Pkrevenue.com

Author: Faisal Shahnawaz

  • Car sales drop by 4.5 percent in eight months

    Car sales drop by 4.5 percent in eight months

    KARACHI: The sales of locally assembled cars have dropped by 4.5 percent to 162,692 units during July – January 2018/2019 as compared with 170,354 units in the same period of the last fiscal year.

    Analysts said that the decline car sales were due to jump in prices and restriction imposed on non-filers to register new cars.

    However, the government lifted this restriction through amendments made in Finance Supplementary (Second Amendment) Act, 2019.

    Analysts at Topline Research said Pakistan Auto sales are down by 13 percent YoY in February 2019, as against 4.5 percent YoY decrease in January 2019.

    Moreover, sales are down 13 percent MoM which can be attributed to lower number of working days in February compared to January.

    To note, measures in economic reforms package are expected to support declining volumes, however, volumes will still see a downward trend in months to come, in our view, due to slow down in economy as well as significant jump in prices in last 15 months.

    Total sales during 8MFY19 have come in at 163K units, down by 4.5 percent YoY.

    Indus Motors (INDU) reported YoY growth yet again (up 8 percent YoY in Feb 2019) as the strong (albeit thinning) order book continues to support sales. Fortuner sales rose 80 percent YoY, first YoY increase in 8 months, while Corolla continued its growth trend with sales up 23 percent YoY.

    On the other hand Hilux sales fell 72 percent YoY, highest YoY decline in 19 months.

    Pak Suzuki (PSMC) continued to report YoY decline in sales, down by 17 percent YoY in Feb 2019. Sales decline was led by Mehran, Bolan, Swift, Cultus and Ravi variants down by 33 percent YoY, 18 percent YoY, 28 percent YoY, 14 percent YoY and 14 percent YoY, respectively.

    Wagon-Rwas the only PSMC variant to record growth YoY (up 16 percent YoY).

    Honda cars (HCAR) sales fell 27 percent YoY, worst YoY decline since Apr 2012. This coincides with worst YoY decline in sales of city and civic variants, which fell by 24 percent YoY.

    In addition to the economic factors, decline in City and Civic variants can also be attributed to the expected launch of Civic 1.5 Turbo (substitute for Civic 1.8) in coming months.

    Simultaneously BR-V sales fell 45 percent YoY. To, note, BR-V sales have fallen YoY for the 10 consecutive month as the variant introduced in Apr 2017 loses its charm with the consumers.

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  • FBR announces reward money for whistleblowers in benami properties

    FBR announces reward money for whistleblowers in benami properties

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday announced reward for whistleblowers for helping tax authorities in detection and confiscation of benami properties.

    The FBR issued SRO 326(I)/2019 to notify rules calling Benami Transactions (Prohibition) Rules, 2019 in order to implement the benami law, which was passed in February 2017.

    The FBR said that for the purpose of reward, the provisions of the Inland Revenue Reward Rules, 2016 except as specified in these rules shall mutatis mutandis apply.

    Following are the rewards for the whistleblowers:

    01. Benami property value Rs2,000,000 or les. The amount of reward shall be five percent of the price of benami property.

    02. Benami property value more than Rs2,000,000 but not more than Rs5,000,000. The amount of reward shall be Rs100,000 plus four percent of the price of benami property in excess of Rs2,000,000.

    03. Benami property value over Rs5,000,000. The amount of award shall be Rs220,000 plus three percent of the price of benami property in excess of Rs5,000,000.

    Under the rules the FBR has been empowered to provisionally attach benami property or confiscate it.

    The benami law was passed by the national assembly two years back with aim to bring those persons into tax net, who had concealed their undisclosed assets in the name of others.

  • Remittances surge by 12pc to $14.35 billion in eight months

    Remittances surge by 12pc to $14.35 billion in eight months

    KARACHI: The inflows of home remittances surged by 12 percent to $14.35 billion during first eight months (July – February) of current fiscal year, State Bank of Pakistan (SBP) said on Monday.

    Overseas Pakistani workers remitted $14.35 billion in the first eight months (July to February) of FY19, showing a growth of 11.82 percent compared with $12.83 billion received during the same period in the preceding year.

    During February 2019, the inflow of worker’s remittances amounted to $1576.51 million, which is 9.56 percent lower than January 2019 and 8.71 percent higher than February 2018.

    The country wise details for the month of February 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $370.04 million, $335.66 million, $240.80 million, $251.99 million, $152.25 million and $37.71 million respectively compared with the inflow of $348.31 million, $332.18 million, $207.27 million, $201.01 million, $149.4 million and $48.65 million respectively in February 2018.

    Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during February 2019 amounted to $188.06 million together as against $163.35 million received in February 2018.

