KARACHI: Saqib Naseem has been elected unopposed central chairman of Pakistan Yarn Merchants Association (PYMA) while Javed Asghar elected senior vice chairman for the year 2021-22.
(more…)Category: Trade & Industry
This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.
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KCCI expresses grief over human loss in earthquake
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday expressed deep grief and sorrows over loss of human lives in earthquake, which jolted the Baluchistan province last night.
In a joint statement issued, Chairman Businessmen Group and Former President KCCI Zubair Motiwala, Vice Chairmen BMG Tahir Khaliq, Haroon Farooki, Anjum Nisar and Javed Bilwani, General Secretary BMG AQ Khalil, President KCCI Muhammad Idrees, Senior Vice President KCCI Abdul Rehman Naqi and Vice President KCCI Qazi Zahid Hussain noted that 20 people have fallen prey to the earthquake in Baluchistan and more than 300 people including women and kids have been injured whereas hundreds of houses were also damaged in various areas including Quetta, Sibbi, Pishin, Muslim Bagh, Ziarat, Qila Abdullah, Sanjavi, Zhob and Chaman.
They said that our brother and sisters, particularly those inhabiting in far-flung and impoverished areas of Baluchistan province, should not be left alone in this hour of grief and need. It is the duty of everyone to help and support the affectees during the most difficult time of their lives.
BMG leadership and KCCI Office Bearers, while appreciating the quick response of the government and armed forces, said that the government and the military forces were doing a fine job by promptly undertaking rescue operation and immediately dispatching relief goods and medical teams to the quake-hit areas of Baluchistan.
BMG leadership and KCCI Office Bearers, while praying for the wellbeing of people affected by the natural disaster as well as their recovery from the trauma and pain, offered heartfelt condolences to those families who lost their loved ones in this tragic incident.
They also appealed the fellow businessmen and industrialists to donate generously in whatever way they can for supporting the affectees of Baluchistan earthquake.
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POS installation offers reduced tax rates: LTO Karachi
KARACHI: Officials of Large Taxpayers Office (LTO) Karachi have apprised the business community that installation of Point of Sale (POS) offered reduced rate of sales tax.
A team of tax officials from Large Tax Office (LTO) Karachi visited Pakistan Business Council (PBC) on Wednesday to discuss the integration of Tier-1 retailers, a statement said on Wednesday.
The purpose of the visit was to listen and redress the grievances regarding the online integration of Tier-1 retailers / Point of Sale (POS) with the FBR system.
It was apprised to the members that the POS integration of retailers does not involve new tax, rather it gives the benefit of reduced rate of sales tax to consumers who buy the goods from integrated Tier-1 retailers.
The LTO Karachi team was comprised of officers included: Shakeel Ahmad Kasana, Commissioner-Inland Revenue (IR); Aijaz Hussain, Additional Commissioner-IR; Shoukat Ali Changezi, Additional Commissioner-IR; Abdul Hameed Mangrio Deputy Commissioner-IR; and Amjad Ali Moroojo, Audit Officer-IR.
The representatives of the PBC were: Ehsan A. Malik, Chief Executive; Samir S. Amir, Director Research; and Aman Chanchi, Unilever Pakistan.
The Commissioner-IR briefed the members regarding the scope and purpose of POS integration.
A formal presentation was given by Abdul Hameed Mangrio, Deputy Commissioner which was followed by Q&A session.
The delegation requested the members to encourage the Tier-1 retailers to get integrated with the FBR system for ease of reporting of sales and avoid unnecessary documentation besides enjoying reduced rates of tax on their supplies.
The members of the Council appreciated the outreach efforts of FBR to remove the misconception and misgivings regarding the online integration of retailers with the FBR system.
They appreciated the system and informed that Pakistan Business Council is always encouraged to promote documentation of the economy and Point of Sale (POS) is the right step in this direction.
They also assured their active engagement for making the Point of Sale (POS) integration a success story for the larger interest of the country and the documentation of the economy.
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“FBR not to take action directly against non-filers”
KARACHI: The Federal Board of Revenue (FBR) will not take any action directly against non-filers or under-filers, Finance Minister Shaukat Tarin assured the members of Karachi Chamber of Commerce and Industry (KCCI).
A statement issued by the KCCI stated that Finance Minister Shaukat Tarin had assured to review the matter of filers and non-filers and look into the possibility of re-examining the term ‘non-filer’ and ‘under-filer’ in consultation with stakeholders whereas in the meantime, “no one will suffer as FBR will not take the action directly.”
