Pakistan Revenue delivers the latest taxation news, covering income tax, sales tax, and customs duty. Stay updated with insights on tax policies, regulations, and financial developments in Pakistan.
KARACHI: Pakistan Tax Bar Association (PTBA) has recommended abolishing 12 different provisions of withholding income tax in order reduce the cost of business.
The apex tax bar of the country in its tax proposals for upcoming budget 2019/2020 recommended rationalization of withholding tax regime and in the first step it suggested eliminating 12 withholding tax rates.
The PTBA said that withholding tax regime significantly impacts the taxpayers and Inland Revenue Officers (IRO) alike.
On one hand, the regime increases the cost of doing business for a taxpayer and, on the other hand, it forces IROs to devote numerous resources in monitoring of withholding taxes.
The monitoring of taxes’ goal can be achieved by out sourcing the professional auditor firm and ability of the officer may be used for other work.
Even with the best efforts of the IROs, it is practically impossible to plug all the leakages of taxes withheld and deposit into the national exchequer.
“Globally the withholding tax regime is only applicable to persons whose income is difficult to determine, easier to evade or more likely to cross national boundaries. Currently, in Pakistan, withholding tax regime has been made applicable to almost all the categories of taxpayers and nature of payment under 49 provisions of law been weaved into the indirect taxes,” the PTBA said.
PTBA recommended revamping and rationalize of Withholding Tax Regime in order to reduce cost of doing business, complexity in the taxation laws and leakages in tax collection.
As a first step, it recommended following provisions of law may be withdrawn in which no substantial revenue is being collected in the last three years and eight months of current fiscal year:-
Sr. No.
Section
Description
2018-19 [Estimated on the basis of actual up to March, 2019]
2017-18
2016-17
2015-16
01
156B
Withdrawal of balance under Pension Fund.
100
136
86
76
02
235A
Domestic electricity consumption.
917
792
312
1,730
03
236B
Advance tax on purchase of air ticket.
559
484
303
495
04
236D
Advance tax on functions and gathering.
965
839
783
622
05
236F
Advance tax on cable operators and other electronic media.
49
24
19
21
06
236J
Advance tax on dealers, commission agents and arhatis etc.
136
123
123
109
07
236L
Advance tax on purchase of international air ticket.
1,131
1,257
1,331
999
08
236Q
Payment to resident for use of machinery and equipment.
644
619
328
174
09
236R
Collection of advance tax on education related expenses remitted abroad
KARACHI: Association of Chartered Certified Accountants (ACCA) has said that the existing sales tax rate of 17 percent in Pakistan is the highest in the region.
The existing rate of Sales Tax at 17 percent is one of the highest in the region with an average of around 12 percent in Asia (15 percent in India and Bangladesh, 10 percent in Indonesia and just 6 percent in Malaysia), ACCA said in its tax proposals for budget 2019/2020.
Sales Tax should be used to broaden the tax base and not as a replacement of direct taxation.
In order to avoid the net negative costs for the economy, the rate should be brought down to single digit in a phased manner with a proposed reduction to 14 percent.
The association also recommended harmonization of inter-provincial and federal-provincial taxation for avoiding double taxation.
It said that the conflicts between various provincial revenue authorities and the federation are resulting in double taxation of services owing to the classification and jurisdiction disputes.
Also, standardizing the applicable rates while also reducing them could facilitate the businesses while also increasing the tax revenues simultaneously.
Similarly, the lack of inter-provincial harmonization also results in double taxation of services owing to the classification and jurisdiction disputes.
These issues should be resolved to create a business-friendly environment and facilitate the tax-payers.
Point of origination or deliverance of services can be agreed upon by all revenue authorities as the basis of classification and the resulting jurisdiction to resolve the major inconvenience to the taxpayers.
The ACCA highlighted the issue of adjustable input tax and said with the introduction of the STRIVE system resulting online matching of invoices, the chances of sales tax fraud and/or error have been minimized.
Therefore the current restriction of limiting the input tax adjustment to 90 percent (ninety percent) of the output tax is outdated and needs to be abolished.
This will be in line with the principles of fairness, equity and justice for all and help restore the confidence of businesses.
The association also pointed out revision of sales tax return and said this should be made easy and automated as with the STRIVE system in place, chance of tax fraud are minimized to the maximum possible extent as claimed by FBR.
