Pkrevenue.com

Author: Faisal Shahnawaz

  • Car imports massively fall by 45pc in 10 months

    Car imports massively fall by 45pc in 10 months

    KARACHI: The import of motor cars sharply declined by 45 percent during first ten months of current fiscal year owing to restriction imposed of duty and tax payment through foreign currency account and verification of remittances through banks.

    According to officials statistics made available to PkRevenue.com on Tuesday, the import of cars in completely built unit (CBU) was at $213.37 million during July – April 2018/2019 as compared with $388.835 million in the corresponding period of the last fiscal year.

    The ministry of commerce through SRO 52(I)/2019 dated January 15, 2019 imposed the restriction of payment of duty and taxes through foreign remittances.

    The SRO stated: “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 Pakistan Nationals themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency, as under,

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

    The customs sources said that the besides restrictions of the ministry of commerce the import of cars was also declined due to restriction on non-filers of income tax in registration with provincial registration authorities.

    Through Finance Act, 2018 the government imposed ban on non-filers for registering both imported and locally assembled cars. The government, however, lifted the ban on non-filers through Finance Supplementary (Second Amendment) Act, 2019 only for locally assembled cars.

  • FBR suggested reducing income tax rate for banks

    FBR suggested reducing income tax rate for banks

    KARACHI: Federal Board of Revenue (FBR) has been advised to reduce income tax rates for banking companies in line with general corporate tax rates.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020, said that the banking sector tax rates have not been reduced in line with the general corporate tax rates.

    Furthermore, Finance Supplementary (Second Amendment) Bill 2019, proposed to again amend the First Schedule to the Income Tax Ordinance 2001, whereby, Super Tax of 4 percent is applicable on banks from tax year 2018 to tax year 2021.

    The banks, in compliance with the prevailing taxation regime have already closed the tax year 2018 (accounting year 2017) and income tax returns have already been duly filed/assessed.

    As a result of the proposed abovementioned retrospective application from tax year 2018 (accounting year 2017), banks would now have to effectively pay super tax for two years or 8 percent instead of 4 percent in tax year 2019 i.e. 4 percent already paid in advance for tax year 2019 along with retrospective charge of 4 percent now being proposed for tax year 2018.

    The OICCI suggested that the tax rates of the banking sector should be aligned with other sectors.

    It is recommended, application of super tax on tax year 2018 should be removed to avoid the double charge of super tax in tax year 2019.

    Furthermore, it is requested that the same overall relief on super tax, granted to other industries, is also provided to the banking sector as well.

  • PTBA urges benefits for taxpayers opting out of PTR

    PTBA urges benefits for taxpayers opting out of PTR

    KARACHI: Pakistan Tax Bar Association (PTBA) has urged the tax authorities to give benefits to persons opting out of presumptive tax regime (PTR).

    In its proposals for budget 2019/2020, the apex tax bar said that through Finance Act, 2012 positive steps were taken for opting out of presumptive tax regime in respect of sale of goods, import and export of goods, subject to certain conditions, which were highly appreciated.

    The Finance Act, 2014, however reversed the amendments and in place thereof inserted new clauses (56B), (56C), (56D), (56E), (56F) and (56G); whereby certain persons may opt out of the final tax regime by filing the return of income along with accounts and documents as may be prescribed subject to the condition that their minimum tax liability under normal tax regime shall not be less than the tax already collected/deducted at the applicable rates of the respective Sections.

    The Finance Act, 2014 also inserted certain new clauses on similar lines. Under these clauses, the option to opt out of the final tax regime was provided to a person who provides services of stitching, dying, printing, embroidery, washing, sizing and weaving to exporters or an export house.

    Furthermore, petrol pump operators and persons earning commission or brokerage are also provided with such an option.

    Under the new clauses introduced by the Finance Act, 2014, the tax liability of persons is higher than the tax liability they were required to pay under the initiative introduced vide the Finance Act, 2012.

    “Furthermore, it should be noted that as per the current position of the law, the taxpayers would, in practice, not obtain any financial benefit by opting out of the presumptive regime and would instead be required to face the additional burdens and risks of tax audits,” the tax bar said.

    The PTBA said that the options introduced by the Finance Act, 2012 should be reintroduced or alternatively, as a first step the corporate sector is given option to opt out from presumptive taxation.

    The proposed modification may help starting the journey to tax real income instead of taxation under the PTR reduces the additional burdens imposed on the corporate sector.

  • Budget deficit swells to 5 percent in nine months, higher than fiscal year target

    Budget deficit swells to 5 percent in nine months, higher than fiscal year target

    ISLAMABAD: The country’s budget deficit soared to 5 percent in the first nine months of current fiscal year, which is already higher than the full year target of 4.9 percent.

    According to statistics issued by the ministry of finance on Tuesday, the budget deficit for July –April 2018/2019 increased to five percent, which was 4.3 percent in the same period of the last fiscal year.