FBR will share relevant data with Chambers and also upload the same on its website.
The government intends to take help of artificial intelligence and assessment will be done through third party while appropriate time of 90 days will be provided to non-taxpayers for settlement, the Finance Minister added while speaking at a meeting with a delegation KCCI.
Federal Minister for Energy Hammad Azhar, Advisor to PM on Commerce Abdul Razak Dawood, Chairman Federal Board of Revenue Ashfaq Ahmed and other senior officials of Finance Ministry and FBR also accompanied Shaukat Tarin at the meeting while KCCI’s delegation, which was led by Chairman Businessmen Group & Former President KCCI Zubair Motiwala, comprised of Vice Chairmen BMG Haroon Farooki & Jawed Bilwani, General Secretary BMG AQ Khalil and President KCCI Muhammad Idrees.
Referring to Chairman BMG’s remarks about discrimination with export-oriented industries of Sindh with regards to supply of RLNG at $6.5 per MMBTU, Energy Minister Hammad Azhar agreed to supply RLNG at $6.5 per MMBTU to export-oriented industries of Sindh. In this regard, the Ministry of Finance will sanction subsidy and relevant notification will also be issued.
Hammad Azhar stated that the Ministry of Energy will also convene a meeting to discuss KCCI’s concerns over gas crises in winter season so that they could explore ways and means for smooth supply of gas to industries/ consumers of SSGCL in winter season. MD SSGC will also be advised to hold a meeting with KCCI in this regard, he added.
On the occasion, PM’s Advisor Abdul Razak Dawood said that they were considering waiver of duty on import of cotton yarn. It was also concurred that KCCI’s proposal to reduce concessional rate of 0.1 percent to 0.01 percent on Traders/ brokers of Cotton Yarn under SRO.333 (I) 2001 dated 02.05.2011 has been taken into consideration in the larger interest of value-added exports.
Razak Dawood, while appreciating KCCI’s idea of giving Industry status to “Warehousing / Cold Chain / Cold Storage”, said that the government will look into this matter.
He reiterated that Drawback on Local Taxes & Levies (DLTL) will either continue with same rate or the government may increase the rate of drawback whereas the old income tax claims will also be refunded at the earliest.
Speaking on the occasion, Chairman Federal Board of Revenue (FBR) Dr Ashfaq Ahmed assured that the Government will review the matter pertaining to CNIC requirement and 3 percent tax which KCCI believes should not be mandatory but optional as 3 percent tax on sales to unregistered persons was already being collected hence there was no need for demanding CNIC. He also promised to hold a meeting within next week via zoom facility to discuss the progress on various taxation issues.
In response to problems being faced because of the condition to put invoice and packing list inside imported container or consignment, the lawmakers assured to review KCCI’s proposal that the bank should only receive document when invoice and packing list is attached with the documents and consignment should be released with the provision of invoice and packing list from Customs.
It was also assured that the government will also look into KCCI’s proposals to amend provision under S. No.4 in which a new section 114B has been inserted in Income Tax Ordinance 2001, providing discretionary powers to FBR to issue General Orders to disable mobile phones/SIMS, disconnect electricity and gas connection etc. to enforce filing of returns by the persons not appearing on the ATL. The Karachi Chamber, in this regard, has proposed the provision may be amended to substitute the words “Persons not appearing on ATL” with “Unregistered Persons” to achieve the purpose of broadening of tax-base.
KCCI delegation, while conveying gratitude to Finance Minister for fulfilling his commitment of holding today’s meeting in Islamabad along with Hammad Azhar, Razak Dawood and others, expressed confidence over the stewardship and seriousness being exhibited by Shaukat Tarin towards resolving the problems being suffered by the business and industrial community.
Finance Minister, in his concluding remarks, said that he will keep on visiting KCCI after every three months while Chairman FBR will also be visiting the Chamber on a monthly basis.
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Return filing date extended for 15 days
KARACHI: The last date for filing income tax returns has been extended for 15 days till October 15, 2021 from September 30, 2021.
Finance Minister Shaukat Tarin on Thursday announced to extend the date after listening to the problems being faced by taxpayers in filing income tax returns, which were highlighted by a delegation of Karachi Chamber of Commerce & Industry (KCCI) at a meeting held in Islamabad on Thursday.
KCCI delegation, which was led by Chairman Businessmen Group & Former President KCCI Zubair Motiwala, comprised of Vice Chairman BMG Haroon Farooki & Jawed Bilwani, General Secretary BMG AQ Khalil and President KCCI Muhammad Idrees who appreciated the finance minister for understanding the hardships being faced by taxpayers in filing income tax return and accordingly announcing relief.
