Pkrevenue.com

Category: Top stories

Find top stories in this section. Pakistan Revenue brings you the latest and most important news from Pakistan and around the world, keeping you informed with key updates and insights.

  • FBR launches online tax monitoring of steel products

    FBR launches online tax monitoring of steel products

    ISLAMABAD: The Federal Board of Revenue (FBR) has launched online monitoring of sales and purchases by steel sector.

    The FBR issued draft amendment to Sales Tax Rules, 2006 through SRO 541(I)/2022 dated April 22, 2022.

    READ MORE: FBR forms committee to resolve pharmaceutical tax issues

    The tax body proposed amendment to Rule 150FZ for electronic monitoring, tracking and tracing of production, import and supply of the goods.

    The FBR included the steel products in the list of online. At present products of six sectors already in the list, which are: tobacco products, beverages, sugar, fertilizer, cement and petroleum products.

    The FBR said that all the specified goods shall be monitored, tracked and traced in the manner provided in this Chapter and any other instructions, procedures and orders issued by the FBR.

    READ MORE: FBR allocates quota for industries in erstwhile FATA/PATA

    Further that the specified goods, if brought from non-tariff area as defined in the Federal Excise Act, 2005, shall be treated as imported goods for the purposes of this Chapter.

    The Rule 150ZH of the this chapter stated that goods to be affixed with tax stamps, banderoles, stickers, labels, barcodes, etc.–

    (1)On every package, including a tin, container or bottle, of the specified goods whether manufactured or imported shall be affixed or printed a tax stamp, banderole, sticker, label, barcode, unique identification marking, code], etc., hereinafter referred to as tax stamp, in the manner prescribed under this Chapter:

    Provided that in respect of such specified goods which are exempt or meant for export tax stamps whatever the case may be shall be clearly, legibly and indelibly marked as ‘Exempt Goods’ or ‘For Export’, as the case may be.

    READ MORE: FBR announces prize winners of 4th POS invoice draw

    (2) Every tax stamp required to be affixed under these rules shall bear such security features as are approved by the Board in order to–

    (a) prevent counterfeiting;

    (b) enable accounting of production of the specified goods; and

    (c) enable any person in the supply chain or an officer authorized by the Commissioner Inland Revenue to authenticate such tax stamp.

    (3) The system for imported goods shall be installed in a designated area at the port of importation or a customs bonded warehouse, as the case may be, declared by the importer for this purpose, or any other place approved by the Project Director:

    READ MORE: FBR takes measures to facilitate taxpayers in 1HFY22

    Provided that the Board may allow tax stamps to be affixed on any specified goods to be imported in a production facility in the exporting country, subject to such conditions as the Board may specify.

    (4) No person engaged in manufacturing, sale or purchase or handling of specified goods shall remove or tamper with the tax stamp affixed thereon until these are sold to the final consumer.

  • FBR urged to review minimum tax for OMCs, refineries

    FBR urged to review minimum tax for OMCs, refineries

    ISLAMABAD: Federal Board of Revenue (FBR) has been urged to review minimum tax regime under Section 113 of Income Tax Ordinance, 2001 of oil refineries and oil marketing companies (OMCs).

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2022/2023 recommended the FBR that the rate of minimum tax under section 113 of Income Tax Ordinance, 2001 should be reduced by 0.25 per cent each year from current rate of 0.75 per cent. Further, this rate should be applicable on gross profits instead of turnover.

    READ MORE: Mismatch identified in GST rates on supply, sales by IPPs

    The OICC further recommended that zero rating sales tax on Exports -Section 4(b) of Sales Tax Act, 1990: Clarity is required with respect to the definition of stores and provisions. Amendment suggested is as follows: “Supplies of stores and provisions including fuel for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in section 24 of the Customs Act, 1969 (IV of 1969)”.

    READ MORE: Tax rate rationalization proposed for exploration, production companies

    The OICCI highlighted issuance of Debit/ Credit Note and pointed out Section 7 read with Section 9 of Sales tax Act, 1990 states:  “Where a registered person did not deduct input tax within the relevant periods, he may claim such tax in the return for any of the six-succeeding period.”

    In the E&P Sector, provisional invoicing mechanism is adopted till the issuance of notification of Gas prices & execution of Oil & Gas Sales Purchase agreements. Normally this process takes more than a year and requires issuance of debit/ credit note on finalization. This results in complication when tax authorities are requested to allow condonation from six months period, and they take years to grant the said approvals.

    READ MORE: FBR urged to restore sales tax exemption on LED lights

    “Legislation be introduced in Sales tax Act specifically for E&P Sector allowing issue of Debit/ Credit notes after finalization of agreements with GOP. Also, issues of claiming input in six succeeding periods may be relaxed to six months from the date of notification by OGRA,” it recommended.

