Pkrevenue.com

Author: Faisal Shahnawaz

  • KCCI praises Imran Khan for providing relief to tax evaders through amnesty scheme

    KCCI praises Imran Khan for providing relief to tax evaders through amnesty scheme

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has praised Prime Minister Imran Khan for giving opportunity to tax evaders to document their black money at very low tax rates.

    KCCI President Junaid Esmail Makda stressed that in order to make the amnesty scheme successful, the government will have to ensure complete secrecy and confidentiality of the declarants’ data at any cost otherwise, they will not be able to achieve the desired results.

    He said that this amnesty scheme must not end up like the last one in which the highly classified data of those individuals who availed the previous amnesty scheme was shared with several government agencies including Federal Investigation Agency (FIA) and National Accountability Bureau (NAB) against the commitment to keep declarants’ info confidential.

    Referring to government’s assurance to keep this scheme easy to understand, he hoped that the amnesty scheme has been devised in such a manner that number of queries are kept minimal as it is a well-known fact that individuals will be reluctant to respond to excessive queries seeking details about the source of income and other such questions because of fears of getting into any kind of trouble in future.

    “The business community will be more than happy to become part of the documented economy but the government has to support them by protecting them from any kind of harassment from agencies/ institutions”, he added.

    He further stated that although the government has provided the opportunity to become part of the scheme until June 30 but this scheme must be extended for a longer period.

    After seeing the failure of previous amnesty scheme in which harassment by serving notices was widely witnessed, many individuals will be reluctant to declare their assets hence, the government must extend it and also has to take confidence building measures in due course to regain the trust of the masses.

    “After seeing some success stories of those individuals who avail this year’s amnesty scheme, I am sure many others will also come forward to benefit from the amnesty scheme so it must be made available for a longer period to tap such individuals”, he added.

    He was fairly optimistic that the scheme will help the government in bringing undocumented persons, assets and income into the documented sector. The scheme has the potential to bring in macroeconomic and fiscal stability in the economy.

    President KCCI further stated that this scheme offers a lucrative opportunity to pay just 4 percent for legalizing Benami Assets within the country and 6 percent for assets outside the country while 3 percent tax for undeclared sales which was a good offer for whitening the black money.

    While complimenting Chairman FBR Shabbar Zaidi for taking pro-business steps, Junaid Makda hoped that he would continue to do so throughout his tenure which would help in restoring the confidence of business community to a great extent and that in turn would lead to economic prosperity for the entire country.

    He advised Chairman FBR to formulate practical policies to increase the tax net and catch tax evaders in order to strengthen the country’s economy.

    The loyal taxpayers are being overburdened every year to achieve the revenue targets whereas those outside the tax net continue to enjoy all the luxuries of life without contributing a single rupee to the national exchequer, he opined, adding that FBR has been claiming of having details of all such tax evaders since many years but unfortunately no action has been taken so far to strictly deal with them.

  • Prime Minister takes notice of rupee depreciation

    Prime Minister takes notice of rupee depreciation

    KARACHI: Prime Minister Imran Khan took notice of recent depreciation of rupee in the open market. In this regard the prime minister met a delegation of Exchange Companies Association of Pakistan (ECAP) on Wednesday at Prime Minister House.

    The ECAP delegation was led by Sheikh Allaudin, Malik Bostan, and Sheikh Mureed. Director General FIA, Director General IB, Chairman Federal Board of Revenue and Governor State Bank of Pakistan (SBP) were also present at the meeting.

    The government made it crystal clear that it will take strict action against Exchange Companies, which involve in creating artificial shortage of the foreign currency, a member ECAP said.

    The meeting agreed on exchange rate and the government warned of serious consequences in case of deviation.

    Dollar rate agreed upon are Buying – 143.50 and selling 144.00

    Saudi Riyal buying and selling at 38.20 / 38.35

    UAE Dirham buying and selling 39.05 / 39.20

    Strict compliance has been insisted upon

    ECAP will not stand by any company diverging from these set rates, a statement said.