  • Equity market sheds 26 points in range bound trading

    Equity market sheds 26 points in range bound trading

    KARACHI: The equity market has lost 26 points on Monday in a range bound trading activities.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 38,924 points as against 38,950 points showing a decline of 26 points.

    Analysts at Arif Habib Limited the market remained range bound throughout the day and oscillated between -74 points to +196 points.

    The index went up earlier during the day but selling pressure brought the index down.

    Majority of the volumes were observed in OGDC on the downside, both in regular market (2.6 million) and also on NDM (6.3 million).

    Other than OGDC, PPL and POL also saw activity on the downside.

    Banking sector topped the volumes chart, out of which BOP saw volume of 16 million.

    Volumes remained anaemic and investors generally remained cautious as the market is coming off slowly again after it dropped significantly last week due to tensions on the border.

    Sectors contributing to the performance include Banks (+46 points), Fertilizer (-21 points), E&P (-17 points), O&GMCs (-12 points), Insurance (-12 points), Autos (-7 points).

    Volumes declined again from 74 million shares to 68 million shares (-9 percent DoD).

    Average traded value also declined by 12 percent to reach US$ 23.8 million a as against US$ 27.1 million.

    Stocks that contributed significantly to the volumes include BOP, KEL, DCL, UNITY and OGDC, which formed 43 percent of total volumes.

    Stocks that contributed positively include MEBL (+21 points), UBL (+16 points), PMPK (+10 points), KTML (+9 points), and HCAR (+8 points). Stocks that contributed negatively include ENGRO (-15 points), OGDC (-12 points), PSMC (-8 points), JLICL (-7 points) and EFERT (-6 points).

  • Rupee falls by 26 paisas against dollar

    Rupee falls by 26 paisas against dollar

    The Pakistani Rupee experienced a depreciation of 26 paisas against the US Dollar, closing at Rs138.81 in the interbank foreign exchange market. This decline comes after last Friday’s closing of Rs138.55, reflecting heightened demand for dollars driven by import and corporate payment obligations.

    (more…)
  • FBR’s issues updated ATL, adds over 42,000 active taxpayers

    FBR’s issues updated ATL, adds over 42,000 active taxpayers

    ISLAMABAD: Federal Board of Revenue (FBR) updated Active Taxpayers List (ATL) on Monday and added around 42,000 taxpayers’ names since launch of new list.

    (more…)
  • Income Tax Ordinance 2001: advance tax on electricity consumption

    Income Tax Ordinance 2001: advance tax on electricity consumption

    KARACHI: Power supply companies are required to deduct and collect advance tax from industrial and commercial consumers at rates specified.

    According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR), the Section 235 explained the rates of advance tax on consumption of electricity.

    Section 235: Electricity consumption

    Sub-Section (1): There shall be collected advance tax at the rates specified in Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial consumer.

    Rate of collection of tax under section 235 where the gross amount of electricity bill

    (a)does not exceed Rs. 400Rs. 0
    (b)exceeds Rs. 400 but does not exceed Rs. 600Rs. 80
    (c)exceeds Rs. 600 but does not exceed Rs. 800Rs. 100
    (d)exceeds Rs. 800 but does not exceed Rs. 1000Rs. 160
    (e)exceeds Rs. 1000 but does not exceed Rs. 1500Rs. 300
    (f)exceeds Rs. 1500 but does not exceed Rs. 3000Rs. 350
    (g)exceeds Rs. 3000 but does not exceed Rs. 4500Rs. 450
    (h)exceeds Rs. 4500 but does not exceed Rs. 6000Rs. 500
    (i)exceeds Rs. 6000 but does not exceed Rs. 10000Rs. 650
    (j)exceeds Rs. 10000 but does not exceed Rs. 15000Rs. 1000
    (k)exceeds Rs. 15000 but does not exceed Rs. 20000Rs. 1500
    (l)exceeds Rs. 20000.(i) at the rate of 12 per cent for commercial consumers;
    (ii) at the rate of 5 per cent for industrial consumers.

    Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    Sub-Section (3): Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax.

    Sub-Section (4): Under this section, —

    (a) in the case of a taxpayer other than a company, tax collected up to bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;

    (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and

    (c) in the case of a company, tax collected shall be adjustable against tax liability.

    Section 235A: Domestic electricity consumption

    Sub-Section (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.

    The rate of tax to be collected under section 235A shall be-

    (i) 7.5% if the amount of monthly bill is Rs. 75,000 or more; and
    (ii) 0% the amount of monthly bill is less than Rs. 75,000.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Sub-Section (3): Tax collected under this section shall be adjustable against tax liability.

  • Pakistan emerges as ideal marked for investment

    Pakistan emerges as ideal marked for investment

    ISLAMABAD: Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Textile, Industries & Production on Sunday said that Pakistan has become a sought after destination for investment due to Government of Pakistan’s recently carved out investor friendly policies.

