Pkrevenue.com

Author: Faisal Shahnawaz

  • FBR suggested to abolish FTR for commercial importers

    FBR suggested to abolish FTR for commercial importers

    KARACHI: Federal Board of Revenue (FBR) has been suggested to abolish Final Tax Regime (FTR) for commercial importers and other segment of the economy in order to make the taxation system equitable.

    FBR sources said that suggestions had been received from business community and large business houses to eliminate the FTR and presumptive tax regime.

    The sources said that large private sector entities and chartered accountants urged the newly appointed chairman Shabbar Zaidi, who is also a chartered accountant and had represented Institute of Chartered Accountants of Pakistan (ICAP), to status of normal tax regime for commercial importers should be restored.

    The ICAP in its tax proposal for tax year 2019/2020 said that certain sectors/goods are being taxed under the presumptive/value added/ fixed/ final tax regimes.

    Pakistan Business Council (PBC) also said that the presumptive/value added/fixed/final tax regimes are taxing turnover as opposed to income. In addition, entities availing this regime are not required to file tax returns.

    “Under garb of the FTR, massive evasion of customs duties and sales tax are taking place putting the formal sector under undue pressure.”

    The informal economy has outgrown the formal economy and the major driver of this has been the FTR.

    The FBR said that the chartered accountants were strongly supporting elimination of FTR for commercial importers and recommended: “commercial importers status under Normal Tax Regime as introduced through the Finance Act, 2018 should be restored.”

    They said that the presumptive/ value added/ fixed / final tax regime should be replaced with a normal tax regime.

    Income has to be the only basis for taxation and option to exit the tax chain should not be available for whatever reason.

  • FBR recommended imposing environmental tax on industries producing polluting materials

    FBR recommended imposing environmental tax on industries producing polluting materials

    KARACHI: Federal Board of Revenue (FBR) has been suggested to impose environmental tax on industries producing non-renewable and polluting materials.

    Pakistan has a wide range of industries, which are involved in usage and production of nonrenewable, polluting materials that are extremely harmful for our environment.

    “There are many entities, AOPs and sole proprietors who are not taxed because they either do not have taxable income or, they do not intend to disclose it properly while conducting their businesses that are damaging country’s environment,” said Institute of Chartered Accountants of Pakistan (ICAP) in its tax proposals for budget 2019/2020..

    The institute recommended that higher tax should be levied at non-renewable, polluting inputs and outputs, such as coal, automobiles, chlorine, phosphate detergents, chemical pesticides, chemical fertilizers, lead acid batteries and plastic etc.

    “As an incentive, the organizations taking measures to preserve the environment may be made eligible for a tax credit,” it further suggested.

    Pakistan is already lacking behind other developed and developing countries who are taking measures to safeguard their ecosystem.

    “Introduction of this tax and tax credit would not only increase tax revenue and encourage multiple entities to file their return of income in order to avail the tax credit, but Pakistan will also be recognized as a country, which is taking an initiative to safeguard the environment,” ICAP suggested.

  • ACCA opposes tax amnesty, recommends enforcement on available information

    ACCA opposes tax amnesty, recommends enforcement on available information

    KARACHI: Association of Chartered Certified Accountants (ACCA) Pakistan has opposed tax amnesties and suggested the tax machinery to use available information with proper enforcement.

    “Tax Amnesties without proper penal clauses had been a failure. With the strengthening of OECD, they should be done away with and focus should instead be shifted on using the organization’s platform to retrieve necessary information and ensure proper enforcement of applicable laws and regulations,” the association recommended this in its tax proposals for budget 2019/2020.

    ACCA has presented detailed recommendations for bringing structural reforms in the taxation system while opposing any amnesty scheme in the presence of plethora of information maintained by the Federal Board of Revenue.

    For the structural reforms following measures have been suggested by the ACCA:

    • A single tax return for all taxation affairs of a taxpayer which all authorities can utilize to obtain the relevant data.

    • Harmonization of taxation laws in the country.

    • Resolving issues within IRIS to make it more user friendly

    • Integration of Federal and Provincial Revenue Authorities’ systems and databases

    Structural Reforms

    • Reducing the discretionary powers vested in FBR officials and shifting towards an objective criteria based approach

    • Developing the existing policy of differential tax treatments and incentives for filers while penalizing non-filers

    • Introducing impact on economic sectors (GDP development) and numbers of decisions upheld at the appellate forums along with collections target as a performance evaluation criteria for FBR functionaries

    • Ensuring time limits adherence as specified in the laws and rules particularly pertaining to refund matters

    • Facilitating the tax payers

    • Introducing confidence by establishing a swift response complaint resolution cell to deal with corruption and harassment of tax payers

    • Change in discretionary powers of FBR for moveable and/or immovable property including bank accounts attachment to improve ease of doing business and trust of taxpayers in the tax apparatus. Limit the attachment powers to only cases involving concrete information re asset disposal.