It further pointed out that in line with the principles of fairness, equity and justice for all, the appeals should be heard by a person not under the administrative jurisdiction/influence of FBR.
KARACHI: Federal Board of Revenue (FBR) has been recommended to exempt income tax on mortgage loans in order to facilitate salaried persons.
Currently the loans obtained from the employer below Benchmark interest rate is subject to tax, said Institute of Chartered Accountants of Pakistan (ICAP) in its tax proposals for budget 2019/2020.
It recommended that the taxation of marginal income on loans obtained from the employer below benchmark rate should be exempted by deleting sub-section (7) of Section 13 of Income Tax Ordinance, 2001.
Alternatively, the minimum threshold of the loan amount on which the provisions of Section 13(7) would not be attracted, should be raised to at least Rs2,500,000 from the existing limit of Rs1,000,000.
Moreover, current benchmark rate of 10 percent of much higher than the prevailing KIBOR rates, therefore, benchmark rate should be reduced suitably to somewhere near KIBOR rate.
“Alternatively, at least the mortgage loans should be exempted from the operation of Section 13(7) of the Income Tax Ordinance, 2001.”
The institute said that this is not a significant source of revenue for the Government on the one hand and very rigid piece of legislation on the salaried taxpayer on the other hand who are hard hit by the present economic situation.
The taxation of this notional income is highly unjust since it taxes the notional income of the salaried person, which is against the basic principle of taxation since this notional income will never ever be received by the taxpayer.
Similar notional income in the hands of employees of educational institutions, restaurants, hospitals, clinics etc. is already exempt under clause (53A) of Part I of Second Schedule.
The rationale underlying this proposal is that:
a) It will boost the housing industry since in today’s economic situation and the presence of speculators in the property market it is next to impossible for a salaried employee to own a house on commercial mark-up rates. Once this industry takes off there will be provision of cheap houses and there will be increase in tax revenue from housing and allied sector;
b) It will contribute in enhancing the national economic activity by extending affordable loans and advances to middle class income group of society;
c) It will remove detrimental financial ramifications due to incremental rate of interest on notional income for all other salaried persons, who are already facing a tough challenge to survive within their paltry resources- all legally declared and tax paid; and
d) The FBR is also cognizant of this fact by stating in Clause (53A) that “any other perquisite or benefit for which the employer does not have to bear any marginal cost; and the Circular Letter 4(8)IT-J/91 dated June 30, 1991 issued by then CBR opines that “…it is not desirable to tax such notional income…”. The same principle should be applied in this situation.
SLAMABAD: The amnesty scheme announced by the government for foreign and domestic undeclared assets a day earlier has been launched through promulgation of presidential ordinance on Wednesday.
Following is the text of the presidential ordinance:
An ORDINANCE
To provide for voluntary declaration of undisclosed assets, sales and expenditure
WHEREAS there is a reportedly large scale non-declaration of assets, sales and expenditure;
AND WHEREAS it is expedient to —
a) Allow the non-documented economy’s inclusion in the taxation system; and
b) Serve the purpose of economic revival and growth by encouraging a tax complaint economy;
AND WHEREAS the Senate and the National Assembly are not in session and the President of the Islamic Republic of Pakistan is satisfied that circumstances exist which render it necessary to take immediate action;
NOW, THEREFORE, in the exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the following Ordinance:-
1. Short title, extent and commencement:
(1) This Ordinance shall be called the Assets Declaration Ordinance, 2019.
(2) It shall extend to the whole of Pakistan.
(3) It shall come into force at once.
2. Definitions:
(1) In this Ordinance, unless there is anything repugnant in the subject or context, —
(a) “assets” means all domestic and foreign assets of every kind ;
(b) “Board” shall have the same meaning as defined in clause (8) of section 2 of the Income Tax Ordinance, 2001 (XLIX of 2001);
(c) “court of law” means a High Court or Supreme Court of Pakistan;
(d) “declarant” means a person making a declaration under section 5;
(e) “holder of public office” means a person as defined in the Voluntary Declaration of Domestic Assets Act, 2018 or his benamidar as defined in the Benami Transactions (Prohibition ) Act, 2017 (V of 2017) or their spouses and dependents;
(f) “undisclosed assets “ includes benami assets as defined in the Benami Transactions (Prohibition ) Act, 2017 (V of 2017) and any assets the value of which has been unreported, under-reported or understated;
(g) “undisclosed expenditure” means any unexplained or unaccounted expenditure under the provisions of the Income Tax Ordinance, 2001 (XLIX of 2001) up to the tax year 2018, which has not been declared in the return of income or for which a return of income has not been filed and such expenditure is not accounted for;
(h) “undisclosed sales “ means sales or supplies chargeable to sales tax or federal excise duty under the Sales Tax Act, 1990 or the Federal Excise Act, 2005, respectively, which were not declared or have been under-declared up to 30th June, 2018.
