KARACHI: The Association of Builders and Developers of Pakistan (ABAD) has warmly welcomed Prime Minister Imran Khan’s decision to extend incentives for the construction industry until June 30, 2021.
(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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Magoo elected FPCCI president
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday announced the election of Mian Nasser Hyatt Magoo as president of the apex trade body for the year 2021.
The FPCCI in its Annual General Meeting held on December 31, 2020, at Federation House Karachi wherein the Election Commission announced the results of FPCCI Elections 2021.
As per the results of FPCCI Elections 2021, Mian Nasser Hyatt Magoo elected as President FPCCI with 180 votes while his opponent Khalid Tawab got 178 votes.
Khawaja Shazaib Akram elected as Sr. Vice President FPCCI with 197 votes while his opponent Abdul Rauf Mukhtar got 161 votes.
On the Association seats Athar Sultan Chawla, Hanif Lakhani, Chuhdary Muhammad Saleem, and Muhammad Arif Yousuf Jeva elected as Vice Presidents.
Adeel Siddiqui elected unopposed as Vice President from Sindh, Muhammad Zahid Shah elected as Vice President from KPK with 18 votes while his opponent Lali Shah got 8 votes, Raja Muhammad Anwar elected as Vice President from Punjab with 28 votes while his opponent Amir Anwar got 12 votes and Nasir Khan elected unopposed as Vice President from Balochistan. On the seat of Women Chamber Farzana Ali Ahmed elected unopposed as Vice President. Competition ties up at Federal Area with 4 votes to Qurban Ali and 4 votes to Naseer Mansoor Qureshi.
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Proposed new tax on car purchase resented
KARACHI: An association of industries and traders has resented proposed plan of the government to impose a new tax on purchase of motor vehicles.
Pakistan Industrial and Traders Association Front (PIAF) has voiced its serious concern over the imposition of new tax on the sale of new cars to control ‘On Money’ practice, saying the move will further enhance the prices of already world most expansive Pakistani four wheelers, said a statement.
PIAF chairman Mian Nauman Kabir said that the government has decided to impose up to Rs200,000 additional withholding tax on the purchase of new cars on the plea of discouraging ‘On Money’ but actually the move has been aimed at achieving FBR’s target of tax collection.
He said that the locally-assembled cars are very expansive mainly due to exorbitant government taxes and high profit margins of the assemblers despite the fact that their quality is very low.
The additional withholding tax of up to Rs200,000 will put more burden on the consumers, who are already buying the very costly vehicles as compared to rest of world.
He said that the consumers were upset due to unnecessarily long delivery time for vehicles by the manufacturers. In order to discourage the practice of “on money” the government, instead of taking some solid measures, has imposed additional Withholding Income Tax, which does not seem to be logical.
He said that government can control prices by checking various costs and then ensuring 20 or 30 percent profit of the company.
“Right now car manufacturers have 1-year advances, which is more than their total investment,” he said.
“Secondly, the government can definitely intervene to ensure quality, as a car carries a human being and human life is dependent on its quality. The companies in India, Canada or USA have different features and different safety modes and features. Same models in Pakistan have almost zero safety features whereas price in Pakistan is much higher. Let’s forget price for sometimes but at least give us a safe vehicle with less oil consumption,” he argued.
He said that nowadays 25 percent of the price is being charged in the name of on money. Even if you pay 100 percent you cannot get a car and have to pay ‘ON’ in lakhs, which is almost 25 percent of the total price that is right under the government nose and in knowledge of the concerned authorities, he added.
PIAF leader appealed the government to devise some mechanism to regulate the automotive sector in view of the quality as well as the prices in consultation with all stakeholders including the industry as well as the consumers.
Mian Nauman Kabir said that local manufactures revise their cars prices whenever they desire and that too without getting due approval from any authority, which affect the common people badly.
The Engineering Development Board (EDB) will have to devise some rules and regulations to benefit the consumers along with securing the interest of the auto assemblers in the upcoming auto policy, he said. PIAF also suggests the Senate Standing Committee on Industries and Production to take the notice of exorbitant and ever-soaring prices of cars in Pakistan along with illegal practice of charging ‘on money’ or premium, he added.
The Senate Standing Committee on Industries and Production, the Engineering Development Board, FBR, Pakistan Automotive Manufacturers Association and major Consumers Welfare Associations should sit together and finalize some mechanism to bring down the prices of automobiles in line with the rates of international market, by revising profit margins and decreasing taxes and duties in the larger interest of the public.