    According to the ministry the total revenue to the GDP was 9.3 percent during first nine months whereas the expenditure to the GDP swell to 14.3 percent of the GDP during the period under review.

    The statistics showed that the total revenue were at Rs3,583 billion during July – March 2018/2019, out of which tax revenue were at Rs3,162 billion. The collection of tax by the federal government was at Rs2,874 billion and provincial share was Rs287.7 billion.

    Total expenditure during the period was Rs5,506 billion. The current expenditure was at Rs4,798 billion and development expenditure was at Rs684 billion.

  • Pakistan’ FDI declines by 52 percent in 10 months

    Pakistan’ FDI declines by 52 percent in 10 months

    KARACHI: Foreign Direct Investment (FDI) has declined by 52 percent during first 10 months of current fiscal year owing to higher repatriation of profits by corporate sector.

    The total FDI was recorded at $1.376 billion during July –April 2018/2019 as compared with $2.849 billion in the corresponding period of the last year, showing 51.7 percent decline, according to data released by State Bank of Pakistan (SBP) on Tuesday.

    The inflows under FDI registered 22 percent decline to $2.684 billion during first 10 months of current fiscal year as compared with $3.44 billion in the same period of the last fiscal year.

    The outflows on the other hand increased by 121 percent to $1.308 billion during July – April 2018/2019 as compared with $591 million in the same period of the last fiscal year.

    The total foreign private investment registered 64.3 percent decline to $968 million during July-April 2018/2019 as compared with $2.713 billion in the same period of the last fiscal year.

    The portfolio investment posted 200 percent decline during the period under review to outflow of $408 million as compared with the outflow of $136.2 million.

    Foreign public investment witnessed 140.4 percent decline to $2.45 billion during July – April 2018/2019 as compared with outflow of $990.6 in the same period of the last fiscal year.

  • Stock market gains 192 points on positive sentiments

    Stock market gains 192 points on positive sentiments

    KARACHI: The stock market ended with gain on Tuesday continuing the positive sentiments for second consecutive day.

    The benchmark KSE-100 index closed at 34,442 points as compared with previous day’s closing of 33,250 points with gain 192 points.

    Analysts at Topline Securities said that second consecutive session closed in positive trajectory, as bourse gained 192 points (0.57 percent), closing at 33,442 index level as creation of ‘Stock Market Support Fund’ triggered investors to rush for state owned stocks like, OGDC, SSGC, SNGP and PSO.

    These three stocks closed near to their upper locks in today’s session.

    Steel sector also outperformed, where ASTL, CSAP, and MUGHAL closed at their upper locks. Additionally, ISL and ASL closed to near to upper lock.

    Trading activity remained dull as volume went down by 7 percent, similarly, value decline 13 percent. Unity, TRG and KEL remained the volume leader of today’s session with cumulative volume of 40mn shares.

    Out of 307 actively traded scrips today, 173 closed positive, while 133 remained negative.

  • Rupee hits all time low at Rs152/dollar in interbank

    Rupee hits all time low at Rs152/dollar in interbank

    KARACHI: The Pak Rupee has plunged to another historic low against dollar on Tuesday owing to panic in the financial markets.

    The rupee fell by Rs2.35 to end at Rs152 to the dollar from last day’s closing of Rs149.65 in interbank foreign exchange market.

    The dollar made a new historic high to reach Rs152 and likely to fell more due to higher demand.

    The interbank foreign exchange marked was initiated in the range of Rs151.00 and Rs152.00.

    The market recorded a high of Rs152.50 and low of Rs151.75 and closed at Rs152.00.

    The exchange rate in open also witnessed historic low of Rs153.50 to the dollar in the cash ready market.

  • Temporary import of arms, ammunition by foreign hunters allowed

    Temporary import of arms, ammunition by foreign hunters allowed

    ISLAMABAD: The ministry of commerce has allowed temporary import of arms and ammunition by foreign hunters by amending Import Policy Order, 2016.

    The ministry issued SRO 565(I)/2019 to amend Import Policy Order, 2016.

    It said: “Temporary import-cum-export of arms and ammunition by foreign hunters shall be allowed subject to NOC from the ministry of interior.”

  • SRB launches amnesty scheme for exemption from penalty

    SRB launches amnesty scheme for exemption from penalty

    KARACHI: Sindh Revenue Board (SRB) on Monday launched an amnesty scheme to exempt penalty amount on payable as sales tax on services.

    However, concession has been granted on the payment of default surcharge.

    The SRB issued notification stating that the provincial revenue board had exempted the whole of the amount of penalty and such of the amount of default surcharge as is in excess of the amount of default surcharge, provided that the principal amount of the tax and the following amount of the default surcharge thereon are deposited during the periods as specified below:

    (a) the principal amount of tax (as outstanding on May 21, 2019) along with 5 percent of the amount of default surcharge thereon if deposited during the period from May 21, 2019 to May 27, 2019.

    (b) the principal amount of tax (as outstanding on May 21, 2019) along with 10 percent of the amount of default surcharge thereon if deposited during the period from May 28, 2019 to June 03, 2019.