(2) All other words and expressions used but not defined in this Ordinances shall have the same meaning assigned thereto under the Income Tax Ordinance, 2001 (XLIX of 2001), the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Benami Transactions (Prohibition) Act, 2017 (V of 2017) and the rules made thereunder.
3. Declaration of undisclosed assets, sales and expenditure:
Subject to the provisions of this Ordinance, any person may make, on or before 30th June, 2019, a declaration only in respect of any .
(a) Undisclosed assets, held in Pakistan and abroad, acquired up to 30th June, 2018;
(b) Undisclosed sales made up to 30th June, 2018.
(c) Undisclosed expenditure incurred up to 30th June, 2018; or
(d) Benami assets acquired or held on or before the date of declaration;
Explanation. It is clarified that the benefit under this Ordinance shall also be available where.
(a) Any proceedings have been initiated or are pending or where any income has been assessed under the Income Tax Ordinance, 2001 (XLIX of 2001), which are relatable to undisclosed assets or expenditure except where the matter has attained finality;
(b) Any proceedings have been initiated or are pending or have been adjudicated under the Sales Tax Act, 1990, or the Federal Excise Act,2005 which are relatable to any undisclosed sales or supplies except where the matter has attained finality.
4. Charge of Tax and default surcharge:
(1) The undisclosed assets shall be chargeable to tax and default surcharge at the value mentioned in section 5 and at the rates specified in the Schedule to this Ordinance.
(2) The undisclosed sales and expenditure shall be chargeable to tax and default surcharge at the rates specified in the Schedule to this Ordinance.
5. Value of Assets. Value of Assets
(a) In case of domestic immovable properties shall be the price not less than-
(i) 150 percent of the FBR value notified under sub-section (4)of section 68 of the Income Tax Ordinance, 2001 (XLIX of 2001); or
(ii) 150 percent of the DC value, where FBR value has not been notified or the FBR value is less than the DC value; or
(iii) 150 percent of FBR value notified under sub-section (4) of section 68 of the Income Tax Ordinance, 2001 (XLIX of 2001) for land and 150 percent of DC value for constructed property , where FBR value has not been notified for constructed property.
(b) In case of all oher assets, shall be the price which the assets would ordinarily fetch on sale in the open market on the date of declarationbut in no case shall be less than the cost of acquisition of the assets;
Provided that in case of foreign assets, the fair market value shall be determined at the exchange rate prevalent on the date of declaration.
Explanation: It is clarified as follows –
(a) In case any declarant has already filed a declaration in respect of any immovable property under the Income Tax Ordinance, 2001, or the Voluntary Declaration of Domestic Assets Act, 2018 and wishes to enhance the declared value of the said immovable property, he may file a declaration under this Ordinance in terms of the value mentioned in section 5 and above;
(b) In case a person has already filed a declaration in respect of any immovable property which is in line with section 68 of the Income Tax Ordinance, 2001, or the Voluntary Declaration of Domestic Assets Act, 2018 no further proceedings or action will be initiated against him in view of provisions of this Ordinance, in particular section 5 thereof.
6. Time for payment of tax:
(1) The due date for payment of tax chargeable under this Ordinance shall be on or before 30th June, 2019.
Provided that after the due date under this sub-section, the tax shall be payed on or before the 30th June, 2020 along with default surcharge at the rates given in clause (2) of the schedule to this Ordinance.
(2) The tax in respect of foreign assets or foreign currency held in Pakistan shall be paid in foreign currency according to the procedure prescribed by the State Bank of Pakistan, in the mode and manner provided in section 9.