The delegation members, while underscoring the need to modify the ineffective taxation policies, expressed deep concerns over the implementation of Tax Laws (Third Amendment) Ordinance 2021 which, they feared, would start from Karachi as it has been observed from time to time that all such laws carrying penalties always start from Karachi and stay confined mostly to this city only.
If Karachi has to pay all the taxes and suffer penalties as well then why Karachi was not receiving development funds in proportion to its contribution, they asked and reiterated KCCI’s demand to replace term ‘under-filers’ in the controversial ordinance with ‘non-filers’.
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FPCCI demands tax return filing date extension
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded the tax authorities of extending the return filing date at least for two months.
In a statement, FPCCI President Mian Nasser Hyatt Maggo, demanded the Federal Board of Revenue (FBR) to extend the deadline for tax filing by two months to facilitate the business community and support the government’s drive to broaden the tax base and collect maximum taxes.
FPCCI Chief, referring to the fast-approaching deadline of September 30, 2021, i.e. Thursday; and, recommended to the authorities that on the basis of feedback from businesses across Pakistan, FPCCI maintains that hundreds of thousands of SME owners will not be able to file their income taxes by Thursday.
Mian Nasser Hyatt Maggo said that FBR has notified a daily surcharge of 0.1 per cent for delayed filing on taxable income; which is not only harsh but also impractical as it translates into 3 per cent per month and 36 per cent per annum.
The maximum surcharge by FBR should not be more than KIBOR plus 2 per cent; which also happens to be the rate when FBR delays the processing of tax refunds.
Mian Nasser Hyatt Maggo, as President FPCCI, has reiterated his stance that FBR should stop taking one-sided radical anti-business decisions; instead, should have a detailed consultative process with the business, industry and trade community of Pakistan and FPCCI is ever-ready to provide its platform as their apex representative body.
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One month date extension demanded for filing tax returns
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Friday demanded the tax authorities to extend the last date of filing returns for the tax year 2021 up to October 31, 2021.
KCCI President M. Shariq Vohra in a statement urged the government to extend last date for filing Income Tax Return from September 30, 2021 to October 31, 2021 as many taxpayers were finding it really hard to file their returns on time due to ongoing extraordinary situation in which many businesses have suffered badly because of limited timings and other curbs imposed to contain the spread of COVID-19 pandemic.
President KCCI said that although the government has recently eased some restrictions but the businesses were still struggling to return to complete normalcy, hence they must be provided some breathing space by extending the last date for filing income tax return till October 31, 2021.
He stated that KCCI has been receiving a lot of requests from the members of the business and industrial community who have been constantly asking the Chamber to approach the higher authorities to seek extension in last date.
“It is a well-known fact that the entire nation including the taxpayers were hit hard by the fourth wave of Covid-19 and the situation remains challenging to date. Hence, the Federal Board of Revenue must keep all the ground realities in mind and extend last date for filing income tax return to October 31, 2021 which would be widely appreciated by the business community,” he added.
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Employers flay new tax ordinance
KARACHI: President, Employers’ Federation of Pakistan, Ismail Suttar, has strongly condemned the promulgation of new tax ordinance without consultation of the relevant stakeholders.
The federal government introduced Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated on September 15, 2021 through a presidential order.
In a statement, Ismail while criticizing the Federal Board of Revenue (FBR), termed the move irrational and unwelcoming because most transactions are carried out through post-dated checks, and without a grace period of at least 40 days the business community will not be able to adopt the digital mode.
“It is a total disaster and not the right way to bring the non-compliant sector under the tax net to meet the ambitious target of Rs5.5 trillion tax collection by pounding on the largely compliant corporate sector,” Ismail asserted.
On behalf of the member manufacturers and exporters, the EFP president has appealed for an immediate suspension of the new tax law ordinance until due approval by the industrialists.
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Measures against non-, under-filers in ordinance: Tarin
KARACHI: Finance Minister Shaukat Tarin has explained the measures have been taken against non-filers and under-filers who are declaring zero income.
Talking at a meeting with office bearers of Karachi Chamber of Commerce and Industry (KCCI) a day earlier, Shaukat Tarin categorically stated that victimization was definitely not the purpose of the Ordinance which was purely for non-filers and those under-filers who file zero tax.
It was a matter of concern that out of a total of 2.9 million filers, one million are those who file tax returns and show zero taxable income.