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FPCCI demands return filing date extension
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday demanded the tax authorities to extend the last date for filing income tax returns for tax year 2020.
In a message, Mian Anjum Nisar, President, FPCCI said that the date should be extended to facilitate the taxpayers considering spread of coronavirus.
The last date for filing income tax returns for tax year was expired on December 08, 2020. Many taxpayers were unable to meet the deadline and are now receiving notices from the Federal Board of Revenue (FBR) to file their returns along with fine and penalty.
Further, the FBR notices also contain warning of prosecution in case the returns are not filed along with fine and penalty.
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ABAD terms hike in steel, cement prices as conspiracy against Naya Pakistan Housing
KARACHI: Association of Builders and Developers (ABAD) on Tuesday expressed concerns over sudden rise in prices of steel and cement, the basic raw material for construction industry, and termed it as a conspiracy against provision of affordable housing scheme launched by the government.
Fayyaz Ilyas, Chairman, ABAD in a statement expressed deep concern over sudden increase in steel and cement prices.
The ABAD chairman demanded the federal government to take stern action against these unscrupulous elements, who are trying to sabotage steps of the government for reviving the national economy.
He said that despite the fact that most of raw materials are local, cement and steel manufacturers have raised exorbitant prices of cement and steel to a level of Rs625 per 50 kg bag of cement and Rs126500 of steel per ton, which is no way justifiable and it looks that cement and steel manufacturers cartels are hell bent upon to crush the construction industry.
He said that cement and steel are main ingredients of construction but manufacturers of these two materials are busy minting money without any justification and the Competition Commission of Pakistan looks helpless to take any stringent steps against these cartels, he added.
Fayyaz Ilyas said that the construction industry is the second largest job providing sector after agriculture that is the reason why Prime Minister Imran Khan is giving due importance to this industry and has started Naya Pakistan Housing scheme for those people who otherwise are unable to own their dream home.
But, he lamented that steel and cement cartels are trying to sabotage a noble cause of the Prime Minister and dent the national economy.
He appealed the government to take stern action against the steel and cement cartel to save the construction industry and the national economy.
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APTMA protests against FBR’s coercive action
LAHORE: All Pakistan Textile Mills Association (APTMA) has demanded the government of stopping coercive action initiated by the Federal Board of Revenue (FBR) and withdraw cases lodged against exporters and manufactures.
In a statement issued on Saturday, APTMA chairman Adil Bashir said that Prime Minister of Pakistan was all out to support the export-oriented sectors of Pakistan but some vested interests are bent upon frustrating the intents of the government by harassing exporters and hindering the unprecedented growth in exports.
According to him, exports from Pakistan have registered an impressive uplift over the last few months due to unflinching support by the prime minister but the pace of potential upsurge in exports may be retarted by unfriendly attitude of certain government functionaries.
He said that FASTER and Weboc systems of FBR have become hub of errors and glitches, and FBR has itself repeatedly publicly admitted that FASTER system had multiple flaws, mistakes and deficiencies.
He regretted that instead of correcting the system and making it more efficient, field formations of FBR have started lodging stereo typed FIRs without applying judicious mind and without an iota of evidence of malafide intention and mens rea on part of the said taxpayers.
In the absence of any willful default and without mens rea which are essential ingredient of initiating criminal proceedings, FIRs are being lodged which may pollute congenial business environment created due to hard efforts by the government. He asked how it was possible that an exporter claiming refund of tens of millions of rupees would indulge in any petty malpractice by adding another few million and create problem for himself.
In this regard, he particularly mentioned that Large Taxpayers Office (LTO), Lahore has recently registered FIRs against leading textile exporters in total disregard to the fact that computer system of FBR had itself erroneously uploaded input tax adjustment of sales tax twice.
Bashir said FBR system had uploaded the data twice erroneously due to system error in September 2019 and there was no misdeclaration or omission on part of the taxpayers.
He added that the alleged offence relate to only the month of September 2019 which establishes that it was not an individual act but result of systematic error of FBR itself.
He said that initiating criminal proceedings by LTO Lahore against major reputed companies even without confronting them or issuing show-cause notices is contrary to the principles of natural justice and amounts to gross harassment of leading taxpayers.
He said that it was very painful to name and shame all Directors of the mills by nominating them in the FIR without even conducting a meaningful inquiry and in the absence of any incriminating evidence.
