Pkrevenue.com

Author: Faisal Shahnawaz

  • Rupee makes significant gains against dollar

    Rupee makes significant gains against dollar

    KARACHI: The rupee made significant gain of 17 paisas against dollar on Wednesday after sufficient inflows of remittances and export receipts.

    The rupee ended 141.12 to the dollar from Monday’s closing of Rs141.29 in interbank foreign exchange market.

    The interbank foreign exchange market was initiated in the range of Rs141.28 and Rs141.35.

    The market recorded day high of Rs141.30 and low of Rs141.10 and closed at Rs141.12.

    Currency expert said that the sufficient inflows in shape of remittances and export receipts helped the rupee to gain value.

    The exchange rate in the open market was remained unchanged.

    The buying and selling of dollar was recorded at Rs141.20/141.70 same previous day’s level in cash ready market.

  • Equity market plunges by 596 points on expected tough budgetary measures

    Equity market plunges by 596 points on expected tough budgetary measures

    KARACHI: The equity market plunged by 596 points on Wednesday owing to concerns over interest rate rise and tough measures in the budget.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 35,035 points as against 35,631 points showing a decline of 596 points.

    Analysts at Arif Habib Limited said that KSE-100 index had a major draw down of 781 points that was caused by across the board selling.

    Market started on a positive note with 35 points but the selling pressure that was witnessed in the past couple of sessions started reflecting soon.

    Power, E&P, Cement, Steel, Banks and Chemical sectors contributed mainly to the volumes and also to decline. KEL declined significantly in the early session but started recovering by day end.

    Overall, KEL registered a volume of 16.7M shares followed by SNGP (5.7M) and MLCF (5.2M). Investors seem to have concerned about the repercussions of IMF conditionalities, as well as a host of issues from rising interest rates to an impending tough budget.

    Sectors contributing to the performance include Fertilizer (-133 points), E&P (-105 points), Banks (-55 points), O&GMCs (-51 points), Power (-41 points).

    Volumes increased significantly from 65.4mn shares to 113.2mn shares (+73 percent DoD). Average traded value also increased by 67 percent to reach US$ 32.3mn as against US$ 19.4mn.

    Stocks that contributed significantly to the volumes include KEL, SNGP, MMLCF, PIBTL and WTL, which formed 32 percent of total volumes.

    Stocks that contributed positively include COLG (+13 points), UBL (+10 points), BAFL (+3 points) SHEL (+3 points) and ARPL (+2 points). Stocks that contributed negatively include MCB (-51 points), ENGRO (-36 points), FFC (-34 points), PPL (-32 points) and MARI (-28 points).

  • Withholding tax rates on electricity consumption for tax year 2019

    Withholding tax rates on electricity consumption for tax year 2019

    KARACHI: The electricity supply company shall collect advance tax from industrial and commercial consumer as per updated withholding tax card for tax year 2019 issued after amendments made to Income Tax Ordinance, 2001 through Finance Supplementary (Second Amendment) Act, 2019.

    Federal Board of Revenue (FBR) issued following withholding tax rates under Section 235 of Income Tax Ordinance, 2001 to be collected by person preparing electricity bills from commercial and industrial consumers of electricity along with payment of electricity consumption charges:

    Does not exceed Rs. 400: Zero tax

    Exceeds Rs400 but does not exceed Rs600: Rs80

    Exceeds Rs600 but does not exceed Rs800: Rs100

    Exceeds Rs800 but does not exceed Rs1000: Rs160

    Exceeds Rs1000 but does not exceed Rs1500: Rs300

    Exceeds Rs1500 but does not exceed Rs3000: Rs350

    Exceeds Rs3000 but does not exceed Rs4500: Rs450

    Exceeds Rs4500 but does not exceed Rs6000: Rs500

    Exceeds Rs6000 but does not exceed Rs10000: Rs650

    Exceeds Rs10000 but does not exceed Rs15000: Rs1000

    Exceeds Rs15000 but does not exceed Rs20000: Rs1500

    Exceeds Rs20000: (i) At the rate of 12 percent for commercial consumers; (ii) at the rate of 5 percent for industrial consumers.

    The tax shall be:

    (i) Adjustable In case of company.

    (ii) in case of other than company tax collected on Rs, 360000 amount of annual bill will be minimum tax.

    (iii) in case other than company tax collected on amount over and above Rs 30000/- of monthly bill will be adjustable.

    (iv) Final for CNG Stations.

    The withholding tax on domestic consumers of electricity under Section 235A shall be:

    (i) If the amount of monthly bill is Rs75,000 or more: 7.5 percent

    (ii) If the amount of monthly bill is less than Rs75,000: the tax rate shall be zero.