    • Ensuring no post remains vacant for more than two weeks to avoid delays in resolving tax-payers issues arising out of transfers, postings and additional charges, etc.

    • Limiting charge on a single post in FBR to a maximum of two (2) years to discourage the corrupt practices and collaborations.

    • Effective enforcement should be ensured by working on maximum automation of the taxation system.

    • Effective enforcement should be ensured by working on maximum automation of the taxation system.

    • Hiring and training of adequately qualified staff with ongoing capacity building should be focused on to ensure efficient and productive results from the tax apparatus.

    • Appointing independent officials as Commissioner Appeals ideally from the judicial service and qualified accountants practicing taxation from various bodies including ACCA.

    • ACCA is the largest Global accountancy body, which is now the largest in Pakistan too. Including ACCA members practicing taxation within the definition of accountant members for the Appellate Tribunal Inland Revenue will further strengthen the competition and meritocracy.

    • Hiring and training of adequately qualified staff with ongoing capacity building should be focused on to ensure efficient and productive results from the tax apparatus.

    • Limiting charge on a single post in FBR to a maximum of two (2) years to discourage the corrupt practices and collaborations.

    Related Stories

    ACCA suggests making FBR immovable property values in line with fair market value to stop asset undervaluation

  • Ufone wins silver trophy at Effie Awards

    Ufone wins silver trophy at Effie Awards

    KARACHI: Ufone has been awarded with a prestigious silver trophy at the Effie Pakistan Awards 2019, in the category of ‘Sustained Success’ for its Super Card Communication Campaigns.

    The awards, held around the world annually, celebrate companies with outstanding marketing communications ideas.

    Winning an Effie symbolizes a great sense of achievement for marketers, and Ufone is proud to have won for their Super Card campaigns, a statement said on Saturday.

    The sustained success category, unlike business category specific awards, is a special category in which products or services which have sustained success for three or more years are awarded for their continued success and overall excellence in business results and brand KPI success.

    Ufone won the award for its Super Card Communication. Over three years, Ufone Super Card, through it insightful communication has enabled the company to build trust with customers and become the benchmark for all in one bundle cards in the industry, and now owns the convenience positioning in consumers minds.

    Ufone Super Card campaigns were built around the concept of “befikri” or the peace of mind that it provided customers.

    The Ufone marketing team and JWT, together searched for real life stories, and insights from all across Pakistan, in order make the award winning campaigns over a three year period.

    The campaigns showed how our real customers used Super Card to achieve their full potential.

    The Effie Awards recognize forms of marketing communication that contribute to a brand’s success.

    Any idea driven by any marketing communications medium is eligible for an Effie, as long as results are proven.

    The not-for-profit initiative between Pakistan Advertisers Society and Effie Worldwide spotlights marketing ideas that work and encourage thoughtful dialogue about the drivers of marketing effectiveness.

    Winners demonstrate excellence in four key areas: definition of objectives, strategic development, creative execution, and measurement of results.

  • SRB suspends sales tax registration of M/s. Hellenic Shipping Agencies

    SRB suspends sales tax registration of M/s. Hellenic Shipping Agencies

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Hellenic Shipping Agencies (Pvt) Limited for non-payment and non-compliance of return filing for the last eight years.

    (more…)
  • Around 98pc offshore drilling near Karachi coast completes; nation to get good news in two weeks: Ali Zaidi

    Around 98pc offshore drilling near Karachi coast completes; nation to get good news in two weeks: Ali Zaidi

    KARACHI: The joint venture of foreign and local companies has completed around 98 percent drilling near Karachi coast for the possible discovery of huge reservoirs of oil and gas, Federal Minister for Maritime Affairs Syed Ali Haider Zaidi said on Saturday.

    The joint venture including ExxonMobil, ENI, PPL and OGDC is undertaking offshore drilling near Karachi coast. “The joint venture will drill around 5,500 meters and so far it has reached 5,392 meters,” the minister added.

    “The nation will receive good news regarding discovery in next two weeks,” he added.

    The minister was talking to media at an event to add another oil tanker to the fleet of Pakistan National Shipping Corporation (PNSC).

    He said that Pakistan annually paid around $4.5 billion as freight charges. “The addition of oil tanker to PNSC fleet will save huge foreign exchange reserves for the country,” he added.