He stressed that in case any agency of FBR finds any lapse in the compliance of tax laws, it should serve proper show cause notice upon the alleged taxpayer and no criminal proceedings should be initiated against any such person unless and until the case has stood scrutiny and test of an impartial judicial forum.
Adil Bashir offered the services of APTMA to FBR in conducting any meaningful inquiry against tax evaders, he added.
He expressed the hope that the Federal government would take stock of the situation and issue necessary directions to FBR for immediate withdrawal of FIRs in the larger interest of the business environment in the country and fostering of exports.
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FPCCI welcomes wavier of Form-E for small exporters
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday welcomed the decision of the central bank for removing the condition of Form-E to facilitate small scale exporters.
FPCCI President Mian Anjum Nisar in a statement applauded the State Bank of Pakistan (SBP) for the waiver of the E-form requirement for up to the US $5000 per consignment for small industries. He said that this move will facilitate the small exporters, especially women business entrepreneurs, and will tremendously boost the exchequer.
The State Bank of Pakistan has exempted exports from the E-form requirement for up to the US $5000 per consignment in order to boost exports in the changing situation of global consumer markets due to the Covid-19 epidemic crisis. The State Bank of Pakistan has issued a detailed regulatory framework to facilitate Business-to-Consumer (B2C) E-Commerce exports from Pakistan.
He said that this exemption will facilitate the exporters for sending goods directly to consumers market and will encourage many others who were not able to face the documentations complications.
FPCCI always recommends the Government for business friendly policies for the small traders and enterprises. FPCCI appreciates the Government and the State Bank of Pakistan for addressing the concerns and considered the recommendations of FPCCI in this regard.
The FPCCI welcomes the SBP statement in the perspective of global lockdown for Covid-19 pandemic, that consumer market place has now shifted from traditional market place to E-commerce.
Pakistan needs to adopt the modern business dynamics of E-commerce. In line with these trends, the SBP focused on facilitating cross border trade for B2C exports from Pakistan.
The SBP collaboration with the relevant stakeholders including the Business Community, Pakistan Customs, Ministry of Commerce, Courier Companies, and Banking Industry in a bid to develop a regulatory framework was also appreciated which will not only address the market needs but also take into account regulatory objectives.
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FPCCI says tax return filing drops by 23 percent
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday stressed the need of tax reforms in consultation with stakeholders as number of return filing dropped by 23 percent.
FPCCI President Anjum Nisar in a statement stressed the need for taking serious measures in close consultations with the real stakeholders to broaden tax base and improving tax-to-GDP ratio, as number of return filers have decline by more than 23 percent to 1.31 million tax returns till the first week of December 2020 compared to 1.69 million returns filed in the tax year 2019.
FPCCI President Mian Anjum Nisar said that the FBR has failed to obtain return of income from NTN holders and increase the number of active taxpayers during the last decade, indicating the bad governance and weak tax management of the tax department.
According to the data, the FBR has received about 23 percent less income tax returns for the tax year 2020 while the tax received with returns stand at Rs6.5 billion during the period against Rs12.8 billion of the same period of last year, reflecting a decline of 49 percent.
“There is an urgent need of reforming and simplifying the taxation system with the consultation of real stakeholders, besides addressing the issue of double taxation through integration of provincial and federal government laws and harmonization of FBR and Punjab Revenue Authority (PRA). He suggested that taxes should be charged one time by any provincial or federal government, as provinces levy same kind of tax which the federal government has already imposed, escalating the cost of production and discouraging the registered manufacturers.
He called for harmonization of Sales Tax and Income Tax laws, getting rid of conflicting provisions, suggesting enhancing tax base by automation.
He demanded the government to improve tax structure so that business and investment could flourish in the country, as the existing tax structure discourages investment. He requested the government to focus on reducing tax rates and expanding tax base by bringing all exempted sectors into the tax net.
He said that high tariff of utilities and regulatory duty on raw material are also the factors discouraging exports. He said that coordination between the government and the private sector was vital for economic growth, proposing the government to develop policies that could provide conducive business environment in the country.
He called for strict measures to stop illegal trade, as the smuggling is not only causing massive shortfall in revenue collection but also discouraging the legal businesses and documented economy.
Majority of the people don’t want to get them registered and preferred purchasing of smuggled goods mainly due to high duties on legal import.