    Regarding, disallowance of input tax on sales to unregistered customer-Sub section (4) of section 73 of the Sales Tax Act, 1990, it recommended to exclude OMC’s and Electric Power and Gas Distribution Companies from the ambit of Sub section (4) of section 73 of the Sales Tax Act, 1990 as per power of FBR to exclude persons or class of persons.

    READ MORE: Minimum tax 0.2% suggested for listed chemical companies

  • Pakistan forex reserves inch up to $17.045 billion

    Pakistan forex reserves inch up to $17.045 billion

    KARACHI: Pakistan’s foreign exchange reserves inched up by $17 million to $17.045 billion by week ended April 16, 2022, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $17.028 billion a week ago.

    The official foreign exchange reserves of the State Bank also improved by $36 million to $10.886 billion by the week ended April 16, 2022 as compared with $10.85 billion a week ago.

    The foreign exchange held by commercial banks, however, fell by $19 to $6.157 billion by week ended April 16, 2022 as compared with $6.178 billion a week ago.

    Pakistan’s foreign exchange reserves have declined by around $10 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

    RELATED STORIES

  • Pakistan stocks fall 290 points on PKR devaluation

    Pakistan stocks fall 290 points on PKR devaluation

    KARACHI: Pakistan stocks have declined by 290 points on Thursday owing to further depreciation in Pakistan Rupee (PKR) against the dollar.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) ended at 45,653 points from previous day’s closing of 45,943, showing a decline of 290 points.

    READ MORE: Stocks slide 390 points on volatile exchange rate

    Analysts at Arif Habib Limited said that the market remained under pressure today due to further devaluation of PKR against the US Dollar and concerns over spikes in Market Treasury Bill yields.

    READ MORE: Dollar ends near PKR 187 in interbank market

    Despite opening in the green zone KSE-100 failed to sustain the positive zone as profit taking was observed. “In the last trading hour rally was witnessed in the refinery sector as PRL announced tremendous financial results beating analyst expectations.”

    Analysts at Topline Securities said that Pakistan equities had a direction less day today where the benchmark KSE 100 index kicked off the day in the green zone, made an intraday high at 46,067 (+124 points; up 0.27 per cent) and low at 45,600 (-343 points; down 0.75 per cent) before settling at 45,653 (-291 points; down 0.63 per cent) for the day.

    READ MORE: Pakistan stocks shed 206 points on profit taking

    During the day, ENGRO announced its 1Q2022 result where EPS clocked at Rs13.84 (-4 per cent YoY while up 67 per cent QoQ). Earnings was above industry expectations. In addition to this, the result also accompanied a dividend of Rs.12 per share. Moreover, above expected refinery sector companies (ATRL & PRL) results lured investors’ interest in both the names as they closed +2.31 per cent & +7.46 per cent, respectively.

    READ MORE: Pakistan stocks shed 62 points on profit taking

    Sectors contributing to the performance include Banks (-61.8 points), E&P (-37.3 points), Fertilizer (-35.3  points), Cement (-34.7 points) and Technology (-32.1  points)

    Volumes decreased from 235.0 million shares to 186.4 million shares (-20.7 per cent DoD). Average traded value also decreased by 29.8 per cent to reach US$ 30.1 million as against US$ 42.8 million.

    READ MORE: Weekly Review: Bullish trend likely to prevail

  • Dollar ends near PKR 187 in interbank market

    Dollar ends near PKR 187 in interbank market

    KARACHI: The US dollar continued to make gain against the Pakistan Rupee (PKR) on Thursday and ended near PKR 187 in interbank foreign exchange market.

    The exchange rate witnessed a decline PKR 1.05 in rupee value to close at PKR 186.97 to the dollar from previous day’s closing of PKR 185.92 in interbank foreign exchange market.

    READ MORE: Rupee falls Rs4.37 to dollar in fresh wave

    The dollar continued to make gain for the last four trading sessions. The greenback stronger by PKR 5.42 since April 16, 2022 when the exchange rate was PKR 181.55.

    It is pertinent to mention that the local currency made this recovery after touching all-time low at PKR 188.18 on April 07, 2022.

    The fresh wave of rupee depreciation has been attributed to import and external debt payments.

    The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

    READ MORE: Dollar climbs up to Rs184.44 at interbank closing

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low PKR 188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered PKR 6.63 against the dollar.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

  • Rupee falls Rs4.37 to dollar in fresh wave

    Rupee falls Rs4.37 to dollar in fresh wave

    KARACHI: The Pakistan Rupee (PKR) has lost Rs4.37 to the dollar during last three straight days on Wednesday.