    The withholding tax from every steel melters and composite steel units under Section 235B shall be Re 1 per unit of electricity consumed and the tax shall be non-adjustable.

  • Sales Tax Act 1990: tax payment by company in liquidation

    Sales Tax Act 1990: tax payment by company in liquidation

    KARACHI: The sales tax law has defined the procedure for liability for payment of tax in case of private company is in state of liquidation.

    The updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 58 explained the payment method from the company is wound up.

    Section 58: Liability for payment of tax in the case of private companies or business enterprises

    Notwithstanding anything contained in the Companies Act, 2017 (XIX of 2017), where any private company or business enterprise is wound up and any tax chargeable on the company or business enterprise, whether before, or in the course, or after its liquidation, in respect of any tax period cannot be recovered from the company or business enterprise, every person who was a owner of, or partner in, or director of, the company or business enterprise during the relevant period shall, jointly and severally with such persons, be liable for the payment of such tax.

    Section 58A: Representatives

    Sub-Section (1): For the purpose of this Act and subject to sub-sections (2) and (3), the expression “representative” in respect of a registered person, means:

    (a) where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual;

    (b) where the person is a company (other than a trust, a Provincial Government, or local authority in Pakistan), a director or a manager or secretary or agent or accountant or any similar officer of the company;

    (c) where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust;

    (d) where the person is a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Provincial Government or local authority;

    (e) where the person is an association of persons, a director or a manager or secretary or agent or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;

    (f) where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or

    (g) where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political subdivision of the government.

    Sub-Section (2): Where the Court of Wards, the Administrator General, the Official Trustee, or any receiver or manager appointed by, or under, any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver, or manager shall be the representative of the person for the purposes of this Act.

    Sub-Section (3): Subject to sub-section (4), where a person is a non-resident person, the representative of the persons for the purpose of this Act for a tax year shall be any person in Pakistan:

    (a) who is employed by, or on behalf of, the non-resident person;

    (b) who has any business connection with the non-resident person;

    (c) from or through whom the non-resident person is in receipt of any income, whether directly or indirectly;

    (d) who holds, or controls the receipt or disposal of any money belonging to the non-resident person;

    (e) who is the trustee of the non-resident person; or

    (f) who is declared by the 1[Commissioner] by an order in writing to be the representative of the non-resident person.

    Sub-Section (4): No person shall be declared as the representative of a non-resident person unless the person has been given an opportunity by the 1[Commissioner] of being heard.

    Section 58B: Liability and obligations of representatives

    Sub-Section (1): Every representative of a person shall be responsible for performing any duties or obligations imposed by or under this Act on the person, including the payment of tax.

    Sub-Section (2): Subject to section 58 and sub-section (5) of this section, any tax that, by virtue of sub-section (1), is payable by a representative of a registered person shall be recoverable from the representative only to the extent of any assets of the registered person that are in the possession or under the control of the representative.

    Sub-Section (3): Every representative of a registered person who pays any tax owing by the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the representative’s possession or under the representative’s control.

    Sub-Section (4): Any representative, or any person who apprehends that he may be assessed as a representative, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the “principal”), a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such a representative or a person as to the amount to be so retained, such representative or person may obtain from the 1[Commissioner] a certificate stating the amount to be so retained pending final determination of the tax liability, and the certificate so obtained shall be his authority for retaining that amount.

    Sub-Section (5): Every representative shall be personally liable for the payment of any tax due by the representative in a representative capacity if, while the amount remains unpaid, the representative:

    (a) alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or

    (b) disposes of or parts with any moneys or funds belonging to the person that is in the possession of the representative or which comes to the representative after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.

    Sub-Section (6): Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the representative of the person has failed to perform.

  • Smuggling through ATT biggest threat to economic growth: PBC

    Smuggling through ATT biggest threat to economic growth: PBC

    KARACHI: Pakistan Business Council (PBC) in its budget proposals 2019/2020 has said that smuggling through Afghan Transit Trade is the biggest threat for economic growth of the country.

    “Smuggling through Afghan Transit Trade has always been the biggest threat for economic growth and hardly any sector has been left untouched by this menace,” the council said.

    Smuggled goods through the borders of Afghanistan, Iran, China, India and the Afghan Transit Trade from a chunk of the informal economy, volume of which ranges between 50-60 percent of the formal economy, the PCB said.

