The Federal Board of Revenue (FBR) has introduced significant amendments through the Finance Act, 2019, bringing gold, jewelry, and other precious articles into the sales tax ambit by implementing reduced rates on supplies.
(more…)Blog
-
Traders call off protest on successful talks with Sindh governor
KARACHI: Karachi Tajir Ittehad on Sunday called off its three-day shutter down protest after successful meeting with Sindh Governor Imran Ismail.
The small traders representing various markets of Karachi city a day earlier decided to shut down their shops for initially three days in order to force the government to accept their demands related to taxation.
The traders had also demanded the federal government to replace Sindh governor.
Sindh Governor Imran Ismail in the meeting with small traders apologized for his remarks related to collection of taxes.
The governor assured the traders that the tax authorities would not take any adverse action against traders for next one month. He also assured the trade community for negotiations on taxation measures.
At the meeting the trade associations presented their chartered of demand.
The traders said that they were ready to talk with the chairman of Federal Board of Revenue (FBR). Till the meeting with the FBR chairman there will be no protest, the traders assured.
They said that the negotiations with the FBR chairman would be successful and in case of failure the traders would have no other option but to shut down their businesses.
The trade leaders including Jameel Pracha, Rizwan Irfan, Sheikh Alam, Hakeem Shaikh, Waqar Azeem and others were present at the meeting.
Leader of trade community Jameel Pracha asked the market associations to open their business on Monday July 08, 2019.
-
Immovable property cannot be purchased without bank account: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has barred purchase of immovable property by any persons making payment without banking channels.
FBR sources told PkRevenue.com that in this regard amendment had been made to Income Tax Ordinance, 2001 in this regard.
The sources said that amendment had been made to Income Tax Ordinance, 2001 which explained that immovable property valuing more than Rs5 million and other assets more than Rs1 million cannot be transferred without a bank accounts.
The new section introduced through Finance Act, 2019 is reproduced as under:
“75A. Purchase of assets through banking channel.
(1) Notwithstanding anything contained in any other law, for the time being in force, no person shall purchase—
(a) immovable property having fair market value greater than five million Rupees; or
(b) any other asset having fair market value more than one million Rupees, otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of amount from one bank account to another bank account.
(2) For the purposes of this section in case of immoveable property, fair market value means value notified by the Board under sub-section (4) of section 68 or value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.
(3) In case the transaction is not undertaken in the manner specified in sub-section (1),—
(a) such asset shall not be eligible for any allowance under sections 22, 23, 24 and 25 of this Ordinance; and
(b) such amount shall not be treated as cost in terms of section 76 of this Ordinance for computation of any gain on sale of such asset.”
-
Traders announces three-day shutter down protest against tax measures from July 08
KARACHI: Small traders have announced three-day shutter down protest in the commercial and financial hub of the country against the changes in tax regime, which are implemented through Finance Act, 2019.
The Tajir Action Committee in a press conference on Saturday announced the shutter down across Karachi for three days starting from July 08, saying that the changes in tax regime are not acceptable.
The committee presented its 11-point demands to the government and urged the authorities to withdraw or amend the laws to provide relief to small traders.
Rizwan Irfan, the senior leader of the committee, said that in case the demands are not accepted the protest would prolong.
Jameel Pracha, another leader, said that the decision to close down the markets was taken in consultation all traders association.
The committee demanded abolishing value added tax and reducing turnover tax from 0.6 percent to 0.3 percent.
Further the threshold of Rs10 million should be given for sales tax registration.
The annual income of Rs1.2 million should be exempted from income tax.
The condition of obtaining computerized national identity card (CNIC) should be relaxed up to sales of Rs50,000.
The government should introduce a fixed tax regime for retailers. The proposed fixed tax should be introduced in four different categories.
Income tax return forms should be introduced in Urdu language as well.
Tax audits should be stopped.
Mobile phone registration with the Pakistan Telecommunication Authority (PTA) should be stopped and a levy of Rs400 should be implemented.