He said that only direct taxes can improve tax collection, as the existing tax system is heavily skewed toward indirect taxation.
He said the sustainable solution to Pakistan’s problems lies in the structural reforms, as we can see very large inefficiencies in tax collection, which needs to be removed.
So, the tax compliance must be improved and tax base should be broadened, which cannot be achieved with a single policy change, but by a systemic approach.
He urged the authorities to introduce new tax incentives and extend the period of existing ones for attracting new foreign direct investments in line with the potential of the country.
“With a view to wipe out corruption there needs to develop local software and Apps with simplified system in Urdu so that interaction of human resource should be reduced.
The FPCCI has already submitted its proposals to meet the challenges being faced by trade and industry due to the outbreak of COVID-19, as its severe and adverse impacts on various aspects of the economy are quite visible.
These impacts had led to negative growth rate, deterioration in current and fiscal balance, disruption in supply chain, and increased unemployment etc.
“We have asked the the Federal Board of Revenue to reduce the tax rates to help increase competitive edge of indigenous products in both local and global markets, as high tax rates provide incentives for tax evasion and corruption and results in high cost of doing business.”
“The tax agency should conduct a study to find out what has gone wrong that even after penalizing the non-filers, they are happy to pay more by way of advance tax instead of filing returns,” he urged.
He recommended that the current sales tax regime of VAT mode should be reviewed and incase enforcement is not possible it should be overhauled, to eliminate corruption and the negative financial impact on businesses due to delay in refunds and provide level-playing field to the organized sector.
He said heavy reliance on withholding taxes is affecting the enforcement capabilities of the FBR administration, since majority of tax collections is through the withholding tax regimes and not through enforcement measures.
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Tax Return Filing: KCCI urges Prime Minister to facilitate taxpayers
KARACHI: Karachi Chamber of Commerce and Industry (KCCI) – the largest chamber in the country – has requested the prime minister to grant extension in the last date for filing return of income up to January 31, 2021.
KCCI in this regard sent a letter to Prime Minister Imran Khan on Monday and requested to extend the last date for filing income tax return.
It is important to note that the business community is approaching the executive of the country after the Federal Board of Revenue (FBR) refused to facilitate taxpayers to comply with mandatory requirement.
KCCI president Shariq Vohra has requested the government to extend the last date for filing Income Tax returns up to January 31, 2021 as many taxpayers have not been able to file their returns on time due to COVID-19 pandemic.
President KCCI has written a letter to Prime Minister Imran Khan in which it has been pointed out that the entire nation including taxpayers were hard hit by the first wave of Covid-19 and now second wave has gripped masses including the taxpayers particularly and tax practitioners which is a serious life threat for everyone.
Hence, the Federal Board of Revenue (FBR) must be directed to extend the last date for filing income tax return up to January 31, 2021 which would be widely appreciated by the business community, he added.
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Tax Return Filing: FPCCI approaches advisor to Prime Minister for date extension
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has approached advisor to Prime Minister on finance for the grant of extension in date for income tax returns for tax year 2020.
The last date for filing income tax return is December 08, 2020. However, the Federal Board of Revenue (FBR) has categorically rejected to extend the last date with the argument that it had already provided statutory time to taxpayers for making compliance.
On the other hand, taxpayers, tax practitioners/consultants and business community are of the view that they are facing difficulties such as calculation errors on the IRIS portal. Besides, the working environment is not friendly due to spread of coronavirus.
In this regard, Mian Anjum Nisar, President FPCCI and Sheikh Sultan Rehman Vice President have urged the Advisor to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh, and FBR Chairman Muhammad Javed Ghani to extend deadline for filing Annual Income Tax Returns from December 08, 2020 to February 15, 2021.
The President FPCCI said that a large number of business community members have not been able to file their tax returns mainly due to COVID-19 effects on whole of the working environment and now the second wave which is more severe and requiring strict observation of SoPs has also significantly disturbed business activities all over the country.
This has slowed down the normal economic and commercial activities.
He further informed that there are also some discrepancies being faced by the filers in filling of Income Tax Return when a tax payer is requested to file two types of returns relating to partnerships / importers & suppliers.
Mian Anjum Nisar President FPCCI and office bearers of the FPCCI have requested to extend the deadline of filing of Income Tax Return till February 15, 2021 as huge returns are pending for submission due to certain discrepancies while filling the returns, political situation and above all the severe COVID-19 rise in cases all over the country.