“We are intending to take help of artificial intelligence would examine electricity, gas, telephone bills along with banking transaction activities and other details of such filers and classify them as under-filers who will be asked to submit their taxes through a third party.
He assured that the Drawback of Local Taxes & Levies (DLTL) has been extended and it will not be discontinued while the business community is going to get all its claim on time as funds for the purpose have already been allocated in the budget and the pending DLTL claims of Rs32 billion of the last fiscal year will also be settled in the next six months.
Exchanging views with the leadership of Businessmen Group (BMG) and Karachi Chamber of Commerce & Industry (KCCI) at a meeting held here in a local hotel on Sunday, Finance Minister advised KCCI to visit Islamabad in order to discuss their reservations about the new Ordinance, besides resolving all issues on the spot by arranging meetings with Prime Minister Imran Khan, Advisor Commerce & Investment Razak Dawood, Federal Minister for Energy Hammad Azhar and Federal Minister for Industries & Production Makhdoom Khusro Bakhtiar. “We will instantly give deadlines for all the pending policies as PM is determined to revive business, industrial and agricultural activities”, he added.
Chairman Businessmen Group & Former President KCCI Zubair Motiwala, Vice Chairmen BMG Tahir Khaliq, Haroon Farooki & Jawed Bilwani, General Secretary BMG AQ Khalil, President KCCI Shariq Vohra, Senior Vice President Saqib Goodluck, Vice President Shamsul Islam Khan, Former Vice President Muhammad Idrees, Former Presidents, KCCI Managing Committee Members along with prominent business figures attended the meeting.
He said that the government was serious towards resolving issues in order to ensure sustainable economic growth at the rate of 5 percent which was the basic reason for enhancing the PSDP and reducing prices of raw materials so that the industry could stand on its feet. “Good news is that we are growing as all the indicators are showing improvements and we are growing faster than what was being expected.”, he said, “However, the import bill is going to touch US$19 billion this year as compared to US$13 billion of last year mainly due to rising petroleum prices and other commodities which we have to absorb.”
He said that the government’s target was to improve the pace of exports from the existing 8 percent to 18 percent in the next few years while the narrow industrial base was also being expanded through incentivization. Incentives have been given to construction sector, pharmaceutical sector, spare parts manufacturers. “Anyone with economy of scale production is being incentivized to enable them to go for exports as well. We have to improve the exports and FDI by facilitating the local investors through Board of Investment. If our local investors will not be happy, how are we going to attract foreign investors.”
He was of the opinion that inflation was not the issue of Pakistan alone as many countries around the world including regional countries were also facing this issue which was due to disruption in production all around the world due to covid along with logistics disruptions and exorbitant container chargers. “Prices of Palm oil, wheat and rice have been rising globally since 2018. We cannot isolate ourselves from international commodities prices as we are linked with them.”
He also assured to convey KCCI’s concerns over dilapidated state of Karachi’s infrastructure to Prime Minister with a request to come up with some kind of a direct action by the Federal Government to improve the poor state of Karachi’s infrastructure.
Chairman BMG & Former President KCCI, while expressing deep concerns over the newly promulgated ordinance in which enforcement measures have been introduced in the name of broadening the tax base, stated that this ordinance has frightened everyone mainly because of the term under-filer which was pinching in everyone’s mind and needs to be removed.
He said that it was highly unfair that instead of appreciating and pampering the filers and acting strictly against the non-filers, this ordinance targets existing filers too by tagging them as under-filers which would open up more avenues of harassment and corruption. Hence, the term under-filer has to be expunged from the ordinance.
Underscoring the need to take everyone into the tax net, he said that any income being derived from this country which crosses the benchmark set by the government should attract tax whether it was agriculture, industry or trading. “We are patriotic citizens and we would like to see Pakistan growing and tax collection at optimum level so that development takes places all over the country.”
“Keeping in view all the expenditures, we really need at least a minimum tax collection of Rs12,000 billion but for that purpose, you will have to look where the funds were being lost instead of looking for them everywhere”, he said, adding that the ordinance was being considered as victimization for being in the tax net as the FBR, which has all the details of the filers would go for the easiest way by acting against filers instead of hunting for non-filers. “Before devising such laws, all the stakeholders should have been consulted and taken on board.”
Zubair Motiwala also pointed out that DLTL has not been extended as no extension notice has been issued since July 1, 2021 and the exporters have no idea whether DLTL was there or not. “Although DLTL claims worth Rs32 billion have been cleared by FBR and sent to the State Bank as well but the amount has not been released as yet”, he added.