    ECAP will not stand with the companies running dual sets of rates or avoiding receipting, it added.

  • Stock market gains 406 points on amnesty scheme launching

    Stock market gains 406 points on amnesty scheme launching

    KARACHI: The stock exchange gained 406 points on Wednesday owing to introduction of tax amnesty scheme by the government for undeclared assets.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,291 points as against 33,885 points showing an increase of 406 points.

    Analysts at Arif Habib Limited said that the market made a positive move today, courtesy of Amnesty Scheme as well as news of successful drilling at Kekra 1.

    Resultantly, E&P scrips performed well and Investors in general took positive bets on Fertilizer, Cement, Banks and Steel. Cement sector topped the volumes table with 19.4 million shares, followed by Banks (14 million) and Power (11.9 million).

    Investors interest in HUBC kept the price up consecutively since yesterday and similar interest was seen in KEL, which also topped the volumes. OGDC, PPL and POL nonetheless, became the star performers today.

    Sectors contributing to the performance include E&P (+208 points), Power (+62 points), Fertilizer (+55 points), O&GMCs (+44 points), Pharma (+23 points), Food (-37 points) Banks (-18 points).

    Volumes increased slightly from 105.7 million shares to 110.9 million shares (+5 percent DoD). Average traded value also increased by 4 percent to reach US$ 31.5 million as against US$ 30.3 million.

    Stocks that contributed significantly to the volumes include KEL, MLCF, BOP, OGDC and LOTCHEM, which formed 33 percent of total volumes.

    Stocks that contributed positively include PPL (+94 points), POL (+52 points), OGDC (+43 points), HUBC (+42 points) and EFERT (+30 points). Stocks that contributed negatively include NESTLE (-37 points), HBL (-26 points), MCB (-13 points), DGKC (-10 points) and ICI (-6 points).

  • Rupee remains unchanged against dollar

    Rupee remains unchanged against dollar

    In Karachi on Wednesday, the Pakistani Rupee showcased resilience against the US Dollar, maintaining its stability in the interbank foreign exchange market. The exchange rate remained unchanged at Rs141.40, echoing the rate observed on the preceding day.

    (more…)
  • Offshore drilling for hydrocarbons near Karachi coast completes; samples sent for lab test

    Offshore drilling for hydrocarbons near Karachi coast completes; samples sent for lab test

    KARACHI: The offshore drilling near Karachi coast has been completed. The operators have found hydrocarbons and sent for laboratory test. The operators are hopeful of huge deposits of hydrocarbons, sources said on Wednesday.

    Offshore drilling, through a joint venture of four oil giants, near Karachi coast on Indus G-Block (Kekra-1) has been completed after four months.

    The process spudded the Kekra-1 well to the depth of 5,450 meters.

    A joint venture of ExxonMobil, ENI, Oil and Gas Development Company, and Pakistan Petroleum Limited are conducting the drill stem test (DST) to determine the real size of the oil and gas reserves in the Kekra-1 well, located around 280 km away from Karachi.

    The sources said that the samples had been sent for laboratory tests. On the positive results the country would have one of the huge deposits in the world.

    Pakistan’s import bill could be decreased by billions of dollars annually, if the total reservoir quantity is huge.

    The group of multinational companies had begun offshore drilling on 11th January 2019. The drilling was expected to be completed in March 2019 as per initial estimation. ENI ensured the completion of offshore drilling despite critical situations faced during the drilling process.

  • PTBA recommends outsourcing potential taxpayers profiling to data mining company

    PTBA recommends outsourcing potential taxpayers profiling to data mining company

    KARACHI: Pakistan Tax Bar Association (PTBA) has suggested the Federal Board of Revenue (FBR) to outsource the preparation of profiling potential taxpayers to a data mining company for broadening of tax base.