    The rupee fell by Rs1.48 to the dollar on Wednesday to close at Rs185.92 as compared with previous day’s closing of Rs184.44 in the interbank foreign exchange market.

    READ MORE: Dollar climbs up to Rs184.44 at interbank closing

    The rupee lost around Rs4.37 against the dollar during past three trading sessions after making a sharp recovery to Rs181.55 on April 16, 2022. It is pertinent to mention that the local currency made this recovery after touching all-time low at Rs188.18 on April 07, 2022.

    The fresh wave of rupee depreciation has been attributed to import and external debt payments.

    The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

  • FBR forms committee to resolve pharmaceutical tax issues

    FBR forms committee to resolve pharmaceutical tax issues

    KARACHI: Federal Board of Revenue (FBR) on Wednesday constituted a committee for resolution of issues of pharmaceutical companies.

    The issues resolution committee will be headed by Chief Commissioner-Inland Revenue, Large Taxpayers Office (LTO), Karachi and comprising officers of FBR for resolution of issues of pharmaceutical companies.

    READ MORE: FBR allocates quota for industries in erstwhile FATA/PATA

    The committee comprises following officers:

    01. Shahid Iqbal Baloch, Chief Commissioner-IR, LTO Karachi (Head).

    02. Sabih ul Aijaz, Commissioner-IR, LTO Lahore.

    03. Masood Akhtar, Commissioner – IR, LTO Islamabad.

    04 .Abdul Jawwad, Commissioner – IR, LTO Karachi.

    READ MORE: FBR announces prize winners of 4th POS invoice draw

    05. Dr. Najeeb Ullah, Commissioner – IR, LTO Karachi.

    06. Dr. Muhammad Khurram, Additional Commissioner – IR, LTO Islamabad.

    07. Ms. Haida Sajjad, Deputy Commissioner-IR, CTO Lahore.

    08. Farrukh Aslam, Deputy Commissioner-IR, LTO Lahore.

    09. Anees Ahmed, Deputy Commissioner-IR, LTO Karachi.

    10. Sharjeel Ahmed, Deputy Commissioner-IR, LTO Karachi.

    12. Ms. Muntaha Saleem, Deputy Commissioner – IR, CTO Islamabad.

    13. Aziz Iqbal, IR Audit Officer, MTO Karachi.

    READ MORE: FBR takes measures to facilitate taxpayers in 1HFY22

    14. Muhammad Haider, Assistant Commissioner – IR, CTO Karachi.

    15. Naeem Akbar, Senior Auditor – IR, LTO Karachi.

    16. Shahid Rehan, Senior Auditor – IR, LTO Karachi.

    The Term of Reference (TOR) of the complaint resolution committee are:

    READ MORE: Tax incentive granted for revival of sick industrial units

    i. Review the nature of grievance/issue possible solution and take immediate action for its resolution;

    ii. Follow up with concerned field formation till issue is resolved;

    iii. Maintain complete record of complaints/issues, mechanism adopted for resolution and post resolution action required; and

    iv. Share data with the Board on monthly basis indicating issues received, issues resolved and issues pending for resolution and reasons for pendency.

  • Dollar makes sharp midday gain to reach PKR 186

    Dollar makes sharp midday gain to reach PKR 186

    KARACHI: The US dollar made a sharp gain against the Pakistan Rupee (PKR) to reach Rs186 during midday trading at interbank foreign exchange market.

    The dollar gained around Rs1.56 to reach Rs186 during the midday trading against the last day’s closing of Rs184.44 in the interbank foreign exchange market.

    READ MORE: Dollar climbs up to Rs184.44 at interbank closing

    Currency analysts said that due to import and external debt payments the local currency was under severe pressure.

    The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

    The fresh wave of rupee depreciation may be attributed to higher demand of the foreign currency for external debt repayment.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

  • Pakistan’s FDI falls to $1.28 billion in July – March

    Pakistan’s FDI falls to $1.28 billion in July – March

    KARACHI: The inflow of foreign direct investment (FDI) into Pakistan has declined by two per cent to $1.28 billion during first nine months (July-March) 2021/2022, according to detail released by the State Bank of Pakistan (SBP) on Tuesday.

    READ MORE: Foreign investment into Pakistan surges by 131%

    The country recorded the FDI inflow to the tune of $1.31 billion in the corresponding months of the last fiscal year.

    The portfolio investment recorded 30 per cent decline during the first nine months of the fiscal year 2021/2022. The capital market witnessed outflow of $341.7 million during the period under review as compared with $262.7 million during the same period of the last fiscal year.

