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Category: Trade & Industry

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  • FPCCI seeks statutory time for return filing after error removals

    FPCCI seeks statutory time for return filing after error removals

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has urged the tax authorities to give statutory time for filing tax return after removing all errors in the return form.

    “Proper legal time for compliance should be granted as per the statute after resolving all problems in the tax return forms,” said Suleman Chawla in a letter sent to Asim Ahmad, chairman, Federal Board of Revenue (FBR).

    READ MORE: FBR advised to extend tax return filing date for three months

    The apex trade body pointed out numerous errors and mistakes in the return forms on the Iris – the online filing portal of the FBR – both technical, related to IT, and legal.

    Due to the technical errors the tax filers are reluctant to pay undue taxes, and their consultants remain unable to file the returns, the FPCCI said in the letter sent on September 24, 2022.

    “It is regretful to note that none of the issues have been addressed as yet and, therefore, the pace of compliance of filing the tax returns is very slow,” Suleman Chawla said.

    READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    The FPCCI highlighted the following issues in its letter to the FBR chairman:

    Column for adjustment of brought forward capital losses under the head of capital gains tax is not available in income tax returns form due to which tax on capital gain cannot be calculated correctly.

    The column of tax credit for specified industrial undertaking under section 65G of the Income Tax Ordinance, 2001 is inadvertently available in the tax credit annexure of income tax return for salaried individuals, which has no correlation with such tax credit.

    READ MORE: Penalties for failure to file return tax year 2022 within due date

    Column for adjustment of brought forward capital losses under the head of capital gains is not available in Income tax return form due to which tax on capital gain cannot be calculated correctly.

    The Column of tax credit for specified industrial undertakings u/s 65G of the Income Tax Ordinance, 2001 is inadvertently available in the Tax Credits Annexure of income tax return for salaried individuals, which has no correlation with such tax credit.

    Although the rate of tax on contract receipts under section 153 was reduced from 7.5% to 7% for Tax Year 2022, however, there is no column for such reduced rate in the return for the TY 2022 available on IRIS.

    The draft of manual return forms for the Individuals and AOPs for the Tax Year 2022 was issued belatedly on August 26, 2022, whereas the final SRO. 1733(1)/2022 was issued on September 13, 2022 meaning thereby only 17 days of time has been allowed to file the manual returns, which is insufficient as provided under the law.

    READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time

    The IRIS portal is calculating incorrect tax liability on gain on sale of immovable properties in violation of section 37(1A) of the Income Tax Ordinance, 2001 which needs to be taken care off as soon as possible.

    The IRIS portal is calculating incorrect tax on profit/yield on Bahbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account in violation of clause (6) of Part-III, 2nd Schedule of the Income Tax Ordinance, 2001, which provides that tax shall not exceed 10 percent of such Profit/ Yield.

    There lies no option list in drop downs country and currency under Code “7006” having description “Investment (Non-Business) (Account / Annuity / Bond / Certificate / Debenture / Deposit / Fund / Instrument / Policy / Share / Stock / Unit, etc.)” due to which a taxpayer remains unable to file the Foreign Income & Assets Statement under section 116A(1) of the Ordinance.

    Opening wealth is being shown in “Reconciliation of Net Assets” Value of opening net assets is being shown under code ‘703002’ despite the fact that the taxpayer’s residency status is selected as “non-resident” for Tax Year 2022 after which, he should not be required to file the wealth statement including reconciliation of net assets.

    The withholding rates on payment of Dividend @ 7.5%, 15% and 25%, (under section 150 of the Ordinance) are appearing in the Income Tax Return Form of “Income for a person deriving income only from salary and other sources and the Column Code 64330052 (Dividend u/s 150 @25%) is missing.

    Proviso was inserted under section 22(2) of the Tax Ordinance by Finance Act, 2020 whereby depreciation on additions to fixed assets made after 01-Jul-2020 would be reduced by 50% However, when entries related to written down values are entered in in depreciation schedule as opening values, the IRIS is calculating depreciation at 50% on total values.

    In addition to above, what lately has been done by FBR is that it has deleted the column of “Adjustment of Refunds”, which is certainly an afterthought while the Manual Tax Returns, which were issued vide SRO 1612(I)/2022 dated 26 August, 2022 do retain the “Column of Tax Return Refund”. There is no explanation or justification for this glaring disparity, which is to be taken care of the clarification of Taxpayers.