    Talking about the hike in prices of petroleum products, he said that when the PTI government took charge the international oil price was at $51 per barrel and it had reached now $70 per barrel.

    Commenting on the ongoing negotiations for IMF loan program, he said that the present government was not willingly entering to IMF program. “We are taking loan to repay the old loans that were taken by PPP and PLM-N governments,” he added.

    He said that reducing tariff for gas and electricity was not solution as such reduction would compel the present government to take more loans as done by the previous governments.

  • Customs recovers Rs450 million illicit currency, arrests 30 percent in anti-money laundering drive

    Customs recovers Rs450 million illicit currency, arrests 30 percent in anti-money laundering drive

    ISLAMABAD: Pakistan Customs (Operation) has taken vigorous actions to counter illicit movement of currency, which is the primary tool used for money laundering and moving proceeds of crime in and out of the country, a statement said on Saturday.

    The current lead taken by Customs Operations FBR, and the effective control measures implemented by enforcement collectorates against currency smuggling has led to record seizures of around Rs. 450 million during July 2018 to April 2019, against seizures of Rs150 million in the corresponding period last year, exhibiting an increase of more than 200 percent.

    During the current year more than 30 persons have been arrested for currency smuggling, with ongoing investigations to unearth their domestic/international linkages.

    This remarkable achievement is a result of various policy and institutional measures taken under Customs Operations – FBR and the field formations.

    After an overall assessment of risks of Cash Smuggling through border areas and entry points, the Customs Operations – FBR is embarked upon an extensive ‘Risk Mitigation Strategy’ to curb cash smuggling.

    Currency Declaration System (CDS) has been implemented at international entry/exit points, which has been recently upgraded and linked with FIA database.

    During January to April 2019, the CDS has captured currency declarations of around US$20 million by incoming/outgoing passengers. Further, suspected travelers are being targeted by accessing the FIA database.

    In the same spirit, Baggage/vehicle scanners have been installed at Torkham, Chaman and Taftan border stations, for passenger and cargo screening.

    At land border Customs stations, Collector of Customs are coordinating with the relevant LEAs and intelligence agencies for information/intelligence sharing and coordinated operations for countering illicit currency movement.

    Further, joint control rooms have been established at international airports, manned jointly by Customs, ASF, ANF and FIA.

    To continue this momentum, a new Directorate of Cross Border Currency Movement (CBCM), has recently been established under Directorate General (I & I-Customs), through Customs General Order (CGO) 04/2019 dated 06.05.2019 which has defined its charter and scope of functions such as, Analysis and profiling of currency seizures/declarations, suspected banking transactions, maintenance of seizure database and sharing of currency seizure cases with other LEAs, institution of money laundering cases emanating from suspicious banking transactions and investigation and prosecution of cases under AML Act, 2010, Customs Act, 1969 and CrPC.

    Under the said order, the guidelines have also been provided to the Investigative Officers for improving investigations such as investigation of accused/arrested person(s) association with any religious/political/social organization or group(s), travel history, past criminal record, professional history, etc., along with the motive/linkages of each currency smuggling case with any of the associated offence, Identification of involvement of any foreign networks other than trans-national terrorist networks in the seizures data.

    The seizing agency (MCC or Regional Directorate) also urged to investigate foreign linkages of the investigation at hand through Chief (International Customs)-FBR, investigation of the source of funding for cash smuggling and the end user of the smuggling proceeds.

    In addition, an Office Order 01/2019 dated 10.04.2019 has been issued, providing a proper mechanism for investigating officers of seizing agency to conduct initial probe of Terror Financing (TF) linkages in all currency seizures, and sharing it with the relevant LEA, through Directorate of CBCM.

    For enhancing international cooperation in controlling smuggling, Pakistan Customs has so far signed 22 MoUs/agreements with foreign governments/Customs administrations for mutual cooperation in Customs matters. Under these agreements, requests for Mutual Legal Assistance (MLA) have been sent to foreign counterparts for identification of linkages in currency seizures.

    Ongoing initiatives of Pakistan Customs includes further re-structuring of enforcement formations on the basis of ground demands, introduction of Advance Passenger Information System (APIS) at the international airports, and establishing a National Targeting Centre, which shall serve as an integrated database of all LEAs working against the menace of smuggling.

    With the introduction of these initiatives, Pakistan Customs is optimistic of ridding Pakistan economy of the malaise of currency smuggling, and the ancillary ills of TBML, black economy, tax evasion, etc.

  • FPCCI praises FBR chairman for limiting powers of IR officers

    FPCCI praises FBR chairman for limiting powers of IR officers

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has praised the newly appointed chairman of Federal Board of Revenue (FBR) for limiting powers of Inland Revenue officers in tax recovery through bank account attachment.