(3) If a person fails to pay tax and default surcharge according to this section, the declaration made shall be void and shall be deemed to have never been made under this Ordinance.
(4) Notwithstanding the provisions of clause (g) of section 11, in case of outstanding demand at the time of filing of declaration, the declarant may pay the amount of such tax determined by the Officer of Inland Revenue, under the provisions of the Sales Tax Act, 1990 or the Income Tax Ordinance, 2001 (XLIX of 2001), or the Federal Excise Act, 2005, without payment of default surcharge and penalty.
7. Incorporation in books of account:
(1) Where a declarant has paid tax under section 6 in respect of undisclosed assets, sales and expenditure the declarant shall be entitled to incorporate such assets, sales and expenditure in his return, wealth statement or financial statement irrespective of the fact that the assets, sales or expenditure were relatable to a year which is barred by time for the purpose of revision of return of income or wealth statement, as a case may be.
(2) No allowance, credit or deduction under any law for the time being in force shall be available for assets so incorporated.
8. Conditions for declaration. The declaration made shall be valid if-
(a) Cash held by the declarant is deposited into a bank account in the manner specified at the time of declaration and is retained in such bank account upto the 30th June, 2019; or
(b) The foreign currency held in Pakistan declared under section 3 is deposited into declarant’s own foreign currency bank account at the time of declaration and is retained in such account till 30th June, 2019; or
(c) The repatriated foreign liquid asset is deposited into declarant’s own Pak Rupee account or his foreign currency bank account in Pakistan or is invested into Pakistan Banao Certificates or any foreign currency denominated bonds issued by the Federal Government; or
(d) Foreign liquid assets not repatriated to Pakistan shall be deposited in declarant’s foreign bank account on or before the 30th June, 2019.
9. Mode and manner of repatriation of assets held outside Pakistan and payment of tax thereon.
The State Bank of Pakistan shall notify the mode and manner of-
(a) Repatriation of assets to Pakistan;
(b) Deposit of tax in foreign currency through State Bank of Pakistan; and
(c) Method of conversion of value of assets held outside Pakistan in Pak rupees.
10. Tax paid not refundable.
Any amount of tax or default surcharge paid under the provisions of this Ordinance shall not be refundable.
11. Ordinance not to apply to certain persons, assets or proceedings.
The provisions of this Ordinance shall not apply to:
(a) Holders of public office;
(b) A public cmpany as defined under clause (47) of section 2 of the Income Tax Ordinance, 2001;
(c) Any proceeds or assets that are involved in or derived from the commission of a criminal offence;
(d) Gold and precious stones;
(e) Bearer prize bonds;
(f) Bearer securities, shares, certificates, bonds or any other bearer assets; or
(g) Proceedings pending in any court of law.
12. Declaration not admissible in evidence:
Notwithstanding anything contained in any other law for the time being in force, nothing contained in any declaration made under this Ordinance shall be admissible in evidence against the declarantfor the purpose of any proceedings relating to imposition of penalty or adverse action or for the purposes of prosecution under any law.
13. Misrepresentation:
Notwithstanding anything contained in this Ordinance, where a declaration has been made by misrepresentation or Suppression of facts, such declaration shall be void and shall be deemed to have been never made under this Ordinance.
14. Confidentiality:
(1) Notwithstanding any other law for the time being in force including the Right of Access to Information Act, 2017 (XXXIV) and sub-section (3) of section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001), execpt the provisions of clauses (a) and (g) of sub-section (3) of section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001), particulars of any person making a declaration under this ordinance or any information received in any declaration made under this Ordinance shall be confidential.
15. Power to make rules:
The Board may be notification in the official Gazette make rules for carrying out the purposes of this Ordinance including the manner, procedure payment of tax and conditions under which the declaration under this Ordinance shall be filed.
16. Ordinance to override other laws:
The provisions of this Ordinance shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force.
17. Removal of difficulties:
If any difficulty arises in giving effect to the provisions of this ordinance, the Federal Government may, by notification in the official Gazette, remove such difficulty as is inconsistent with the provisions of this ordinance.
THE SCHEDULE [see section 4]
Rates of Tax
1. The rates of tax imposed on undisclosed assets, sales and expenditures shall be as specified in the following Table, namely:
Table
S. No
Undisclosed assets, sales or expenditures
Rate of tax
(1)
(2)
(3)
1.
