In an effort to provide clarity and streamline the taxation of digital payments, recent amendments have been made to the Income Tax Ordinance, 2001, through the Finance (Supplementary) Act, 2022.
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SBP warns banks of penal action for delaying transaction alerts
KARACHI: State Bank of Pakistan (SBP) on Monday warned commercial banks of harsh penal action for delaying transmitting transaction alerts to their account holders.
The SBP issued a circular related to security of digital payments. The central bank said that earlier on November 28, 2018, it issued guidelines wherein the banks and microfinance banks (MFBs) were directed to send free of cost transaction alerts to their customers through both SMS and email (where email addresses of customers are available) for all international and domestic digital transactions including but not limited to ATMs, POS terminals and Internet banking transactions.
READ MORE: SBP wins IFN global award for promoting Islamic finance
It was also mentioned that such transaction alerts shall be generated and relayed to the customers immediately after execution of the transaction.
“However, it has been observed that these instructions are not being meticulously complied with; and customers do not receive SMS alerts immediately despite posting of transactions in their accounts resulting in non-compliance of regulatory instructions as well as causing difficulty for sender and receiver of funds,” the SBP said.
READ MORE: Bank deposits surge to historic high at Rs20.97 trillion
Similarly, a number of times, customers also do not receive their One-Time Passwords (OTPs) via SMS on time due to which they face difficulty in completing their transactions.
Banks/MFBs are henceforth advised to ensure that all OTPs as well as SMS alerts for financial transactions are generated and sent immediately after customers’ accounts are either debited or credited.
In addition, customers shall also receive the credit/debit confirmation advice through email and in-app notifications (where applicable and available).
READ MORE: Last date extended to exchange old banknotes: SBP
The central bank said that the instructions are applicable with immediate effect and failure to comply with the above instructions will lead to penal action by SBP as per the relevant legal and regulatory provisions.
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FBR extends date for filing sales tax return
ISLAMABAD: Federal Board of Revenue (FBR) on Monday extended date for filing sales tax return for the month of December 2021 up to January 24, 2022.
The last date for filing the sales tax return for the month of December 2021 is January 18, 2021.
The taxpayers are required to file their sales tax returns for the month of December 2021 through the Single Sales Tax Portal.
READ MORE: FBR launches sales tax return filing through single portal
The FBR on December 27, 2021 issued a notification under which it directed the taxpayers to file their sales tax returns for month of December 2021 through Single Sales Tax Portal.
The FBR issued a notification to extend the dates for submitting stock details and payment of sales tax and federal excise as well.
READ MORE: Power of the Board and Commissioner to call for records
The FBR said that the date of submission of Annexure – C of Sales Tax and Federal Excise Duty, which was due on January 10, 2022 has been extended up to January 19, 2022.
Similarly, the payment of sales tax and federal excise duty, which was due on January 15, 2022 has been extended up to January 21, 2022.
The single portal for sales tax returns has been launched to facilitate taxpayers, promote ease of doing business and reduce compliance cost.
READ MORE: Inland Revenue officers promoted to BS-20
The FBR said that through this portal, sales tax registered persons shall be able to file a single sales tax return instead of having to file separate returns to the FBR and each of the different provincial sales tax authorities.
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Dr. Alvi orders action over misconduct with 82-year taxpayer
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi, expressed dismay over misconduct of tax authorities with an 82 year old taxpayers in a refund case.
Dr. Alvi directed the chairman of the Federal Board of Revenue (FBR) to look into the entire system of irresponsibility and corruption and take punitive action against the entire chain of decision makers involved in the case, a statement said on Sunday.
He took exception to the decision of FBR against a senior citizen that refused him to refund a paltry sum of Rs 2,333 on frivolous grounds and dragged him into unnecessary litigation spanning over a year.
READ MORE: Dr. Alvi rejects banker’s plea in woman harassment case
Apologizing to the senior citizen Abdul Hamid Khan, the President said that our heads should hang in shame for the inconvenience caused by FBR to the senior citizen.
Abdul Hamid Khan (the complainant), a senior citizen of 82 years of age, had claimed a refund of Rs 2,333 on his income tax return for the year 2020 and submitted requisite documents of advance tax deduction of the PTCL and cell phone company bills on October 19, 2020.
The complainant e-filed refund application on October 19, 2020 followed by representation to FBR Chairman on December 24,2020.
The Unit officer of FBR rejected his refund claim, on January 29, 2021, on the grounds that the applicant had failed to furnish the original certificates required for authentication.
