxation of the company stood at Rs178.84 million for the nine-month period ended March 31, 2019 as compared with Rs316.82 million in the same period of the last fiscal year.

    The profit after tax for the third quarter (January – March) 2019 was sharply declined by 85 percent to Rs6.87 million as compared with Rs45.8 million declared for the same quarter of the last year.

  • Sales Tax Act 1990: three years imprisonment for persons fail to get registration

    Sales Tax Act 1990: three years imprisonment for persons fail to get registration

    KARACHI: Persons making taxable supplies but failed to get registration with tax department then such persons are liable to three years imprisonment, which may be extendable.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the fines and penalties had been prescribed for persons deliberately violated the laws.

    According to the law, any person who is required to apply for registration under this Act fails to make an application for registration before making taxable supplies.

    Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of tax involved, whichever is higher:

    Provided that such person who is required to get himself registered under this Act, fails to get registered within sixty days of the commencement of taxable activity, he shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the amount of tax involved, or with both.

    Any person who fails to maintain records required under this Act or the rules made there under.

    Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of tax involved, whichever is higher.

    Where a registered person who, without any reasonable cause, in non compliance with the provisions of section 25, –

    (a) fails to produce the record on receipt of first notice;

    (b) fails to produce the record on receipt of second notice; and

    (c) fails to produce the record on receipt of third notice.

    Then such person shall pay a penalty of five thousand rupees;

    such person shall pay a penalty of ten thousand rupees; and

    such person shall pay a penalty of fifty thousand rupees.

    Any person who fails to furnish the information required by the Board through a notification issued under sub-section (5) of section 26.

    Such person shall pay a penalty of ten thousand rupees.

  • SBP to expedite payment license issuance to FinTech companies

    SBP to expedite payment license issuance to FinTech companies

    KARACHI: State Bank of Pakistan (SBP) will expedite issuance of payment licenses to FinTech companies in order to accelerate financial inclusion program.

    A report on “Roadmap for Stability and Growth” issued by Finance Ministry, regarding financial inclusion program, stated that SBP to expedite issuance of Payment licenses to Fintech companies with established customer base; development of Micro Payment Gateway (MPG) for retail payments; facilitate expansion of national merchant integration into mobile payments and commence operationalization of Asaan Mobile Account (AMA) Scheme.

    It said that much remains to be done on financial inclusion. As of 2015, merely 16 percent of the adult population had a bank account, with account ownership for women standing at a dismal 11 percent, whereas a large segment of faith-sensitive population remained voluntarily excluded.

    Financing to priority sectors such as agriculture and housing remained constrained, with SMEs claiming a minuscule share.

    Moreover, regional disparities increased over time.

    The National Financial Inclusion Strategy (NFIS), developed and adopted by the government in 2015, aimed at achieving inclusive economic growth through enhanced access to finance and deposit base, promotion of small and medium enterprises, easy and affordable access to finance to farmers, facilitation in low cost housing finance and provision of Shariah-compliant banking solutions.

    Digitization of payments across the country borders is a priority of the Government and the following targets have been set for achievement by 2023:

    Enhance usage of Digital Payments (65 million active digital transaction accounts, with gender segregation of 20 million accounts by Women).

    By digitizing government payments and receipts, automation of CDNS branches, and digitization of services provided by Pakistan Post the Government san kick start digitization of payments.

    Fiscal concessions may be offered on mobile phone duties (< Rs 8k), and sales tax for user charges for Data be refunded into subscriber account monthly by Telephone companies, against Government refunds, or suitable alternative method. To oversee progressive digitization of government payments and to coordinate regulatory enabling, the Government may consider institutionalizing centralized responsibility under a Chief Digital Officer at the Ministry of Finance. It would be necessary to hire a market professional for this function.

    • Enhance Deposit Base (Deposit-to-GDP ratio to 55 percent)

    • Promote SME Finance (Extend finance to 700,000 SMEs; 17 percent of the private sector credit)

    • Increase Agricultural Finance (Serve 6 million farmers through digitalized solutions; enhance annual disbursement to Rs1.8 trillion)

    • Enhance share of Islamic Banking (25 percent of the banking industry; increase branches of Islamic banks to 30 percent of the banking industry)

  • FBR identifies retailers taking undue benefits of present registration requirement

    FBR identifies retailers taking undue benefits of present registration requirement

    KARACHI: Federal Board of Revenue (FBR) has identified that large number of retailers are suppressing electricity consumption to avoid mandatory registration.

    A tax unit in Karachi in its budget proposals for fiscal year 2019/2020, asked the FBR Headquarters to review the present regime of sales tax registration for retailers as they were taking undue advantage.

    The tax unit said that presently retailers are dealt for registration under Sales Tax Special Procedure 2007, Chapter–II, Rule 4 & 6, a retailer operating as a unit of a national or international chain of stores and other retailers paying sales tax through electricity bills.

    Before this, retailers were dealt for registration under Sales Tax Rule 2006, Chapter –I, Rule 4 (b) which is reproduced as under (omitted by SRO 494(I) 2015 dated 30-06-2015).

    “A retailer whose value of supplies, in any period during the last twelve months exceeds five million rupees”.

    At present retailers are taking benefits of this change and having turnover more than ten million are not liable to register and paying a meager amount in electric bills.

    Retailers used generators, solar energy and other sources and maintain the level of electric bills not exceeding the amount of Rs 600000/- for last twelve months and through payment of 5 percent on less than Rs20,000 electricity bill and 7.5 percent on monthly bill greater than Rs.20,000.