All assets except domestic immovable properties
4 percent
2.
Domestic immovable properties
1.5 percent
3.
Foreign liquid assets not repatriated
6 percent
4.
Unexplained expenditure
4 percent
5.
Undisclosed sales
2 percent
Rates of Default Surcharge
2. The amount of tax under clause (1) of the Schedule shall be increased by a default surcharge by amount percentage as specified in the following Table, namely:
Table
S. No
Time of payment of tax
Rate of default surcharge
1.
If the tax is paid after the June 30, 2019 and on or before the September 30, 2019
10 percent of the tax amount
2.
If the tax is paid after September 30, 2019 and on or before December 31, 2019
20 percent of the tax amount
3.
If the tax is paid after the December 31, 2019 and on or before the March 31, 2020
30 percent of the tax amount
4.
If the tax is paid after March 31, 2010 and on or before June 30, 2020
KARACHI: Pakistan Tax Bar Association (PTBA) has suggested the Federal Board of Revenue (FBR) to outsource the preparation of profiling potential taxpayers to a data mining company for broadening of tax base.
The PTBA in its tax proposals for budget 2019/2020 suggested the tax machinery that the assignment of preparation of profile of potential taxpayers/registered person be out sourced to a data mining company in line with the responsibility of collection of tax on capital gains given to the National Clearing Company of Pakistan.
“This company should only be allowed to collect the following information and present the potential taxpayer’s profile to the FBR’s BTB department to take appropriate action in accordance with law.”
The PTBA said that Pakistan was facing a challenge with regards to the widening of the current tax base to prevent tax-revenue erosion.
Although in the current year number of Active Taxpayer has improved; however since many years, Pakistan’s registered tax base has been more or less stable at less than 1 percent of the total population.
Over the last few years, the concept of filers and non-filers has been introduced in order to encourage increased filing of returns of income.
However, such amendments have not been able to increase the tax base by many folds as envisaged.
On the other hand has increased the burden of withholding agents by prescribing different withholding rates based on the Active Taxpayers List without achieving any significant progress inroads on the actual tax compliance rates.
In reality bulk of the increased cost due to higher tax rates for non-filer, has been passed on by the unregistered persons to the end consumer by enhancing cost of goods /services to gross up the impact of higher withholding.
The PTBA also proposed that a new team comprising of young IT expert, Accountants and Tax experts should be hired for BTB department.
A task force comprising of independent professionals and top officials be formed to monitor the work assigned to the data mining company and ensure that the BTB department operates efficiently and effectively to ensure the progress in broadening of tax base activity by FBR.
The effective enforcement should be made in accordance with Section 114 of the ITO. The government and FBR on its part should ensure that the relevant provisions of law are implemented in letter and spirit without any distinction on the basis of cast, creed, color and clout to achieve the goal of broadening the tax base.
A complete profile consisting of CNIC, Firm/Company registration-wise of the taxpayer may be prepared generated by maintaining a data base of all the:-
Owners and holders/allottee of the industrial, commercial, residential and agriculture properties;
Private motor vehicles;
Club membership;
International traveling;
Utilities;
credit cards;
investment in bank deposits;
Investment in national saving schemes;
investments in Capital Market; and
Major expenditure (i.e. Rs.300,000/- & above) incurred on account of hospitalization, parties at hotels and schooling of dependents.
Submission of quarterly statements by the Registrars & Housing Societies for registration/transfer of Immovable Property (Industrial Commercial, Residential & Agricultural), Motor Vehicle Registration Authorities, Clubs (Private & Public), Credit Card issuing authorities, Central Depository Company, National Clearing Company of Pakistan, large scale private hospitals, hotels & schools and Financial Institutions distributing profit more than statutory taxable limit or granted commercial loans, should be made mandatory.
Jurisdiction other than Company should, for some time, be reverted strictly to geographical basis to avoid duplication and slippages of potential tax filers.
Tax credit at the rate of 5% be restored and provided to those taxpayers whose 90% Sales and Purchase of Goods are from persons who are registered as Sales Tax and Income Tax taxpayers.
The PTBA said that the proposed amendments would result in increased visibility of potential taxpayers and incentivize registration with the tax authorities without increasing the burden on existing taxpayers.