Highlighting the issues of Karachi, he said that the Prime Minister announced an ambitious Karachi Transformation Plan (KTP) of Rs11,000 billion but nobody knows when it was going to come on ground and what was the progress so far. Representatives of business community, who know where exactly the development and upliftment works were needed in industrial areas, were also not being consulted in the transformation plan for Karachi. “The design of K-IV Project, which is the lifeline for Karachi, has been changed 11 times that resulted in escalating the cost of this project from Rs22 billion to more than Rs100 billion which was also a very serious issue.”
He was of the view that although Pakistan’s ranking in World Bank’s doing business index has improved to 108th but it was still too high because the business community has not been provided an even-playing field. “Within Pakistan, we don’t have an even playing field as Karachi was expensive when compared with the cost of doing business in Punjab and other areas. Although the government extended RLNG at $6.5 per MMBTU and electricity at 9 cents per unit to five zero rated sectors but the RLNG relief has not been given to industries in Karachi who just started receiving electricity at 9 cents after a gap of two-and-a-half months.”
He appreciated Finance Minister for allowing trade in rupees with Afghanistan but the State Bank has not issued relevant notification in this regard and the trade with Afghanistan has gone down by 60 percent.
President KCCI Shariq Vohra, while welcoming the finance minister, appreciated the strategies adopted by the government that led to consolidating the economy with a GDP growth of 4.8 percent whereas consistency was visible in the exports and the large-scale manufacturing was also performing well, creating a much comfortable situation not only for the government but also for the private sector.
Highlighting KCCI’s macroscopical perspective, he said that there has always been a mismatch in Exports vs. Imports as the exports remain stagnant in between US$22 to US$25 billion and the imports keep rising. Depreciating rupee value was also neither supporting the exports nor the businesses and the economy which can only be saved when the government devises effective strategies for enhancing the meager industrial base of the country and also creates an environment in which the industrial units could have surplus production.
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Business community rejects hike in oil prices
KARACHI: The business community has rejected the increase in prices of petroleum products and demanded the government to immediately withdraw the decision.
Anjum Nisar, chairman of Businessmen Panel, which is ruling body of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in a statement on Saturday said the move will hit the industry hard.
He said that the burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow.
Nisar said that the economy of Pakistan, particularly the SMEs are striving to deal with the post-corona economic crunch and need to get support.
Instead of providing subsidies or waivers, it is unjust to overburden the industries with a hike in the cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
He said that there is no denying the fact that oil rates have been on the rise in the international market now, but the government instead of passing on this surge to the public can reduce the number of taxes on petroleum products as the fuel is the engine of growth.
If fuel would be heavily taxed, the entire economy would suffer unprecedentedly, he said, adding that petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tons per month against the monthly consumption of around 800,000 tons of HSD.
The economy is already in a precarious situation, this constant back and forth will only increase volatility, when we ought to be heading for stability, he added.
He said that the cost of doing business and cost of production have shot up to the level of uncompetitiveness. The cost of borrowing was huge and capital financing has become more expensive.
The business leader said Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, particularly in the post-corona economic slowdown as the country’s exports have been witnessing a major setback in present days due to the high cost of electricity, which has become a major stumbling block in industrial development and boosting exports.
He said that fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in the socio-economic development of a country.
Mian Anjum Nisar said that industries need low-cost energy to bring down their cost of production, keeping their goods competitive in the international market. He said that the government, in present circumstances, would have to reduce the price of electricity along with the cut in the prices of petroleum products to bring down the cost of doing business and to promote industrial activities.
He said that due to the COVID-19 pandemic, business activities were already in decline and in this situation the government should take serious steps to cut the cost of doing business, as hike in oil rates would further enhance the cost of production, making transport more expensive.
It is to be noted that in a fortnightly review of petroleum products for the second half of September, the price of petrol has been increased by Rs5.00 per litre. The new price of petrol is Rs123.30 per litre, which was Rs118.30 per litre or a 4.2 percent increase.
Mian Anjum Nisar observed that with a view to improving the cash flow of businesses at this crucial time, the government will have to facilitate the industry through the reduction in tax ratio on all items including the oil products, besides lowering the markup rate. He said that at a time when country’s GDP ratio was very nominal amidst high cost of doing business, the industry needs maximum support and relief.
FPCCI former chief and BMP chairman said that high-speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to an inflationary impact. The price of light diesel oil has also been hiked, which is used in industries.