    Engr. Daroo Khan Achakzai, President FPCCI in a statement on Saturday hailed the directive of the newly appointed Chairman FBR Shabbar Zaidi, for not attaching the bank account of a taxpayer unless his Chief Executive Officer / Owner is informed at least 24 hours prior to attachment and approval of the Chairman FBR is obtained.

    He said that the FPCCI had been clamoring for long for keeping a deterrent against the misuse of discretionary powers by the tax officials for recovery of arrears and attachment of bank account under Section 48 of Sales Tax Act, 1990 and Section 140 of Income Tax Ordinance 2001.

    The FPCCI Chief elaborated that there were increased incidences of bank account attachment and other serious coercive measures taken by the tax officer under the garb of the Section 48 for recovery of arrears and such abuse of powers were creating trust deficit and lack of confidence of taxpayers in law which are pre-requisite for success of any scheme.

    Achakzai hoped that the directive would address the complaints of business community about the unnecessary attachments of the bank accounts for recovery of the disputed accounts from the bank accounts of the taxpayers without fulfilment of legal process. “In many cases accounts have been attached without prior notice of the CEO / principle officer owner of the business community,” he added.

  • Karachi Chamber welcomes restricting FBR officers for freezing taxpayers’ bank accounts

    Karachi Chamber welcomes restricting FBR officers for freezing taxpayers’ bank accounts

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has warmly welcomed the first order issued by the newly appointed Chairman Federal Board of Revenue (FBR) Shabbar Zaidi immediately after assuming charge in which all the Commissioners Inland Revenue have been barred from freezing bank accounts which was being demanded by KCCI since long.

    President KCCI Junaid Makda termed the order as ‘pro-business move’ and the first step in the right direction which would not only help in restoring the lost confidence of the business & industrial community but would also prove to be favorable for the economy as after seeing such pro-business initiatives, many individuals would prefer to come into the tax net, which would result in documenting the economy and improving the country’s lowest tax-to-GDP ratio.

    In a statement issued, Junaid Makda pointed out that by virtue of this order, it would be mandatory for all Commissioners of Inland Revenue to obtain permission from Chairman FBR prior to freezing any bank account while at least 24 hour prior notice will also be served to the owner of the bank account which the business and industrial community highly appreciates.

    He said that the Karachi Chamber had struggled a lot and has been vocally raising voice against massive discretionary powers which have been bestowed to FBR officers even at lower level, intensifying the hardships for the loyal taxpayers.

    “As the first step in the right direction has been taken, we, the business and industrial community of Karachi, expect more such moves in near future. We firmly believe that massive discretionary powers have to be curtailed which is the only way forward to improve revenue collection, ensure economic prosperity and make FBR a taxpayers’ friendly institution”, he added.

    While extending felicitation to Shabbar Zaidi, President KCCI advised Chairman FBR to remain steadfast and keep on taking such bold steps which are in the larger interest of the country and the business community.

    Junaid Makda also extended Karachi Chamber’s full support and cooperation to Chairman FBR for all his future endeavors towards improving the existing taxation system of the country which is in really bad shape.

    He hoped that the newly appointed Chairman FBR would also review and take KCCI’s Budget Proposals into consideration which have been compiled after taking inputs from all the stakeholders.

    “KCCI’s Budget Proposals have been delineated after intense brainstorming as we wanted to ensure that all our recommendations for Federal Budget 2019-20 are devised in such a manner that they prove to be favorable for the economy and ensure an enabling business environment for the entire business & industrial community of Pakistan”, he added.

  • PTBA assures full support to new FBR chairman

    PTBA assures full support to new FBR chairman

    KARACHI: Pakistan Tax Bar Association (PTBA) has assured full support to Syed Muhammad Shabbar Zaidi, newly appointed chairman of Federal Board of Revenue (FBR).

    In a statement issued on Saturday PTBA welcomed the appointment of Shabbar Zaidi as chairman of Federal Board of Revenue (FBR).

    The tax bar declared the appointment of Shabbar Zaidi as positive step of the government.

    The PTBA congratulated Zaidi for taking the reins of FBR and agreeing to dedicate his time and energy for the betterment of the country.

    The statement said that Zaidi is a globally known professional and is bringing with him the wealth of in-depth knowledge of taxation system, Pakistan economy and the problems which are holding it back.

    “We hoped under his leadership along with the team members of FBR the structural flows in the revenue collection system will improve,” according to the statement.

    The PTBA assured the newly appointment FBR chairman of their full support and cooperation.