ISLAMABAD: The federal government finally announced tax amnesty scheme 2019 for people having undisclosed assets to become part of documented economy. The scheme has been announced at four percent of tax to declared hidden assets other than immovable properties.
The scheme is available for Pakistani citizens who have evaded taxes other than public office holders.
The scheme will be applicable till June 30, 2019, Advisor to Prime Minister Finance, Dr Abdul Hafeez Shaikh said at a press conference while announcing the scheme after its formal approval by the federal cabinet on Tuesday.
The advisor was accompanied by Special Assistant to the Prime Minister on Information and Broadcasting, Dr Firdous Ashiq Awan, State Minister for Revenues, Hammad Azhar and Federal Board of Revenue Chairman Syed Shabbar Zaidi.
“Basic purpose of the scheme is not to generate revenue but to document economy and make the dead assets functional to promote economy,” Shaikh said.
The advisor urged the business community to participate in this amnesty scheme to document their concealed assets.
Inviting all such people who had their undeclared assets to take benefit from this scheme, the Advisor said this was the last chance as the government had already imposed the Benami Law under which all such benami properties would be confiscated by the government.
He said efforts have been made to make the scheme easy in understanding as well as implementing.
He said all assets were included in the scheme inside or outside Pakistan. All assets other than real estate, would have to pay four percent to get these legalized.
In case of real estate, it would be evaluated at 1.5-time on existing FBR value, to bring it to market value he said.
For Pakistanis living abroad, the advisor said that they can pay four percent to legalize their money subject to bringing cash or other kind into Pakistan.
Otherwise they would have to pay 6 percent to legalize their assets, he added.
Minister of State for Revenue Hammad Azhar said there was a lot of difference between the current and previous amnesty schemes as for the first time there was a condition for all asset declarer to become tax filer besides giving option to all such people to revise their balance sheet in their tax returns.
ISLAMABAD: The offices of Inland Revenue have been barred from taking harsh action against tax defaulters such as suspending registration and raiding business premises on suspicions of tax evasion.
The newly appointed chairman of Federal Board of Revenue (FBR) Shabbar Zaidi issued more directives on Tuesday to restrict the IR officers for using discretionary powers.
The federal government appointed the chairman from private sector for enhancing revenue collection through strengthening operation side. The policy side of taxation matters has already been with the ministry of finance.
The chairman soon after assuming the charge issued directives to the field offices of the FBR that no bank account would be attached of a taxpayer without informing 24 hours prior taking any action. Further obtaining permission from FBR chairman has been made mandatory for freezing any bank account.
The chairman on Tuesday issued more instructions to the field offices of Inland Revenue, which stated: “There will be no suspension from active taxpayers list unless there is personal interaction with CEO/owner of the business 24 hours before suspension, list of all cases of suspension after suspension will be sent to chairman FBR and Member IR operations with reasons of suspension and evidence of personal interaction as discussed above.”
The chairman further directed: “There will no be no raid or any premises of any existing taxpayer without prior approval of Member IR Operations and Chairman. If there are evidences of economic transactions which are chargeable to tax and the organization/entity is not a tax registered person then officer of that jurisdiction will report it to the Member IR Operations and Chairman FBR who will provide necessary direction for future course of action.”
KARACHI: Federal Board of Revenue (FBR) has been advised to make it mandatory the declaration of source of funds for foreign remittances.
Association of Chartered Certified Accountants (ACCA) in its tax proposals for budget 2019/2020 recommended changes to Section 111(4) of Income Tax Ordinance, 2001 regarding foreign exchange remitted from outside Pakistan.
The association recommended amendment:
“to any amount of foreign exchange remitted from outside Pakistan through normal banking channels that is encashed into rupees by a scheduled bank and a certificate from such bank is produced to that effect … and a declaration along-with evidence of the source of funds.”
It said that this will continue to promote the inflow of foreign exchange remittances towards the country while stopping the misuse of the provision to whiten/launder black monies and de-incentivizing genuine tax paying businesses.
“This way, the ‘non enquiry’ clause which has been extensively abused, will be abolished sans the current monetary limit while still retaining the tax relief for foreign exchange remittance.
The ACCA further said that the minimum tax on turnover is charged irrespective of the net profit or loss.