READ MORE: Alvi praises FTO role in resolving taxpayers’ complaints
The complainant then took up the matter with the Federal Tax Ombudsman (FTO) to seek redressal of his complaint. The FTO investigated the matter and ordered FBR on June 02, 2021 to revisit the impugned order ,dated January 19, 2021, and pass a fresh order, under section 170(4) of the ordinance, after providing the complainant the opportunity for hearing as per law.
It further ordered to identify and initiate disciplinary proceedings against the official who passed the impugned order in derogation of the law and procedures and dragged the ageing taxpayer into unnecessary litigation as well as report compliance within 45 days.
Consequently, FBR filed a representation with the President against the original order of FTO on 24.06.2021. President Dr Arif Alvi rejected the representation of FBR.
The President said that the complainant had admittedly furnished copies of advance tax as per certificates collected by telephone authorities. In case the Unit Officer was not satisfied with the copies of certificates, he could have not only got the same verified from the PTCL and Cell Phone Company but verification was also possible through online system.
He observed that it was the responsibility of the duty officer to get the deduction of tax verified from the deducting authorities irrespective of certificates being original or copies/system generated, if the same were not reflecting in the system for one or the other reason.
READ MORE: PTCL registers 7.3% revenue growth for nine months
The President termed the failure of the officer to verify the bills from PTCL and the cell phone company through the online system as shirking from responsibility and an act of maladministration.
He upheld that the act of the officer was a mockery and travesty of law, procedure and instructions of FBR.
It appeared that unlawful treatment was meted out in the instant case with a view to irritate and humiliate the ageing pensioner.
While rejecting the representation of FBR, the President said that this must be the most pitiful and shameful use of bureaucratic authority and regretted that the FBR official had wasted the time of his department, the Tax Ombudsman and the President of Pakistan over a paltry sum of Rs 2,333 and the matter had lingered for over a year.
READ MORE: FBR announces winners of first POS prize draw
He also deplored that no one in the long chain of bureaucrats in FBR deliberated over the issue to take note of the unfairness, pettiness and superfluousness of the matter.
“Punitive action must be taken along the entire line of decision-makers in this case and Chairman FBR should ensure that those responsible, in particular, and others, in general, go through courses to teach them priorities and courtesies,” he directed.
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FBR announces winners of first POS prize draw
ISLAMABAD: The Federal Board of Revenue (FBR) on Saturday announced the winners of the first draw of prize scheme on invoices obtained from Point of Sales (POS).
According to the FBR, the bumper prize of Rs one million has been won by Tanveer Ahmed.
The second prize of two each Rs0.5 million has been won by Aftab Ahmed and Farhan Akram.
For further details please download the draw
The FBR said that thousands of prizes worth a hundred thousand rupees had been distributed through the draw.
Those buying from POS integrated retailers in the month of December 2021 were included in the balloting.
The revenue body encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.
READ MORE: Prize scheme on invoices issued by retailers
The FBR previously issued a procedure for participating in the prize scheme.
The revenue body said that the customers of the integrated tier-1 retailers, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.
The customers shall verify the electronically generated invoice of integrated retailers either through the “tax asaan” application or by sending SMS to number 9966.
The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.
In case of a verified invoice, the customer shall furnish one time, the following detail to the online system, namely:- Name; CNIC; and Mobile number.
READ MORE: FBR launches prize scheme for POS customers
Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.
In case of an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry and take appropriate action under the relevant provisions of law.
The computerized draw for the prizes shall be held in the first week of every month at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.
Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.
The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.
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Pakistan’s petrol price rises to record high at Rs147.83
ISLAMABAD: The petrol price in Pakistan has been increased to a record high of Rs147.83 per liter, said a statement issued by the finance ministry on Saturday.
The government announced to increase prices of all petroleum products with effect from January 16, 2022.
READ MORE: Prices of all POL products increased to wish New Year
According to the notification, the price of petrol has been increased by Rs3.01 to Rs147.83 per liter from Rs144.82.
The price of high speed diesel (HSD) has been increased by Rs3 to rs144.62 per liter from Rs141.62.
The rate of kerosene has been enhanced by Rs3 to Rs116.48 per liter from Rs113.48.
READ MORE: Petrol price reduces to Rs140.82 per liter
The price of light diesel oil has been increased by Rs 3.33 toRs114.54 per liter from Rs111.21.