    The PTBA in its tax proposals for budget 2019/2020 suggested the tax machinery that the assignment of preparation of profile of potential taxpayers/registered person be out sourced to a data mining company in line with the responsibility of collection of tax on capital gains given to the National Clearing Company of Pakistan.

    “This company should only be allowed to collect the following information and present the potential taxpayer’s profile to the FBR’s BTB department to take appropriate action in accordance with law.”

    The PTBA said that Pakistan was facing a challenge with regards to the widening of the current tax base to prevent tax-revenue erosion.

    Although in the current year number of Active Taxpayer has improved; however since many years, Pakistan’s registered tax base has been more or less stable at less than 1 percent of the total population.

    Over the last few years, the concept of filers and non-filers has been introduced in order to encourage increased filing of returns of income.

    However, such amendments have not been able to increase the tax base by many folds as envisaged.

    On the other hand has increased the burden of withholding agents by prescribing different withholding rates based on the Active Taxpayers List without achieving any significant progress inroads on the actual tax compliance rates.

    In reality bulk of the increased cost due to higher tax rates for non-filer, has been passed on by the unregistered persons to the end consumer by enhancing cost of goods /services to gross up the impact of higher withholding.

    The PTBA also proposed that a new team comprising of young IT expert, Accountants and Tax experts should be hired for BTB department.

    A task force comprising of independent professionals and top officials be formed to monitor the work assigned to the data mining company and ensure that the BTB department operates efficiently and effectively to ensure the progress in broadening of tax base activity by FBR.

    The effective enforcement should be made in accordance with Section 114 of the ITO. The government and FBR on its part should ensure that the relevant provisions of law are implemented in letter and spirit without any distinction on the basis of cast, creed, color and clout to achieve the goal of broadening the tax base.

    A complete profile consisting of CNIC, Firm/Company registration-wise of the taxpayer may be prepared generated by maintaining a data base of all the:-

    Owners and holders/allottee of the industrial, commercial, residential and agriculture properties;

    Private motor vehicles;

    Club membership;

    International traveling;

    Utilities;

    credit cards;

    investment in bank deposits;

    Investment in national saving schemes;

    investments in Capital Market; and

    Major expenditure (i.e. Rs.300,000/- & above) incurred on account of hospitalization, parties at hotels and schooling of dependents.

    Submission of quarterly statements by the Registrars & Housing Societies for registration/transfer of Immovable Property (Industrial Commercial, Residential & Agricultural), Motor Vehicle Registration Authorities, Clubs (Private & Public), Credit Card issuing authorities, Central Depository Company, National Clearing Company of Pakistan, large scale private hospitals, hotels & schools and Financial Institutions distributing profit more than statutory taxable limit or granted commercial loans, should be made mandatory.

    Jurisdiction other than Company should, for some time, be reverted strictly to geographical basis to avoid duplication and slippages of potential tax filers.

    Tax credit at the rate of 5% be restored and provided to those taxpayers whose 90% Sales and Purchase of Goods are from persons who are registered as Sales Tax and Income Tax taxpayers.

    The PTBA said that the proposed amendments would result in increased visibility of potential taxpayers and incentivize registration with the tax authorities without increasing the burden on existing taxpayers.

  • Amnesty Scheme 2019 unveiled; 4pc tax for documenting hidden assets; applicable till June 30

    Amnesty Scheme 2019 unveiled; 4pc tax for documenting hidden assets; applicable till June 30

    ISLAMABAD: The federal government finally announced tax amnesty scheme 2019 for people having undisclosed assets to become part of documented economy. The scheme has been announced at four percent of tax to declared hidden assets other than immovable properties.

    The scheme is available for Pakistani citizens who have evaded taxes other than public office holders.

    The scheme will be applicable till June 30, 2019, Advisor to Prime Minister Finance, Dr Abdul Hafeez Shaikh said at a press conference while announcing the scheme after its formal approval by the federal cabinet on Tuesday.