This often gives rise to a situation where businesses end up paying double taxes on their revenues and profits as well as loss making businesses facing additional cash-flow pressures by paying this tax.
The current rate of 1.25 percent applicable generally except for a few sectors, should be brought down to 0.4 percent.
The now deleted exception in case of a gross loss needs to be reinstated in line with the principles of natural justice and equity.
This will facilitate the business eco-system contributing to a growth in GPD which can lead to increased revenue collections for the treasury.
The association further highlighted Section 138 and 140 of the Ordinance regarding recovery of tax through attachment of bank accounts and/or property or arrest.
It said that currently, the allowance for the commissioner to attach the property of the taxpayer before expiry of notice period on “satisfaction” of the commissioner regarding possible removal, cancellation or disposal of attachable property is misused in many cases to harass the businesses.
This change can bring an end to this, increase taxpayers’ trust in the tax apparatus and improve the ease of doing business in the country.
“Any such attachment of any movable/immovable property before expiry of the notice period may only be authorized by the Commissioner in the presence of objective evidence, which should be shared with the taxpayer.”
KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of four freight forwarders for defaulting payment and non-compliance of filing sales tax returns.
The SRB issued suspension notices to the following freight forwarders:
Muhammad Rafique (M/s. Rafique Brothers)
M/s. Prime Ocean Cargo Management Company (Pvt) Limited
M/s. Shahnoor Weavers
Muhammad Tahir Imam (M/s. ST Logistics International)
The SRB said that Muhammad Rafique (M/s. Rafique Brothers) had failed to make payment of Sindh Sales Tax on Services for the period from July 2011 till to date. Further the company also failed to file return electronically for the tax periods February 2017 to December 2018 and July 2011 to April 2013.
The SRB asked the company that the notice would be revoked in case it takes remedial action by May 24 by making payment and filing true and correct returns for the said periods. Otherwise the case shall be proceeded for cancellation in case remedial action was not taken by May 25, 2019.
In case of M/s. Prime Ocean Cargo Management Company (Pvt) Limited, the SRB said that the company had failed to file returns for the period July 2016, December 2015, March 2015, June 2013, March 2013, September 2012, August 2012, June 2012, May 2012, April 2012, March 2012, February 2012, January 2012, December 2011, October 2011, September 2011, August 2011, July 2011.
The SRB directed the company to take remedial action by May 24, 2019. “In case of non-satisfactory response or failure to take remedial measures as suggested above on or before May 25, 2019 the case shall be further preceded for cancellation of registration wit the SRB.”
In the case of M/s. Shahnoor Weaver, the SRB said that the company had failed to make payment since July 2011 till date. Further, the company had failed to e-filer sales tax returns for tax periods from July 2011 to June 2015 and from August 15 to December 2018.
The SRB directed the company to take remedial action by May 26, 2019. “In case of non-satisfactory response or failure to take remedial measures as suggested on or before May 27, 2019, the case shall be further preceded for cancellation of registration with the SRB.”
In the fourth case of Muahmmad Thair Imam (M/s. ST Logistics International), the SRB said that the company had failed to make payment of sales tax on services from July 2011 till date. Further, the company also failed to e-filer sales tax returns for the said period.
The SRB has directed the company to take remedial action by May 23, 2019. “In case o non-satisfactory response or failure to take remedial measures as suggested on or before May 24, 2019 the case shall be further preceded for cancellation of registration wit SRB,” it added.
KARACHI: Pakistan Customs on Monday launched the swift consignment clearance software for improving ease of doing business and trading across the border indices of the country.
The system namely ‘WeBOC Global’ was inaugurated by Member Customs Dr Jawwad Uwais Agha at Custom house, Karachi.
He introduced the key features of the newly developed ICT system which was attended by a large number of the senior officers of Pakistan Custom and members of the WeBOC-Glo Project team.
The new version of Customs clearance system was deployed at early in the morning May 13, 2019 which has immediately replaced the previous version of WeBOC clearance system.
This will be a modern and technologically advanced version of WeBOC which is an end to end automated online goods clearance system home grown by Pakistan Customs in 2011.
With the introduction of new WeBOC system, the Custom clearance system of Pakistan will enter into the club of modern, upgraded and technologically advanced Custom clearance system of the world, the Member said.