    He was addressing at Pakistan – Qatar Trade and Investment Conference that was held in Qatar on March 10, 2019.

    He also elaborated these policies of the government and lucrative incentives being provided to the foreign investors.

    Highlighting the recent economic stability and progressive on-going economic activities in the wake of CPEC; he stated: “Pakistan has emerged as an ideal market for investment.”

    Furthermore, he was of the view that improved security situation has also motivated foreign investors for their safe investments in Pakistan.

    He stated that trade volume between Pakistan and Qatar can be enhanced through increased business engagements.

    He encouraged Qatari investors to invest in Pakistan mainly in the areas related with real estate, hospitality, petro-chemical, food & agriculture etc.

    Qatari Minister of Commerce and Industry Ali Bin Ahmed Al-Kuwari welcomed Pakistani delegates and told that there were approximately 1450 companies mutually owned by businessmen from both sides.

    He further added that Qatari side is ready to invest in Pakistan and is open to provide a platform to the Pakistani investors to use their market for business both inside and outside Qatar.

    He expressed his desire to further the relationship of both sides in trade and investment through regular business exchanges, trade expose and official engagements.

    Haroon Sharif, Chairman, Board of Investment made a brief presentation highlighting the potential areas of investment in Pakistan.

    He reiterated Prime Minister Imran Khan’s statement that it is the best time for investment in Pakistan and the opportunity shall not be missed.

    Yousef Al-Jaidah, Chief Executive Officer of Qatar Financial Center shed light on the new emerging belt initiative which includes countries like Turkey, Kuwait, Iraq, Qatar, Oman, Malaysia and Pakistan.

    He stated that this initiative will further enhance the trade and investment ties amongst these countries.

    Pakistan Ambassador to the State of Qatar Syed Ahsan Raza Shah was also present on the occasion.

    The conference was followed by business to business (B to B) meetings of the businessmen participating from both sides.

  • Late filers may be allowed for Active Taxpayers List

    Late filers may be allowed for Active Taxpayers List

    KARACHI: Federal Board of Revenue (FBR) may allow taxpayers who filed their returns after due date to have their names on Active Taxpayers List (ATL).
    FBR sources said that the finance ministry had asked the revenue body to review the issue. The ministry of finance had received many representations on the issue.
    The government through Finance Act, 2018 introduced Section 182A of Income Tax Ordinance, 2001 to restrict late filers of income tax to appear on ATL for tax year 2018.
    The ATL for the tax year 2018 issued by the FBR on March 01, 2010 showed around 1.6 million return filers by due date for salaried class, business individuals and corporate entities i.e. December 15, 2018 and December 31, 2018.
    The last ATL for tax year 2017 issued by the FBR had shown around 1.84 million active taxpayers on the list. This means the FBR has lost around 240,000 active taxpayers on the list.
    Pakistan Tax Bar Association (PTBA), the apex tax bar of the country, urged the FBR to delete this section as this would result in discouraging potential taxpayers to become filers.
    “It will be another disaster like the provision of Section 214D of the Ordinance, which created huge pendency of tax audt cases approximately 1.2 million and finaly the government created facility for the existing taxpayers by introducing Section 214E of the Ordinance for disposal / closure of such cases in the Finance Supplementary (Amendment) Act, 2018.”
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  • Income Tax Ordinance 2001: advance tax on cash withdrawal

    Income Tax Ordinance 2001: advance tax on cash withdrawal

    KARACHI: Every banking company is responsible for deducting and collecting a certain percentage of tax on cash withdrawal on Rs50,000 per day from an account.

    Since passage of Finance Supplementary (Second Amendment) Bill, 2019 from the parliament, the tax is no more on withdrawal by a filer of income tax return.

    Therefore, this tax is only be deducted on withdrawal by non-filer of income tax return at the rate of 0.6 percent on cash withdrawal of Rs50,000 per day.

    The tax is deducted under Section 231 of Income Tax Ordinance, 2001.
    Section 231A: Cash withdrawal from a bank.—

    Sub-Section (1): Every banking company shall deduct tax at the rate specified in Division VI of Part IV of the First Schedule, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds fifty thousand rupees.

    “Explanation.- For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.”

    Section 231AA: Advance tax on transactions in bank

    Sub-Section (1): Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of sale against cash of any instrument, including Demand Draft, Pay Order, CDR, STDR, SDR, RTC, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments.

    Sub-Section (2): Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of transfer of any sum against cash through online transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer.

    Sub-Section (3): The advance tax under this section shall be collected at the rate specified in Division VIA of Part IV of the First Schedule, where the sum total of payments for transactions mentioned in sub-section (1) or sub-section (2) as the case may be, exceed twenty-five thousand rupees in a day.