Author: Faisal Shahnawaz

Prices of Petrol, HSD increased by Rs6/liter

ISLAMABAD: The government has increased prices of petroleum products up to Rs6 per liter for the month of April 2019.

The prices of petrol and diesel have been increased by Rs6 per liter and prices of kerosene oil and light diesel oil by Rs3 per liter.

The price of diesel prices has been inflated from Rs111.43 to Rs117. 43 per litre, petrol from Rs92.89 to 98.89 per litre, LDO from Rs77. 54 to Rs80.54 per litre and kerosene from Rs86. 31 to Rs89.31 per litre.

Oil and Gas Regulatory Authority (OGRA) in its summary had proposed that the price of high speed diesel be increased by Rs11. 17 per litre (10 per cent) and petrol by Rs11.98 per litre (12.8 per cent) for April.

March 31, 2019
FBR establishes directorate for taking action against undeclared offshore assets

ISLAMABAD: Federal Board of Revenue (FBR) has established Directorate General of International Tax Operations to initiate legal proceedings in undeclared offshore assets by Pakistanis.

The FBR issued notification to set up the directorate on March 29, 2019. The directorate will have head office in Islamabad and its subordinate offices will be at Lahore, Peshawar, Multan, Karachi, Quetta.

The directorate was introduced through Finance Supplementary (Second Amendment) Act, 2019 by inserting Section 230E to Income Tax Ordinance, 2001.

The functions and powers of the directorate general of international tax operations would be:

a. receive and send information from other jurisdictions under spontaneous, automatic and on demand exchange of information under exchange of information agreements.

b. Levy and recover tax by passing an assessment order under section 123(1A) in case of undeclared offshore assets and incomes.

c. Receive, transmit and exchange country by country reports of the jurisdictions that are parties to international agreements with Pakistan.

d. Conduct transfer pricing audit in cases selected for such audit by the directorate genera of international tax operations.

March 31, 2019
FBR first time receives over 1.8 million income tax returns

ISLAMABAD: Federal Board of Revenue (FBR) has received over 1.8 million income tax returns for tax year 2018, a statement said on Sunday.

“The FBR for the first time in its history has crossed the mark of 1,800,000 Income Tax Return filers for Tax year 2018,” it said.

FBR is committed to broadening the Tax Base to truly make it a self-reliant country.

FBR will continue with its efforts of creating awareness about the importance of paying taxes not only as a civic duty but also for the growth of the economy.

The institution is devoted to facilitating the public in helping to not only fulfill their tax obligations but also to create an enabling environment that fosters economic growth.

The institution is also geared to act against those found guilty of not fulfilling their tax obligations.

FBR could not have achieved this landmark without the cooperation of our tax paying public.

Together with your support we can truly make the dream of a vibrant Pakistan a distinct reality.

March 31, 2019
FBR extends annual return filing date up to April 30

The Federal Board of Revenue (FBR) has announced an extension for the deadline to file income tax returns for the tax year 2018. In Income Tax Circular No. 03, issued on Sunday, the FBR has moved the deadline from March 31, 2019, to April 30, 2019. This marks the fourth extension granted for the filing of tax returns for the specified year.
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March 31, 2019
Income tax return filing may be allowed for a day or two

KARACHI: The income tax return filing may continue for next one or two days as last two days were on non-working days.

The FBR through Income Tax Circular No. 02 on March 15, 2019 extended the last date for filing annual returns for tax year 2018 up to March 31, 2019.

However, the last date is falling on Sunday and FBR had not arranged facility for making payment through banks.

Previously, the FBR planned to open the offices on March 29 and 30 to facilitate the taxpayers in making payment of duty and taxes.

However, State Bank of Pakistan issued a circular for facilitating payment by banks and NIFT on March 30.

According to tax experts the last date would be automatically moved to next date if the last date is falling on holiday under Section 10 of General Clauses Act, 1897.

Therefore, people would be allowed to file income tax returns on the next date of date filing automatically, if FBR does not further extend the date.

Previously, the last date of filing income tax returns was December 15, 2018, which was non-working day or weekend then the FBR allowed the return filing for another day.