    The advisor was accompanied by Special Assistant to the Prime Minister on Information and Broadcasting, Dr Firdous Ashiq Awan, State Minister for Revenues, Hammad Azhar and Federal Board of Revenue Chairman Syed Shabbar Zaidi.

    “Basic purpose of the scheme is not to generate revenue but to document economy and make the dead assets functional to promote economy,” Shaikh said.

    The advisor urged the business community to participate in this amnesty scheme to document their concealed assets.

    Inviting all such people who had their undeclared assets to take benefit from this scheme, the Advisor said this was the last chance as the government had already imposed the Benami Law under which all such benami properties would be confiscated by the government.

    He said efforts have been made to make the scheme easy in understanding as well as implementing.

    He said all assets were included in the scheme inside or outside Pakistan. All assets other than real estate, would have to pay four percent to get these legalized.

    In case of real estate, it would be evaluated at 1.5-time on existing FBR value, to bring it to market value he said.

    For Pakistanis living abroad, the advisor said that they can pay four percent to legalize their money subject to bringing cash or other kind into Pakistan.

    Otherwise they would have to pay 6 percent to legalize their assets, he added.

    Minister of State for Revenue Hammad Azhar said there was a lot of difference between the current and previous amnesty schemes as for the first time there was a condition for all asset declarer to become tax filer besides giving option to all such people to revise their balance sheet in their tax returns.

  • IR officers barred from suspending registration, raiding business premises of tax defaulters

    IR officers barred from suspending registration, raiding business premises of tax defaulters

    ISLAMABAD: The offices of Inland Revenue have been barred from taking harsh action against tax defaulters such as suspending registration and raiding business premises on suspicions of tax evasion.

    The newly appointed chairman of Federal Board of Revenue (FBR) Shabbar Zaidi issued more directives on Tuesday to restrict the IR officers for using discretionary powers.

    The federal government appointed the chairman from private sector for enhancing revenue collection through strengthening operation side. The policy side of taxation matters has already been with the ministry of finance.

    The chairman soon after assuming the charge issued directives to the field offices of the FBR that no bank account would be attached of a taxpayer without informing 24 hours prior taking any action. Further obtaining permission from FBR chairman has been made mandatory for freezing any bank account.

    The chairman on Tuesday issued more instructions to the field offices of Inland Revenue, which stated: “There will be no suspension from active taxpayers list unless there is personal interaction with CEO/owner of the business 24 hours before suspension, list of all cases of suspension after suspension will be sent to chairman FBR and Member IR operations with reasons of suspension and evidence of personal interaction as discussed above.”

    The chairman further directed: “There will no be no raid or any premises of any existing taxpayer without prior approval of Member IR Operations and Chairman. If there are evidences of economic transactions which are chargeable to tax and the organization/entity is not a tax registered person then officer of that jurisdiction will report it to the Member IR Operations and Chairman FBR who will provide necessary direction for future course of action.”

  • Federal cabinet approves money whitening scheme

    Federal cabinet approves money whitening scheme

    ISLAMABAD: The federal cabinet on Tuesday approved a scheme to whiten money through declaration of concealed / hidden assets.

    Prime Minister Imran Khan chaired the meeting of the federal cabinet. The cabinet approved the asset Declaration Scheme, 2019 besides discussing a 17 point agenda.

    Attorney General for Pakistan made a detailed presentation to Cabinet about the progress made in cases pending in the International Courts/Arbitration forums and suggested future course of action.

    The Cabinet was informed that from 2008 to 2018, the government of Pakistan has paid an amount of $100 million in lawyers’ fee in various cases while another $10 million is to be paid this year in lawyers’ fee.

    It was decided that legal advisors will be appointed in the main ministries including Ministry of Power, Petroleum, Communications, etc.

    Besides, measures would be taken to strengthen the office of the Attorney General to enhance its capacity to vet contracts/agreement.