The WeBOC-Glo in addition to new modules and functionalities will be plugging the deficiencies of earlier clearance system pointed out during the course of time in internal reviews and ICT Gap Analysis by the World Bank.
Components of Release 1.0 of the WeBOC-Glo were introduced by Iftikhar Ahmad, Collector/Convener of the project which included 13 modules and functionalities.
The major modules included:
(1) the Development of Electronic Data Interchange (EDI) with Terminal Operators for Export LCL Cargo, which will reduce dwell time at ports
(2) the Quota Management of Bulk Export Cargo, which will facilitate auto debiting of assigned quota,
(3) the establishment of IT interface with Ministry of Foreign Affairs for automation of Exemption Certificates,
(4) the availability of WeBOC Glo on Chrome and Edge to provide convenience to users,
(5) the enhanced Security Features, to safeguard the User IDs and relevant data of importers /exporters,
(6) the unified Screens for MIS Officers, to ensure speedy processing,
(7) the search engine for TARIFF and relevant SROs to empower users in Tariff and import/export policy information for correct filling and assessment of GDs,
(8) the update on Containers Status, to allow traders the facility to keep track of containers,
(9) Improved User Interface, aimed at making the system more user friendly and less time consuming and
(10) the Glo Insight which strengthens the statistical Scrutiny and monitoring of Customs transactions through business intelligence and data analysis tools for informed decisions making.
In addition to above, the WeBOC-Glo will be instrumental in closure of old Customs clearance system by automating areas that had remained outside its scope so far.
(1) the Export Processing Zone, whose import and export clearance along with the role and functions of EPZA have been automated for the first time,
(2) the GD Filing Without NTN, which will facilitate individual importers, Small and Medium Enterprises (SME) promoting e-Commerce in Pakistan,
(3) the Exceptional GD Filing, which caters to all scenarios where auto clearance were held up due to peculiar taxation regimes on items or specific orders of superior courts.
The team has been further instructed by Dr Agha to plan launch of Release-2of WeBOC Glo by the first week of July, 2019.
The Release-2 will include further important modules like DTRE, Bulk Exports and Exports through Courier.
With the development of these modules all the processes related to export will be fully automated which will definitely facilitate export sectors.
Release-2 will also include E-Auction Module, for auction of confiscated goods in line with modern concepts of Auction.
Oil imports contribute the major share in Imports Bill. All the processes like Import, storage, transportation and transit of Oil will also be covered in Release-2 Similarly PCA Entity based Audit module will also be part of it, which will dramatically enhance money trial analysis and be handy in detection of money laundering.
Initial work has already been done on these modules and they are under different stages of development.
Some less important modules will be launched in Release-3 by Mid September which will complete automation of all the Customs processes under WeBOC-Glo.
Earlier, Dr Jawwad Agha conceived the idea of up gradation and functionally advanced new Customs system and had put in place a two tier setup, the WeBOC-Glo Domain team and Oversight and Approval Team, in December, 2018.
In view of highly technical nature of the task officers having vast professional experience and well grounded in automated work environment were grouped together.
The team lead by Collector Dr. Iftikhar Ahmad (project team leader) included: Additional Collectors Shafqat Niazi, Sanaullah Abro, Ms Mona Mehfooz, Ali Zaman Gardezi and Deputy Collector Ms Nausheen Riaz Khan.
The project team leader said that packed and strict timeline was given to undertake the Businesses Process Re-Engineering (BPR), development of new modules and functionalities of the WeBOC Glo.
He added that the project team had to put in long hours on weekend, over and above their regular work assignments, to meet the deadlines, while Agha continuously monitored the progress and provided his full support to project team. Within short time of four months, WeBOC-Glo project team under guidance of oversight and Approval team, consisting of senior officers of Customs succeeded in accomplishing the task of development of 13 different modules and functionalities of new version.
User Acceptance Tests (UATs) with relevant stakeholders have been completed too. The PRAL’s Business Analysis and software Development Units provided able resource support and remained instrumental in the achievement.
With the launch of the WeBOC-Glo, the Customs department moves further ahead as the leading public sector organization mag use of modern technology for hassle free public service delivery.
The system ensures transparency, efficiency, professionalism and further reduces the interaction with taxpayer besides providing tech ability for future integration with artificial intelligence for RMS analysis.