    Online Refund Adjustment Column is still not available on Return loaded on IRIS irrespective of the fact that it is available in the SRO issued by Board.

    Profit on debt/interest income on government securities is subject to FTR

  • Textile Council recommends cotton import from India

    Textile Council recommends cotton import from India

    KARACHI: Pakistan Textile Council (PTC) in a statement on Monday said the country should import cotton from neighboring India to avoid another balance of payment crisis.

    The country’s textiles industry, which earned more than $19 billion in exports last year, is facing a shortage of raw material as flash floods have damaged about half of the nation’s cotton produce since June, it said.

    “The unprecedented rainfall resulting in floods has caused havoc in Pakistan,” said the PTC.

    One-third of Pakistan is submerged in water, thousands of homes have been destroyed, more than 1,500 people have lost their lives and most importantly about 18,000 sq km of cropland has been ruined, including about 45 per cent of the cotton crop.

    The country will face a cost far greater than $10 billion in damages, with the loss of food crops alone amounting to about $2.3 billion, a particularly heavy burden at a time of rising food prices around the world.

    Pakistan is a major producer of rice and cotton, and both crops have suffered severe damages.

    As part of the devastation, flood damage will likely force Pakistan to increase cotton imports at a time when production in the US is forecasted to plunge by 28 per cent due to drought

    And with restrictions on China, Pakistan will not be able to procure raw materials from there as well, the Council said.

    The outlook for Brazil is also not very encouraging. According to ABRAPA, the drought there has already dried up an estimated 200,000 tons of cotton supply.

    All these factors are causing the price of cotton to increase in local and international markets.

    Given the continuous depreciation of the rupee and a record high shipping freight, importing cotton from far-located countries like the US, Brazil, Egypt, etc. will not be economically viable, the PTC said.

    Last year, 2021-22, Pakistan’s textile exports rose to an all-time high of $19.3 billion but even achieving this mark would be challenging given the no availability of raw material to factories.

    The Council said that it was imperative for Pakistan to keep its export growth momentum to finance the import bill and keep the balance of payment situation manageable and avoid default conditions.

    “Import of raw cotton from India must be immediately allowed to mitigate the raw material shortage,” it said. The move will help Pakistan reduce trade time and curtail heavy logistics costs.

    “The declining textile exports will lead to the balance of payment crisis, and reduced productivity will put millions of jobs at on stake which the country cannot afford,” the Textile Council warned.

    The declining textile exports will lead to the balance of payment crisis, and reduced productivity will put millions of jobs at stake which the country cannot afford,” the Textile Council warned.

  • FBR advised to extend tax return filing date for three months

    FBR advised to extend tax return filing date for three months

    KARACHI: The Federal Board of Revenue (FBR) has been advised to extend the last date for filing income tax returns at least for next three months.

    Muhammad Idrees, President, Karachi Chamber of Commerce and Industry (KCCI) in a letter sent to the Finance Minister on Monday requested to issue to the FBR for extension in last date for filing income tax returns from September 30, 2022 to December 31, 2022 keeping in view the unusual situation emerging all over the country due to recent rainfalls and flash floods.

    READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    KCCI President stated that the chamber was constantly being approached by the members of the business and industrial community and also by the people belonging to different walks of life who wanted the last date to be extended till December 31.

    READ MORE: Penalties for failure to file return tax year 2022 within due date

    “Due imposition of ban on imports which was followed by unusual situation all over the country emerging after torrential rainfalls and flashfloods, the taxpayers, particularly the members of the business & industrial community, are facing a lot of problems as a large portion of receivables from various parts of the country badly hit by floods are still pending,” he said, adding that it was a well-known fact that the business, commercial, agricultural and all other activities in the flood-hit areas have come to a total halt which has created serious cashflow issues and it will take at least two more months to return to normalcy.

    READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time

    In this scenario, it has become inevitable to provide relief to loyal taxpayers in shape of extension in last date hence, keeping in view the ground realities, he requested the Finance Minister to order FBR to extend the last date for filing income returns to December 31, 2022 which will be widely welcomed by the loyal taxpayers from all over the country.