According to the notification the decision to enhance domestic prices of petroleum products because the international oil price had registered 6.2 per cent during the last week. Presently, at the highest level since last year.
The existing sales tax rate and petroleum levy on various petroleum products are much below the budgeted targets.
READ MORE: Govt. keeps petroleum prices unchanged
The finance ministry said that against the recommendations of Oil and Gas Regulatory Authority (OGRA) for increase of Rs5.52 per liter in petrol and Rs6.19/liter in high speed diesel prices, the Prime Minister had directed to absorb at the international prices through further cut in sales tax from last fortnight.
The finance ministry will take Rs2.6 billion revenue hit due to reduced sales tax rates.
Therefore, the government has decided to make partial increase in the prices of the petroleum products in order to provide relief to the end consumers.
READ MORE: Petroleum prices kept unchanged for next fortnight
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Finance (Supplementary) Bill gets presidential approval
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi, on Saturday granted approval to the Finance (Supplementary) Bill. The National Assembly on January 13, 2022 adopted the finance supplementary bill tabled by the government.
With the ascent of the President, the financial proposals of the government are not implemented.
READ MORE: Supplementary bill aimed at documenting economy: Tarin
The government on the demand of International Monetary Fund (IMF) withdrew tax exemptions to the tune of Rs343 billion.
The bill was tabled on December 30, 2021 in the lower house in order to get approval before the schedule meeting of the IMF board on January 12, 2022.
READ MORE: Retail sector’s sales worth Rs16 trillion not in tax net: Tarin
The IMF Executive Board was to meet on January 12, 2022 for approval of above $1 billion tranche under $6 billion Extended Fund Facility (EFF).
The government had realized it would not able to get approval by IMF board meeting. Therefore, the finance ministry requested the IMF to defer the meeting date by month-end. The lending agency approved the request and now this meeting likely to be held by January 28, 2022.
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Pakistani overseas workers send $15.8 billion in 1HFY22
KARACHI: Pakistani workers living abroad have sent $15.8 billion to their homeland during first half (July – December) of the fiscal year 2021/2022, State Bank of Pakistan (SBP) said on Friday.
The workers’ remittances grew by 11.26 per cent when compared with $14.2 billion in the same period of the last fiscal year.
READ MORE: Pakistan’s remittances fall by 6.6% in November 2021
The central bank said that with $2.5 billion of inflows during December 2021, workers’ remittances continued their strong impetus of remaining above $2 billion since June 2020.
In terms of growth, remittances increased by 2.5 per cent Month on Month and 3.4 per cent Year on Year in December 2021.
Remittance inflows during December 2021 were mainly sourced from Saudi Arabia ($626.6 million), United Arab Emirates ($453.2 million), United Kingdom ($340.8 million) and United States of America ($248.5 million).
READ MORE: ECC approves loyalty program for home remittances
The central bank said that proactive policy measures by the government and SBP to incentivize the use of formal channels and altruistic transfers to Pakistan amid the pandemic have positively contributed towards the sustained inflows of remittances since last year.
The Jul-Nov FY22 data of Workers’ Remittances has been revised upward to reflect inflows into Roshan Digital Accounts (RDA) that are related to local consumption (like payment of utility bills, transfer to local PKR account, etc.).
READ MORE: FBR not to ask source of remittances sent through ECs
Since data on these conversions was not previously available by country, these were reported under ‘other private transfers’ in the balance of payments statistics. The December 2021 data is also compiled accordingly, and this treatment will be followed going forward.
READ MORE: PM Imran launches incentive program for remittances
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Supplementary bill aimed at documenting economy: Tarin
ISLAMABAD: The Finance (Supplementary) Bill, 2021 is aimed at documentation of economy instead generating revenue, Finance Minister Shaukat Tarin said on Thursday.
On the floor of the lower house, the finance minister said that the supplementary bill had been drafted to document the economy. He said that in the past no such efforts were made to document the economy.
READ MORE: Retail sector’s sales worth Rs16 trillion not in tax net: Tarin
Tarin said that the retail sector had annual turnover of Rs20 trillion, out of which only Rs3.5 trillion was documented.
He said that the government was endeavoring to document the supply side in order to boost the direct taxes.
Meanwhile, spokesperson to Minister of Finance, Muzammil Aslam said that supplementary finance bill was aimed at documenting the national economy, capturing the tax value chain and enhancing taxpayers penetration through simplification of revenue system for broadening of the tax base.