    “It is costing the national exchequer in billions. Markets across the country are flooded with smuggled goods and local industries are struggling for survival as smuggled goods are not only easily available everywhere but are also attracting the buyers who prefer foreign merchandise,” it said.

    The PBC suggested that goods moving under Afghan Transit Trade (ATT) from Pakistan to Afghanistan should be charged with duties and taxes under the Pakistani laws and the same should be transferred to Afghan government.

    Secondly, the duties and taxes so paid should be deposited with the State Bank in the US Dollar. Further, a quantitative restriction should be applied on goods moving under ATT on the basis of consumption.

    Giving rationale of the proposal, the PBC said that it would allow industry to fairly compete with unscrupulous imports, government to benefit from increased revenue.

    The PBC also suggested rationalizing import tariff to promote domestic manufacturing.

    The council said that the tariff structure had been distorted due to constant changes in the duty rates, the tariff structure was originally designed to support domestic manufacturing, however, changes in rates of import duties coupled with imposition of regulatory duty had led to situation where the tariff on finished products was less than that on the raw or intermediate goods.

    It said that a detailed tariff exercise with the objective of rationalizing the duty structure to promote domestic manufacturing was underway. Therefore, industry needs to be taken into confident in this matter.

  • DG Transit Trade announces auction of POL products on May 09

    DG Transit Trade announces auction of POL products on May 09

    KARACHI: Directorate General of Transit Trade, Karachi has announced auction of confiscated POL products to be held on May 09, 2019.

    In a notice issued on Tuesday, the directorate said that in order to dispose of auction able lots of petroleum, oil and lubricants (POL) products, lying at different container at terminals / wharves falling within the jurisdiction of the directorate, the oil/lubricant marketing companies are invited to offer their bids on the scheduled dates.

    The directorate will auction 25,000 liters of higher performance motor oil and 115 cartons of gear oil.

    The directorate also issued following terms and conditions for the auction:

    Auction will be as is whereas is basis;

    Only lube/oil marketing companies having valid registration with Oil and Gas Regulatory Authority (OGRA) shall be eligible to offer bid for POL products put to auction;

    Sealed bid offer(s) for motor oil and gear oils along with pay order(s) equal to 25 percent of the bid in favor of collector of customs, custom house, Karachi / Port Muhammad Bin Qasim, as the case may be, shall be furnished on the day of scheduled auction.

    Rest of the bid amount through bank draft shall be deposited within 07 days of the approval.

    Directorate General of Transit Trade, Custom House, Karachi reserves the right to accept or reject any bid without assigning any reason.

  • FBR reinstates nine customs officers into service on court order

    FBR reinstates nine customs officers into service on court order

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday reinstated nine customs officials into service following an order of Supreme Court of Pakistan.

    The FBR said that in pursuance of judgment dated November 26, 2018 passed by Federal Service Tribunal, Islamabad duly upheld by the Supreme Court of Pakistan through order dated April 17, 2019, the following officers, who were compulsorily retired from service through FBR notification dated May 08, 2017 are hereby reinstated into service with effect from May 08, 2017 i.e. the date of their compulsory retirement:

    01. Qaiser Khan Loni, ex-principal appraiser, Model Customs Collectorate Quetta.

    02. Muhammad Zaman Mazari, ex-Inspector, MCC Quetta

    03. Haji Zahir Ali, ex-Inspector, MCC Quetta

    04. Shireen Subhan, ex-Inspector, MCC Peshawar

    05. Muhammad Akram, ex-Inspector, MCC Quetta

    06. Faiz Muhammad Khoso, ex-Inspector, MCC Quetta

    07. Musa Kha Awan, ex-Inspector, MCC Quetta

    The FBR said that matter of back benefits for the intervening period from May 08, 2017 till their re-instatement, during which they remained out of service, would depend upon final outcome of denovo proceedings to be initiated against them in due course of time in the light of federal service tribunal judgment and the apex court order.

    The FBR said that in pursuance of judgment dated February 01, 2018 passed by Federal Service Tribunal, Lahore duly upheld by the Supreme Court of Pakistan dated April 04, 2019, the FBR’s notifications dated May 08, 2017 and Dated August 22, 2017 are hereby withdrawn and following officers of customs service are reinstated into service with effect from May 08, 2017 i.e. date of their removal from service:

    01. Waqar Ahmed Cheema, ex-Superintendent, Directorate of Intelligence and Investigation, FBR, Lahore

    02. Aziz-ur-Rehman, ex-Inspector, MCC Islamabad

    The FBR said that matter of back benefits for the intervening period from May 08, 2017 till their re-instatement, during which they remained out of service, would depend upon final outcome of denovo proceedings to be initiated against them in due course of time in the light of federal service tribunal judgment and the apex court order.