    READ MORE: Foreign investment surges by 176% during July – January

    The total inflow of private foreign investment recorded 10 per cent decline to $943.4 million during July – March 2021/2022 as compared with $1.048 billion in the corresponding period of the last fiscal year.

    READ MORE: Pakistan’s foreign investment surges by 73% in 5 months

    The country witnessed massive jump in inflows under debt securities. The country received funds worth $502.6 million through sale of securities in the international markets during the first nine months of the current fiscal year as compared with $3.5 million outflows in the same period of the last fiscal year.

    The total foreign investment, including debt securities, grew by 38.4 per cent to $1.446 billion during July – March 2021/2022 as compared with $1.045 billion in the corresponding months of the last fiscal year.

    READ MORE: Carrefour enhances Pakistan investment to Rs10.5 billion

  • Mismatch identified in GST rates on supply, sales by IPPs

    Mismatch identified in GST rates on supply, sales by IPPs

    KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has identified mismatch in General Sales Tax (GST) rates between supply and sales resulting in excessive sales tax refundable build up.

    The OICCI in its proposals for budget 2022/2023 submitted to the Federal Board of Revenue (FBR), said that Independent Power Producers (IPPs) revenue mainly comprises of two components “Capacity Price Payment” (CPP) and “Energy Price Payment” (EPP).

    READ MORE: Tax rate rationalization proposed for exploration, production companies

    As per the current sales tax law output sales tax is only applicable on EPP as a result IPPs are not able to fully adjust the input sales tax charged leading to build up of sales tax refund.

    It is recommended that the IPP sector is already facing circular debt issues and in addition to that huge amount of Sales Tax Refunds are further worsening the working capital conditions of the industry. It is proposed that supply of fuel to IPPs (Coal/ Gas / HSD, etc.) should be exempted from Input Sales Tax.

    READ MORE: FBR urged to restore sales tax exemption on LED lights

    The OICCI said since 1994 the dividend income paid by Independent Power Producers (IPP’s) was subject to tax @ 7.5 per cent under the repealed Income Tax Ordinance, 1979 (ITO, 79). This was also the full and final tax in the hands of recipients and IPPs’ shareholders did not have to pay any additional tax when filing their tax returns, which have been revised as follows vide Finance Act 2019:

    i. In clause (a), the reduced tax rate of dividend of 7.5 per cent for power generation industry (covering power purchaser, producer, and supplier of coal to power producer) has been restricted to power producers only where such dividend is pass through under CPPA, and

    ii. Higher rate of tax of 25 per cent has been introduced under clause (c) of the said section for the Companies that have nil tax liability due to carry forward of losses, tax exemption or tax credits.

    READ MORE: Minimum tax 0.2% suggested for listed chemical companies

    Hence, in case of power producers (having non-pass-through agreements with CPPA) and coal suppliers, that previously enjoyed reduced rate under clause (a), the tax rate has been drastically increased from 7.5 per cent to 25 per cent due to exclusion from revised clause (a) and applicability of the new clause (c) as these entities are currently in tax holiday.

    It is recommended:

    i. Clause (a) of Division III of Part I of First Schedule as applicable before Finance Act 2019, should be reinstated, to include power producer companies (having non-pass-through agreements) and coal suppliers.

    ii. Similarly, amendment be made for the withholding tax rates specified in clause (a) of Division I of Part III of the First Schedule, by reinstating the position prior to Finance Act 2019.

    iii. The new clause (c) of Division III of Part I of First Schedule, inserted by Finance Act, 2019 be removed being against the fundamental principles of ITO, 2001.

    READ MORE: Proposals for capital gain on disposal of securities by insurance companies

    The chamber further informed that as a result of the passing of the Finance (Supplementary) Act, 2022 (“FSA”), the exemption provided to the power sector (“IPPs”) from payment of Sales Tax on the import of machinery and equipment provided under Table-3 of the Sixth Schedule to the Sales Tax Act, 1990 has now been withdrawn.

    Under various power policies, the GOP has guaranteed the exemption of sales tax on the import of plant and machinery till the Commercial Operations Date of the IPPs.

    It is recommended either the exemptions are restored or a proviso similar to the proviso inserted by the FSA in clause 132 Part I of the Second Schedule to the Income Tax Ordinance, 2001 be inserted.

    (Provided further that the exemption under Serial 4, 5 & 6 Table 3 of the Sixth Schedule to the Sales Tax Act, 19s90 shall be available to persons who entered into the agreement or letter of intent is issued by the Federal or Provincial Government for setting up an electric power generation project in Pakistan on or before the thirtieth day of June 2021 and who obtains a letter of support on or before the thirtieth day of June 2023.