    READ MORE: FBR advised to fix glitches for smooth filing of income tax returns

  • Pakistan salt manufacturers go on indefinite strike

    Pakistan salt manufacturers go on indefinite strike

    KARACHI: Salt Manufacturers Association of Pakistan (SMAP) has announced an indefinite strike, calling the salt prices hike unjustified by the Pakistan Mineral Development Corporation (PMDC).

    During an emergency meeting of Salt Manufacturers Association of Pakistan (SMAP) Executive Committee, Ismail Suttar, Chairman SMAP along with members from Kalabagh and Quaidabad stated that Pakistan Mineral Development Corporation(PMDC) had made unjustified decision of price hike without consulting SMAP, this behavior of the cooperation is regarded as irresponsible and non-serious as they stay adamant on their plan that is creating some serious existential problems for the salt industry.

    As a protest, SMAP executive committee has unanimously agreed to initiate strike action from Kalabagh. Chairman SMAP warned Kalabagh members will keep the strike till PMDC reverses the recent price increases and resolves all other outstanding issues, said the Chairman SMAP.

    SMAP Executive Committee was of the considered opinion that this will be our first step, and if PMDC fails to constructively engage SMAP in resolution of these issues then further strike plans at other key salt mines will be implemented.

  • State Bank agrees to clear invoices up to $50,000: FPCCI

    State Bank agrees to clear invoices up to $50,000: FPCCI

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday said that the State Bank of Pakistan (SBP) has agreed to allow clearance of consignments valuing up to $50,000.

    FPCCI President Irfan Iqbal Sheikh in a statement apprised the entire business, industry and trade community of Pakistan that in a breakthrough achievement from the platform of FPCCI and under the leadership of its Senior Vice President and FPCCI’s focal person on SBP-related matters, Suleman Chawla, “SBP has agreed to clear / settle all the backlog and stuck up payments within two days, which fall under chapters 84 & 85 of the customs tariff; and, if their invoice values are up to fifty thousand dollars.”

    READ MORE: KATI expresses concern over delaying revision in petroleum prices

    Irfan Iqbal Sheikh maintained that FPCCI has been working relentlessly over the past couple of months on the issue of delayed clearance of dollar payments of importers; and, finally after multiple detailed rounds of consultative sessions between FPCCI and SBP, the central bank has agreed, in principle, to at least release all payments in the range of $50,000 or less.

    Suleman Chawla informed that he has also released an official notification from FPCCI on the development to inform all members of the apex body & stakeholders of the lingering issue.

    READ MORE: FBR suggested fixed tax regime for women entrepreneurs

    He added that FPCCI has been receiving numerous calls each day for the past couple of months from across Pakistan and across various sectors affected by the restrictions – which were also impacting raw materials and equipment falling under chapters 84 & 85 – and,FPCCI is expecting that all payments falling under the aforementioned category will be cleared within this week.

    READ MORE: Karachi Chamber urges allowing imports from India

    Suleman Chawla reiterated that the commercial importers and manufacturers have suffered a lot due to the restrictions as these were announced abruptly and without any homework or consultation. Authorities should have been meticulously selective in implementation of the restrictions to only luxury items; which, in turn, would have saved the business community millions of dollars in demurrages, container charges and lost export orders, he added.

    READ MORE: FPCCI rejects central bank’s claim of ‘no import restriction’

  • KATI expresses concern over delaying revision in petroleum prices

    KATI expresses concern over delaying revision in petroleum prices

    Korangi Association of Trade and Industry (KATI) on Tuesday expressed concern over delay in revision of petroleum prices by the government.

    The revision in petroleum prices was scheduled for September 15, 2022, which was to be implemented from September 20, 2022. It is learnt that the authorities had recommended reduction in prices for the fortnight starting from September 16, 2022.

    READ MORE: KATI sends 2nd batch of relief goods for flood victims

    KATI President Salman Aslam expressed concern over the government’s delay in changing the prices of petroleum products.

    He said that there is a trend of continuous decline in oil prices in the global market, and the government should immediately announce a reduction in the price of petrol so that inflation and production costs can be reduced.

    READ MORE: KATI flays imposition of new taxes

    Aslam welcomed the Saudi government’s decision of a one-year extension of $3 billion to stabilize Pakistan’s foreign exchange reserves. He said that Saudi Arabia is Pakistan’s best friend and has helped Pakistan in difficult times in the past. With this decision, Pakistan’s foreign exchange reserves and economic stability in the country will be possible.