  • ABAD welcomes new chairman FBR

    ABAD welcomes new chairman FBR

    KARACHI: Association of Builders and Developers of Pakistan (ABAD), welcoming the appointment of a leading Chartered Accountant and tax expert Shabbar Zaidi as the Chairman of Federal Board of Revenue (FBR), has hoped that Shabbar Zaidi will bring in new strategy to solve problems of business community of the country as well as creating new venues for tax collection rather than taxing already taxed people.

    Chairman ABAD Muhammad Hassan Bakshi, Senior Vice Chairman Anwar Dawood, Vice Chairman Abdul Kareem Adhia and Chairman Southern Region Ibrahim Habib, in a statement, said that the PTI-led federal government has taken right decision by appointing a technocrat from private sector as Chairman FBR. This decision will have good impact on revenue generation and solution of tax-related problem as Shabbar Zaidi is well-known in business circles as well as in bureaucracy of FBR as a tax expert and provincial and federal governments used to take advice from him, they said. Recently, in an interview, Shabbar Zaidi had said that he will try his best to increase tax to GDP ratio from 13 percent to 26 percent.

    ABAD office-bearers said that widening tax net is necessary for more tax collection. They demanded of the federal government to announce and implement much-talked Tax Amnesty Scheme as soon as possible for boosting revenue collection.

  • FBR, traders discuss broadening of tax base

    FBR, traders discuss broadening of tax base

    ISLAMABAD: A Consultative Meeting between the Traders Associations and FBR representatives was held in the Broadening Tax Base Zone (BTB), Islamabad to find ways of broadening the tax base.

    The Consultative Meeting was chaired by Mir Badshah Khan Wazir, DG, BTB and was attended by Commissioner BTB (HQ) and Commissioner BTB Zone Islamabad.

    The BTB Zone Islamabad had invited Traders Association of G-11 Markaz and F-11 Markaz, Islamabad to seek business community’s views on broadening the tax base.

    The Traders Associations were represented by Aftab Gujjar and Mahar Khuda Dad, Presidents of Traders Associations of G-11 and F-11 Markaz respectively along with their office bearers.

    The Director General BTB apprised the participants about the significance of broadening of tax base in enhancing national tax revenue.

    He stated that due to smaller tax base, the burden gets shifted to existing taxpayers. He stressed on the need to have cooperation of trade bodies in the identification and enrollment of potential taxpayers and sought their help to hold facilitation camps in their respective areas.

    The representatives of trade bodies appreciated the initiative of DG BTB for holding the consultative meeting.

    They shared views on the difficulties’ faced by the business community in the enrollment and filing of returns.

    They advocated the idea of fixed tax regime for the small traders. They agreed to extend cooperation in holding awareness and enforcement camps of BTB Zone in their respective areas.

  • Equity market ends flat amid selling pressure

    Equity market ends flat amid selling pressure

    KARACHI: The equity market gained 25 points on Tuesday amid selling in major scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 35,631 points as against 35,605 points showing an increase of 25 points.

    First day of Ramadan started on a positive note, went up by 200 points and ended in green zone with 42 points (unadjusted).

    Nonetheless, several scrips including blue chips saw aggressive selling at bourse, such as SNGP, PSO, OGDC, KEL, HUBC etc. Banking sector, on the contrary, performed well with HBL closing near upper circuit whereas UBL was also seen trading near upper circuit.

    Banking sector topped with 12.4M shares, followed by Power (12M). Among scrips, KEL ranked first with 9.6M shares, followed by BOP (5.3M).

    Other scrips which generated volumes include SNGP, MLCF, HUBCR, and LOTCHEM.

    Sectors contributing to the performance include Banks (+190 points), Food (+17 points), Cement (-44 points), O&GMCs (-29 points), Power (-28 points), E&P (-21 points), Pharma (-16 points).

    Volumes declined again from 71.4mn shares to 65.4mn (-8 percent DoD). Average traded value also declined by 13 percent to reach US$ 19.4mn as against US$ 22.4mn.

    Stocks that contributed significantly to the volumes include KEL, BOP, SNGP, MLCF and HUBCR, which formed 37 percent of total volumes.

    Stocks that contributed positively include HBL (+86 points), UBL (+54 points), MCB (+28 points) NESTLE (+22 points) and NBP (+14 points). Stocks that contributed negatively include LUCK (-21 points), SEARL (-18 points), HUBC (-15 points), PSO (-13 points) and ENGRO (-12 points).