    (c) the principal amount of tax (as outstanding on May 21, 2019) along with 15 percent of the amount of default surcharge thereon if deposited during the period from June 04, 2019 to June 10, 2019.

    (d) the principal amount of tax (as outstanding on May 21, 2019) along with 20 percent of the amount of default surcharge thereon if deposited during the period from June 11, 2019 to June 20, 2019.

    (e) the principal amount of tax (as outstanding on May 21, 2019) along with 25 percent of the amount of default surcharge thereon if deposited during the period from June 21, 2019 to June 30, 2019.

    The SRB said that the word ‘deposited’, used in the notification, means deposited by means of the Computerized Payment Receipt (CPR) so generated.

    The SRB further said that benefits of exemption of penalty and default surcharge, as specified in the notification, shall also be available in relation to the arrears of the tax (so outstanding on the May 21, 2019) payable under Sindh Sales Tax Ordinance, 2000 and under the Sindh Sales Tax on Services Act, 2011 by:

    (i) persons who are liable to be registered under Section 24 of the Act but were not registered, provided that:

    (a) they get themselves registered with SRB in the prescribed manner during the aforementioned periods from May 20, 2019 to June 30, 2019;

    (b) they deposited their tax liabilities for the principal amount of tax along with the aforementioned percentage of the amount of default surcharge thereon in relation to the tax periods from the date of the commencement of their economic activity to the tax period of May 2019;

    (c) they also e-file their tax returns, for the tax periods from date of commencement of their economic activity of taxable services to the tax period May 2019 during the period from the date of this notification to June 30, 2019.

    Explanation: For the purpose of word ‘registered’ in the case of withholding agents shall mean ‘e-signed up’ in terms of Sindh Sales Tax Special Procedure (Withholding) Rules, 2014;

    (ii) persons who were registered but were non-filers or null-filers or nil-filers of their tax returns;

    (iii) persons who were late-registered with SRB and they did not file all of their tax returns for the tax periods from the date of commencement of their economic activity of taxable services;

    (iv) persons who withheld any amount of Sindh sales tax but have either not deposited that withheld amount in provincial government account or have deposited the withheld amount in a head of account other that the Sindh government’s head of account.

    (v) persons who determine the arrears through self-detection and self-assessment;

    (vi) persons who short-paid any amount of tax in their tax returns and persons against whom any arrears of tax was detected in SRB’s scrutiny of tax returns or in SRB’s audit of taxpayers’ record;

    (vii) persons against whom any tax amount has been determined or assessed or adjudged, by an officer of the SRB, through an order or decision passed under the Sindh Sales Tax on Services Act, 2011, or the rules/notification issued thereunder;

    (viii) persons against whom any tax liability has been adjudged or confirmed by the Commissioner (Appeals) or the Appellate Tribunal;

    (ix) persons whose cases are under assessment or under adjudication with any officer of the SRB or are pending, at the appellate stage with the Commissioner (Appeals) or with the Appellate Tribunal; and

    (x) persons whose cases are under litigation in any court of law including the High Court or the Supreme Court.

    The SRB said that the benefits of this notification, to the extent as specified below, shall also be available in case where a person has late paid the principal amount of tax prior to the date of this notification and/ or has not yet discharged the liability of penalty (whether the prescribed amount or the adjudged amount of the penalty) and the default surcharge on such late payment provided that he pays an amount equal to:

    (a) 5 percent of such amount of penalty and 15 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from May 21, 2019 to June 3, 2019;

    (b) 10 percent of such amount of penalty and 20 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 04, 2019 to June 20, 2019; and

    (c) 15 percent of such amount of penalty and 25 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 20 21, 2019 to June 30, 2019.

    The SRB said that if the whole of the dues of the principal amount of tax and the aforementioned prescribed percentage of the amount of default surcharge thereon are paid by a person in terms of this notification, he shall not be prosecuted under Section 49 of the Act and the offence, to the extend of the arrears of the tax paid under this notification, shall also be compounded under Section 46 of the Act.

    The SRB further said that if the principal amount of the tax and the aforementioned percentage of the amount of the default surcharge thereon, as are paid in terms of this notification by the persons in clauses (vi) (vii) (viii) (ix) and (x) of paragraph 2 of the notification, are held to be not payable in view of the order issued by the respective competent authority (i.e. the adjudicating officer or the commissioner appeals or the appellate tribunal or the court of law), the officer of the SRB, not below the rank of an assistant commissioner, shall allow tax adjustment/credit of the amount or alternately, shall refund the amount, so paid, within 90 days from the date of receipt of the taxpayer’s application, for refund or for tax adjustment/credit, together with a copy of the order/judgment and also of the evidence that the incidence of the tax was not passed on to the service recipient.

    The SRB further said that the notification would not apply for refund or adjustment of any amount of tax or default surcharge or penalty as has already been paid or recovered on any date prior to May 21, 2019.