    READ MORE: KATI rejects further petroleum price hike in Pakistan

    He hoped that the government will solve the problems faced by the industrialists so that the production process in the country can be accelerated and the economy can travel towards development.

  • FBR suggested fixed tax regime for women entrepreneurs

    FBR suggested fixed tax regime for women entrepreneurs

    ISLAMABAD: The Federal Board of Revenue (FBR) has been suggested to introduce fixed tax regime for women entrepreneurs in order to facilitate and encourage businesswomen.

    The suggestion was made by women entrepreneurs at a meeting with the chairman of Federal Board of Revenue (FBR).

    READ MORE: FBR announces prize winners of 9th POS balloting

    FBR chairman Asim Ahmad held meeting with the office bearers of Islamabad Women Chamber of Commerce & Industry (IWCCI) on Friday to listen tax-related issues and concerns of women entrepreneurs.

    The office bearers, Ms Naima Ansari, President, Ms Samina Fazil, Founder President and Ms Zaheema Eckbaull Khattak, Chief Executive Officer, informed the Chairman FBR that women entrepreneurs are facing hardships in tax compliance such as timely return filing and high cost of filing charged by tax practitioners, which is also discouraging new women entrepreneurs to register their businesses with the FBR. They suggested that fixed tax regime for small women entrepreneurs may be introduced. They also requested that awareness sessions on filing tax returns and tax compliance procedures may be arranged in Women Chamber of Commerce & Industry of major cities to encourage women entrepreneurs to make tax compliance with ease.

    READ MORE: FBR updates salary tax card for year 2022-2023

    The Chairman FBR appreciated the suggestions put forth by the office bearer of IWCCI representing more than 1,000 women entrepreneurs and assured them that their valued input would be duly considered for launching initiatives to facilitate women entrepreneurs especially belonging to remote and marginalized areas.

    READ MORE: Sindh exempts tax on services provided for flood relief

    The Chairman FBR has issued directions to establish special desk at Gwadar for addressing grievances and concerns of women entrepreneurs and to facilitate them in filing tax returns. Furthermore, the Chairman FBR has issued directions to field formations to hold awareness sessions in WCCI of major cities for facilitation of women entrepreneurs concerning tax compliance.

    Member Policy along with Chief Income Tax Policy and Chief Sales Tax Policy were also present in the meeting.

    READ MORE: SBP allows flood relief donations through home remittance channel

  • Workshop held to encourage women entrepreneurs for online businesses

    Workshop held to encourage women entrepreneurs for online businesses

    KARACHI: A workshop on digital marketing was held to encourage women entrepreneurs and promote online businesses. The Women Entrepreneurs Committee of Federation of Pakistan Chambers of Commerce & Industry and Karachi Women Chamber of Commerce & Industry Malir (KWCCI Malir) in collaboration with Small & Medium Enterprise Development Authority (SMEDA) organized a one-day workshop on Digital Marketing through Facebook and Instagram, so that to encourage Women Entrepreneurs and to promote online businesses.

    (more…)
  • Karachi Chamber urges allowing imports from India

    Karachi Chamber urges allowing imports from India

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday urged the government to open borders for allowing imports from India, especially in the wake of flood devastation.

    Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Idrees have appealed the government to immediately allow imports of raw cotton and food items including vegetables, fruits, grains and other essential products from India through Wagha border as Pakistan faces severe shortages of all these products because of the devastation caused by flashfloods which completely washed away all the agricultural crops.

    READ MORE: FPCCI rejects central bank’s claim of ‘no import restriction’

    Chairman BMG Zubair Motiwala pointed out that in addition to the devastation caused and losses of up to billions of rupees suffered, food crises have also triggered as the agricultural crops, livestock, and agricultural land have been completed damaged and remain inundated to date.

    “As raw cotton, dates, chilies, cauliflower, onions, and other fruits and vegetables in Sindh and Balochistan have been destroyed, therefore, it has become inevitable to open up the Wagha border and allow imports of agricultural crops from India so that our country’s food needs and also the industry’s agricultural input requirements could immediately be surmounted by importing food supplies within the shortest possible time at competitive rates from our neighboring country,” he added.