    The cabinet discussed at length the prices of essential items The Secretary Planning inform the Cabinet about the measures being taking to eliminate middle man and providing relief to consumers.

    The Cabinet approved renewal of Regular Public Transport, Charter and Aerial Work Licenses of M/s PIACL.

    The Cabinet approved constitution of Board of Directors of PTDC. The Cabinet ratified Trade Agreement between the Governments of the Islamic Republic of Pakistan and the People’s Democratic of Algeria.

    The cabinet approved Memorandum of Understanding between National School of Public Policy (NSPP) and National Management Institute (NMI), Cairo.

    The Cabinet approved Property Tax Exemption in respect of Benevolent Fund Building, Zero Point Islamabad.

    The Cabinet approved appointment of Director on Board Directors of Deposit Protection Corporation.

    Zafar Mirza, Special Assistant to the Prime Minister on National Health Services briefed the Cabinet about progress made in reduction of Maximum Retail Prices of various drugs resulting in saving of Rs. 09 billion to consumers.

    The Cabinet approved salary package for Members of the Information Commission. The Cabinet approved secondment of Major General Omer Ahmed Bokhari, as DG Pakistan Ranger (Sindh).

    The Cabinet approved appointment of Ms. Tasneem Sultana, District and Session Judge as Judge, Special Court (Control of Narcotics Substances-I), Karachi. Appointment of Judge, Special Court (Control of Narcotics Substances-), Quetta was also approved.

    The cabinet granted exemption of duties/taxes on equipment donated by China. The equipment will be used for anti-narcotics efforts.

    The cabinet approved recruitment Rules of the post of Chairman of Pakistan Academy of Letters, Islamabad. The Cabinet approved policy on provision of Consular Assistance to detained and imprisoned Pakistanis abroad.

  • FPCCI invites FBR chairman for budget proposals discussions

    FPCCI invites FBR chairman for budget proposals discussions

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has invited Shabbar Zaidi, Chairman of Federal Board of Revenue (FBR) to discuss budget proposals.

    A statement issued on Tuesday said that the President FPCCI Engr. Daroo Khan Achakzai alongwith Abdul Waheed Sheikh, Ijaz Khan Abbasi, Qurban Ali and Shireen Arshad Khan, Vice Presidents of FPCCI visited the office of Shabbar Zaidi congratulating him on assuming the charge of Chairman FBR.

    During the meeting the President FPCCI discussed various measures and proposals particularly for enhancement in number of tax payers and to increase their confidence level to achieve the set targets of revenues.

    Engr. Daroo Khan Achakzai further said that misuse of powers by the tax authorities is creating trust deficit and lack of confidence.

    The FPCCI Chief hailed the prompt decisions taken by the FBR’s Chairman in facilitating and providing relief to the taxpayers such as “Suspension of raid on any premises of any existing taxpayer without prior approval of Member IR – Operation and Chairman FBR”.

    Moreover, the FPCCI President also appreciated the Chairman FBR for not suspending any Active Taxpayer from Active Taxpayer List unless there is personal interaction with the assessee 24 hours before suspension and monitoring himself the list of all cases of suspension. The President of FPCCI also lauded Shabbar Zaidi, Chairman, FBR for not freezing bank account without prior intimation and notice to the bank account holder. The FBR Chief further said that the real estate is fast growing sector of the economy and FBR will devise various reforms. The tax amnesty scheme is also under process and will be announced soon, he stated.

    The President FPCCI Engr. Daroo Khan Achakzai invited the Chairman FBR to visit FPCCI Headquarter at Karachi and its Capital Office Islamabad to discuss FPCCI’s budget proposals and to share vision to revamp the tax system and machinery which is now the need of hour to be shifted in effective automated system to facilitate the taxpayers.

    The Chairman FBR agreed to visit the FPCCI soon to get feedback and first-hand information from FPCCI members and apprised them of FBR’s stance / point of view.