Following is the press release issued by the FBR on December 15, 2018:

“Federal Board of Revenue (FBR) has allowed filing of Income Tax returns until 17th December 2018 because of the weekend falling on 15th December which was previously announced as the deadline for filing of returns.

“The statement issued by the Official Spokesperson FBR says that a number of queries have been received about extension of last date of filing of return but the return filing date is not being extended any further.

“However, since the last date of filing of return falls on a non-working day, hence as per General Clauses Act the closing date for filing of Income Tax returns falling on 15th December 2018 as per previous announcement is automatically extended to next working day i.e. Monday the 17th of December.

“The tax offices will be extending help in filing of returns on Monday till close of office hours and the returns will be received electronically till 12 midnight.

Moreover, the Commissioners are also authorized to grant extension for a period up to 15 days on case-to-case basis. Although the receipt of return will not be blocked after due date, yet as per existing law, the names of persons who fail to file return by the closing date (or by the date extended by the Commissioners) will not be put on the Active Taxpayers List.”

March 31, 2019
FBR issues guidelines for refund payment through bonds

ISLAMABAD: In order to facilitate businesses / exporters whose refund claims are pending with Federal Board of Revenue (FBR) and they are facing liquidity problem, it has been decided to pay sales tax refunds through bonds to the claimants who express willing to get refund through bonds.

Following are important guidelines in this respect:

— The bond scheme pertains to sales tax refund only.

— The features of bond are provided under section 67A of the Sales Tax Act, 1990, as inserted vide Finance Supplementary (Second Amendment) Act, 2019.

— The bonds shall be issued to the claimants who express willingness for the same by giving an option at e.fbr.gov.pk using their login ID.

— The maturity period of bonds is three years from the date of issuance.

— The bonds carry a simple profit of 10% per annum payable at the end of maturity period i.e. against a bond of Rs. 100,000, Rs. 130,000 shall be paid after maturity to the holder of the bond.

— The bonds are transferable i.e. if a refund claimant who has been issued the bond can sell the same to another person / bank at a price agreed between the two parties.

— The bonds shall be acceptable by banks as collateral for getting advances / loans.

— There shall be no deduction of zakat on the bonds. Sahib-e-Nisab may pay zakat voluntarily as per shariah.

— The bonds shall be payable against Refund Payment Orders (RPOs) as issued in favour of the claimant.

— The bonds shall be issued in multiples of Rs. 100,000. The amount of refund payable as in excess of multiple of Rs. 100,000 shall be paid in cash by direct transfer through State Bank of Pakistan in the claimant’s account.

— The bonds shall be issued through Central Depository Company (CDC). The transfer / pledging of bonds shall be handled by CDC at the option of bond holder.

— The claimant who opt for issuance of bond should have an account with Central Depository Company (CDC). They can provide this account number while submitting their option for bonds to FBR.

— If a claimant does not have a CDC account, he still can opt for issuance of bonds. He will be guided regarding opening of CDC account.

— In case the bond holder wants to sell / transfer the bond, the buyer / transferee should also have a CDC account.

— At the end of maturity period, FBR shall pay the amount due under bond i.e. face value plus profit to the bond holder.

— If FBR decides, it can pay the amount due under bond to the bond holder including profit before maturity. This option is available only to FBR.

— The bond holder shall have to pay nominal fees to CDC on transfers / custody as provided in CDC schedule available at its website.

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March 30, 2019
SBP holds SaarcFinance seminar on audit

KARACHI: State Bank of Pakistan (SBP) hosted a seminar on ‘Internal Audit: Emerging Challenges and Effective Practices in Central Banks’ under the aegis of SAARCFINANCE Forum at National Institute of Banking and Finance, Islamabad during 27-29 March 2019, a statement said on Saturday.

Besides Pakistan, officials from SAARC central banks participated in the event.

Qasim Nawaz, Executive Director, SBP inaugurated the seminar.

While addressing the inaugural session, he stated that until a few years back, business process reengineering was at the core of innovation in banks.

While advancements in technology have further transformed the horizon of financial services, these innovations are also raising challenges of their own.