    READ MORE: KCCI managing committee candidates elected unopposed

    He stressed that the government has to act promptly and sensibly in this regard to avert food crises as according to estimates, 65 percent of Pakistan’s main food crops including 80 percent of its wheat, rice and raw cotton etc. have been completely swept away during floods, and more than 3 million livestock have also died.

    “In this scenario, the wisest move would be to go for importing all these products from India with lower logistic cost and time instead of other countries with heavy logistics expenses and a lot of time. Importing from India will have a bearable impact on the country’s balance of payment as compared to others hence, the lawmakers must take this important step in the larger interest of the country,” he said.

    Chairman BMG warned that Pakistan’s recovery from the damages caused to the agricultural crops could take several months and if the raw cotton imports from India were not allowed on time, the textile exports would go down due to lower production as raw cotton was the basic and most important raw material of textile production. “Reduced textile exports would worsen the situation for the already ailing and overburdened economy.”

    READ MORE: APTMA demands immediate release of textile machinery

    President KCCI Muhammad Idrees stated that Pakistan heavily relies on the local production of agricultural products but now it was obvious that wheat, rice, raw cotton, grains and vegetables etc. have to be imported so it was better to import from India which produces plenty of these agricultural products and also the livestock.

    He was of the opinion that the prices of vegetables and other commodities have risen sharply in the local markets, making them unaffordable and beyond the reach of poor segment of society hence, the government without wasting any time must immediately allow agricultural imports from India so that prices could stabilize and the countrymen could be saved from hunger and starvation.

    READ MORE: Date extension demanded for electricity bills payment

  • FPCCI rejects central bank’s claim of ‘no import restriction’

    FPCCI rejects central bank’s claim of ‘no import restriction’

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday strongly rejected the claim of the central bank regarding no restriction on imports.

    FPCCI’s acting president, Suleman Chawla in a statement categorically refuted the claims and assertions made by the State Bank of Pakistan (SBP) that there are no restrictions in place on import of raw materials.

    READ MORE: No restriction on imports, SBP clarifies

    Import payments not being cleared swiftly by SBP are resulting in disruptions in industrial production; unbearable demurrages and container charges; loss-making delays in fulfillment of export orders; inflationary pressures in the domestic markets and compounding of discouraging investor sentiments, he added.

    Acting FPCCI Chief explained that due to the unavailability of foreign exchange, continuous rupee depreciation, speculative trading and delays by SBP, manufacturers and commercial importers are in a jeopardy and exports have started to fall. The country will suffer due to the dwindling exports, increasing trade deficit and yawning current account deficit (CAD), he added.

    READ MORE: Pakistan’s apex body wants fixed exchange rate regime

    Suleman Chawla has maintained that SBP has failed in exercising its constitutional duties of effectively regulating the commercial banks through various policy tools at its disposal; and, commercial banks are making windfall profits through speculative trading of dollars.

    FPCCI has time and again reminded SBP, in no uncertain terms, of their responsibilities to control commercial banks; but, it is always unfruitful & goes in vain, he added.

    Acting FPCCI President emphasized that dollar is trading in the open market at a premium of PKR. 8 – 10 and it is a glaring testimony of the fact that the importers are not being able to source the dollars that they need to fulfill their import contracts and related commercial transactional procedures from the banking channels. It will only aggravate the situation and promote the informal open market, he added.

    READ MORE: KCCI managing committee candidates elected unopposed

    Chawla pointed out that there are still difficulties in opening LCs with commercial banks under chapter 84 & 85 of the custom tariff; despite the claimed circular issued by SBP to the commercial banks and that reflects badly on SBP’s ability to implement its regulatory role. However, he emphasized, SBP has all the means and policy tools to implement its decisions & circulars.

    Engr. M. A. Jabbar, VP FPCCI, highlighted that despite taking responsibility of its failure, SBP has resorted to blaming the industrialists and their representatives; who are already under unprecedented strains due to the various other factors in addition to the dearth of dollars in the banking channel.

    READ MORE: APTMA demands immediate release of textile machinery

    Engr. Jabbar added that FPCCI sees SBP’s conduct as detrimental to industrial growth, an utter lack of responsibility, insensitivities to people’s sufferings due to depleting employment opportunities, debilitating inflation and counterintuitive coupled with lack of initiative to fulfill its mandated duties.