    The FBR has been urged that retailers having turnover more than ten million needs to be included in Rule 4 of Sales Tax Special Procedure 2007, Chapter –II, to enhance the net work of Sales Tax registration.

  • Hafeez Shaikh reviews proposed amnesty scheme

    Hafeez Shaikh reviews proposed amnesty scheme

    ISLAMABAD: Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance, Revenue and Economic Affairs on Sunday reviewed the proposed tax amnesty scheme with officials of Federal Board of Revenue (FBR).

    A statement said that the adviser to PM on Finance, Revenue and Economic Affairs reviewed the proposed Assets Declaration Scheme – 2019 in detail with FBR.

    Discussion focused on the scope and the features of the scheme.

    The adviser instructed FBR to fine tune the scheme to make it simple to understand and easy to implement.

    He also emphasized that the objective of the scheme should be to make the economy more tax compliant and documented.

  • Car import plunges by 80 percent on payment in foreign exchange condition

    Car import plunges by 80 percent on payment in foreign exchange condition

    KARACHI: The import of completely built unit (CBU) cars has sharply declined by 80 percent in March 2019 owing to mandatory requirement of paying duty and taxes through foreign exchange.

    According to Pakistan Bureau of Statistics (PBS) the import of motor cars fell 80 percent to $6.14 million in March 2019 when compared with $30.5 million in the same month of last year.

    It is worth mentioning here that the ministry of commerce issued SRO 52(I)/2019 dated January 15, 2019 which stated that 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 Pakistani nationals themselves or local recipient supported by bank enchashment certificate showing conversion of foreign remittances to local currency.

    The payment through foreign exchange should be:

    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 the Pakistani national sending the vehicle from abroad or, in case, his account is non-existent or inoperative, in the account of his family.

    The import data of motor vehicles issued by Pakistan Bureau of Statistics (PBS) revealed that motor cars worth $209 million were brought into the country during July – March 2018/2019 as compared with $359.56 million in the same period of the last fiscal year.

    The car import also fell due restrictions on non-filers for registering the imported vehicles.

  • Essential items’ prices inflate for three consecutive weeks in April

    Essential items’ prices inflate for three consecutive weeks in April

    The prices of essential commodities have risen for the third consecutive week this month, signaling high headline inflation for April 2019. According to data released by the Pakistan Bureau of Statistics (PBS), the Sensitive Price Indicator (SPI) has consistently increased in the weeks ending April 4, 11, and 18, reflecting a challenging trend for consumers.

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  • Sales Tax Act 1990: FBR may appoint special panels for audit

    Sales Tax Act 1990: FBR may appoint special panels for audit

    KARACHI: Federal Board of Revenue (FBR) has been empowered under sales tax law to appoint special audit panels for conducting audit of any registered person.

    The updated Sales Tax Act, 1990 issued by the FBR, the Section 32A explains the powers of the revenue body for appointment of special audit panels.

    Section 32A: Audit by Special Audit Panels

    Sub-Section (1): The Board may appoint as many special audit panels as may be necessary, comprising two or more members from the following, –

    (a) an officer or officers of Inland Revenue;

    (b) a firm of chartered accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961);

    (b) a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966); or

    (d) any other person as directed by the Board,

    to conduct audit of a registered person or persons, including audit of refund claims and forensic audit and the scope of such audit shall be determined by the Board or the Commissioner Inland Revenue on a case-to-case basis. In addition, the Board may, where it considers appropriate, also get such audit conducted jointly with similar audits being conducted by provincial administrations of sales tax on services.

    Sub-Section (2): Notwithstanding that records of a registered person have been audited by an officer appointed under section 30, the Board or a Commissioner may direct special audit panel appointed under sub-section (1) to audit the records of any registered person.

    Sub-Section (3): Every member of special audit panel appointed under sub-section (1), shall have the powers of an officer of Inland Revenue under sections 25, 37 and 38.

    Sub-Section (4): Each special audit panel shall be headed by a chairman who shall be an officer of Inland Revenue.

    Sub-Section (5): If any one member of the special audit panel, other than the chairman, is absent from conducting an audit, the proceedings of the audit may continue and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such absence.

    Sub-Section (6): The Board may prescribe rules in respect of constitution, procedure and working of special audit panel.

  • FTO takes suo moto notice in concealing income in garb of agriculture tax, Iranian oil sale

    FTO takes suo moto notice in concealing income in garb of agriculture tax, Iranian oil sale

    ISLAMABAD: Federal Tax Ombudsman (FTO) has taken suo moto notice and initiated investigation in open sale of Iranian oil in Balochistan and tax evasion in the garb of agriculture tax.

    The annual report 2018 issued by the office of FTO, stated that during the year the FTO proactively invoked powers to take action on own motion notices.

    It said that own motion investigation was initiated in the phenomenon of open sale of Iranian petroleum products in Balochistan at the petrol pumps. Proceedings were in progress, it added.

    Another own motion investigation was started in the phenomenon of tax evasion in the garb of agriculture tax. Since long, a large number of taxpayers have been showing a substantial portion of their income as agriculture income.

    “As tax on agriculture income was a provincial subject, so they were paying income tax to Federal Board of Revenue, on the income declared other than agriculture sources.”

    “While, at the same time they were not paying agriculture tax to the provinces,” the FTO report said, adding that on pointation by the FTO, the FBR had started sending notices to the defaulters.

    The FTO in another own motion investigation of a case of smuggling of mobile phones, mis-declared as LED lights, and cleared through green channel of WeBOC system, was undertaken as a suo-moto case and suitable recommendations were made.