Adding further, he stated that the board and the senior management of State Bank are cognizant of the need to align its internal operations to the changing environment, and to promote innovation in the financial sector in a regulated environment.

Horst Simon, the keynote speaker of the event, discussing technological risks faced by business around the world, highlighted the importance of risk culture inculcated within the organization.

He emphasized on the roles and responsibilities of board, senior management and the employees to maintain a robust risk management mechanism.

The seminar was also addressed by Zayeem Bin Alam, Senior Manager of PricewaterhouseCoopers.

Zayeem discussed the risks of cyber security, social media, data privacy and third party risks and offered an IT auditor’s perspective of how to address those risks by discussing controls.

Syed Sohail Javaad, Director Payment Systems Department shared the on going developments about digital payments, their importance, evolution, the benefits of disruptive technologies to regulators, the emerging risks and appropriate responses to them from the perspective of internal audit.

Apart from these speakers, the delegates of the central banks also presented their country papers for the information of the audience.

March 30, 2019
Rupee falls by 70 paisas in open market

KARACHI: The Pak Rupee fell by 70 paisas against dollar on Saturday owing to demand in the open market.

The buying and selling of dollar was recorded at Rs142.00/Rs142.50 from previous day’s close of Rs141.30/Rs141.80 in cash ready market.

The rupee depreciated during the past two days owing to enhancing key policy rate and the intention shown by the government to enter new IMF loan program.

March 30, 2019
FBR requested to extend return filing date up to April 30

KARACHI: The Pakistan Tax Bar Association (PTBA) has formally requested the Federal Board of Revenue (FBR) to extend the deadline for filing income tax returns for the tax year 2018 to April 30, 2019.
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March 30, 2019
Weekly Review: Market to remain range bound

KARACHI: The stock market likely to remain range bound in the upcoming week amid lack of triggers.

Analysts at Arif Habib Limited said that with the State Bank of Pakistan raising the key discount rate by 50 bps, leveraged sectors such as Cements, Steel, Fertilizers, OMCs and Textiles may come under pressure while banks could support the index.

The market commenced on a negative note this week, shedding 403 points on Monday.

Expectations of a rate hike and potential pressure on leveraged sectors kept the market dull.

However, IMF team’s visit to Pakistan and news flow regarding consensus on economic policies later in the week created a positive momentum.

Moreover, USD 2.2 billion loan from China took the weekly reserves to USD 17 billion. With this, the KSE-100 Index gained 117points (up by 0.3 percent WoW) closing at 38,649 points.

Positive sector-wise contributions came from i) Oil & Gas Marketing Companies (+76 points), ii) Fertilizer (+41 points), iii) Automobile Assembler (+36 points), iv) Pharmaceuticals (+25 points) and v) Engineering. On the flip side, sectors that contributed negatively include i) Power Generation & Distribution (-52 points), ii) Food & Personal Care Products (-23 points) and Insurance (-23 points).

Scrip-wise major positive contributions came from SNGP (+38 points), MTL (+30 points), BAHL (+30 points), ENGRO (+24 points), and UBL (+24 points).

Scri points that contributed negatively includes HBL (-64 points), HUBC (-54 points) and NESTLE (-29 points).

Foreign buying continued this week clocking-in at USD 0.5 million compared to a net buy of USD 3.1 million last week. Buying was witnessed in Commercial Banks (USD 2.6 million) and Exploration & Production (USD 1.1 million).

On the domestic front, major selling was reported by Individuals (USD 5.4 million) and Companies (USD 5.0 million). Volumes settled at 128 million shares (up 53 percent WoW) while value traded clocked in at USD 31 million (up 10 percent WoW).

Other major news: i) Gwadar terminal developer plans IPO for $85 million project, ii) SNGPL, SSGCL seek hefty tariff hike from next fiscal year, iii Descon, CGGC awarded Mohmand Dam Project, iv) Govt to raise Rs2 per unit on power tariff to collect Rs200 billion, and v) Pakistan weighs LNG imports from Saudi, Malaysia.

March 30, 2019