READ MORE: Tarin warns tax evaders of strict actions
Addressing a press conference along with Adviser to Prime Minister on Parliamentary Affairs Dr Babar Awan, Muzammil said that other objective of the reform measures were to discourage the rent-seeking culture, taxing the rich and transferring it to improve the living standards of under-privileged segments of the society.
He termed the reform measures introduced in the money bill as historic, which would have not any negative impact on common people in the country, adding that it would help in documentation of economy and overcome the tax evasion.
He said that previous regimes had put the poor under tax burden, where as the wealth of the ruling class kept on increasing. He said that the supplementary finance bill would have no impact on common people, even if there were any such measures, these have been removed.
READ MORE: Tarin directs FBR to ensure security of taxpayers’ data
Muzammil Aslam further said that private sector credit intake witnessed significant increase and reached to Rs1,400 billion, adding that government was also working to promote public-private partnership to improve service delivery of public sector institutions to turn them into profit oriented entities.
The government had also introduced steps for the autonomy of State Bank of Pakistan he said adding that out of 10 board members, government would appoint 08 members, besides taking measures for strengthening the monetary committee.
READ MORE: Mini-budget: Advance tax on motor vehicles doubles
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SBP wins IFN global award for promoting Islamic finance
KARACHI: The State Bank of Pakistan (SBP) has won the best bank award for promoting Islamic finance announced by Islamic Finance News (IFN), an arm of RED money Group, Malaysia.
The IFN announced the SBP as the best Central Bank of 2021 across the world in promoting Islamic finance. The results of global voting were disclosed today. IFN Best Banks Poll is regarded as one of the prestigious accolades in the global Islamic finance space. Bank Negara Malaysia stood second while the Saudi Central Bank secured third position.
READ MORE: Bank deposits surge to historic high at Rs20.97 trillion
The category of the Best Central Bank in promoting Islamic Finance is one of the closely fought contests among regulators competing for supremacy through exceptional advances made during the year. SBP is honored to have won this award for the 5th time during last seven years.
Previously, SBP was bestowed with this coveted award for the year 2015, 2017, 2018, and 2020. IFN in its cover story while congratulating State Bank of Pakistan for yet another win as the Best Central Bank in Promoting Islamic Finance stated that they welcome back a leading light of the industry. In a closely fought contest, 2020’s victor came roaring back to take the crown, said the IFN.
READ MORE: Last date extended to exchange old banknotes: SBP
IFN while announcing the poll result also stated that with its Governor, Dr Reza Baqir, recently promoted to be the new chairman of the Council of the IFSB, from his role as the Deputy Chairman in 2021, they can hopefully look forward to even stronger support and leadership from the central bank over the coming year.
The IFN Award to SBP as the best central bank is the global endorsement of its initiatives for promotion of Islamic banking in the country. The award reflects an international recognition of the strategic measures undertaken by SBP to put in place a robust policy environment for Islamic banking to prosper.
READ MORE: SBP’s instructions on pensioners biometric verification
The State Bank of Pakistan has consistently promoted and encouraged Islamic finance within Pakistan, and has taken several significant steps. These include launch of 3rd five year Strategic Plan for Islamic banking 2021-25, Shariah compliant standing ceiling facility and open market operations, strengthening of Shariah governance mechanism, Shariah compliant regulations for the lender of the last resort (LOLR) facility and licensing regime for digital banking covering the Islamic segment; besides taking initiatives for promoting better awareness amongst the masses, and strengthening international linkages. The Strategic plan 2021-25 envisages to take Islamic banking share of 30% in terms of assets and 35% in terms of deposits in the overall banking system.
READ MORE: SBP continues banking relaxations amid rising COVID cases
Amidst the COVID-19 chaos throwing unforeseen challenges to the global financial market, Islamic banking industry in Pakistan continued to maintain its impressive growth trajectory and assets and deposits of Islamic banking industry grew on year-on-year basis by 28.2% and 26% respectively by September 30, 2021. The market share of Islamic banking assets and deposits stood at 17% and 18.6% respectively of the overall banking system in the country as of September 30, 2021. The industry operates through a huge network of 3,651 branches and 1,579 Islamic banking windows (dedicated counters at conventional branches) steered by twenty-two (22) Islamic Banking Institutions (IBIs) which include 5 full-fledged Islamic banks and 17 conventional banks having dedicated Islamic Banking Branches and windows. The industry is growing on the back of continued support by the Government of Pakistan which remains committed to provide an enabling platform for this industry to operate.