Abolish 10 percent regulatory duty on import of second-hand (used) cloths.
The Tajir Action Committee also demanded to stop harassment by officials of Federal Board of Revenue (FBR). They also urged Army Chief to intervene in this situation.
The traders demanded replacing the governor of Sindh.
They said that the protest strike may prolong if their demands are not accepted.
-
FBR postpones implementation of new immovable property valuations
ISLAMABAD: Federal Board of Revenue (FBR) has postponed the implementation of new valuation of immovable properties for major cities of the country for calculation of tax.
(more…) -
FBR allows reduced duty rates for import of certain CBU vehicles
KARACHI: Federal Board of Revenue (FBR) has allowed reduced rate of customs duty on import of certain automotive vehicles in Completely Built Units (CBUs) under Automotive Development Policy 2016-2020.
Following are the automotive vehicles, which are granted reduced customs duty rates on import:
1. Agricultural Tractors, having an engine capacity exceeding 26 kW but not exceeding 75kW (PCT code 8701.9220, 8701.9320) at 15 percent.
2. Agricultural Tractors (other than mentioned at S. No. 1 above) (PCT Code 8701.9100, 8701.9400, 8701.9500) at 10 percent.
3. Fully dedicated LNG buses (CBU) (PCT Code 8702.9030) at one percent
4. Fully dedicated LPG buses (CBU) (PCT Code 8702.9040) at one percent
5. Fully dedicated CNG buses (CBU) (PCT Code 8702.9050) one percent.
6. Hybrid Electric Vehicle (HEV) (CBU) (PCT code 8702.2090, 8702.3090) at one percent.
7. Hybrid Electric Vehicle (HEV) (CBU) (PCT code 8704.2214, 8704.2294, 8704.2340, 8704.3240) at one percent.
8. Trailers (PCT code 87.16) at 15 percent
-
Aviation industry allowed duty free import of aircraft, spare parts
KARACHI: Federal Board of Revenue (FBR) has allowed duty free import of aviation related goods including aircraft and spare parts under National Aviation Policy 2015.
According to Finance Act, 2019 following goods related to aviation have been allowed duty free import:
1. Aircraft HS Code 8802.4000 at zero percent customs duty under condition whether imported or acquired on wet or dry lease. In case of M/s Pakistan International Airlines (PIA) Corporation this exemption shall be admissible on and from the 19th March, 2015.
2. Spare parts Respective headings at zero percent for use in aircraft, trainer aircraft and simulators.
3. Maintenance Kits Respective headings at zero percent for use in trainer aircraft (8802.2000 & 8802.3000).
4. Machinery, equipment & tools respective headings at zero percent for setting up Maintenance, Repair & Overall (MRO) workshop by MRO company recognized by Aviation Division.
5. Machinery, equipment, operational tools, furniture& fixture respective headings at zero percent on one time basis for exclusive use of New/Greenfield airports by company authorized by Aviation Division.
6. Aviation simulators Respective headings zero percent on one time basis for aircrafts by airline company recognized by Aviation Division.
The FBR said that for the purposes of this Part, the following conditions shall apply besides the conditions as specified in column (5) of the Table below:—
(i) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify that the imported goods/items are the company’s bonafide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969). In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;
(ii) the exemption shall be admissible on production of certificate by the Aviation Division, Government of Pakistan to the effect that the intending importer is operating in the country or intends to operate in the county in the airline sector;
(iii) the list of imported items is duly approved by the Aviation Division, Government of Pakistan in line with Policy Framework approved by the Government of Pakistan;
(iv) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall furnish an undertaking to the customs authority at the time of import that the goods imported shall be used for the purpose as defined/notified by the Aviation Division, Government of Pakistan under the Aviation Policy; and
(v) in case of deviation from the above stipulations, the Collector of Customs shall initiate proceedings for recovery of duty and taxes under the relevant laws.
-
Weekly Review: PSX likely to stay positive
KARACHI: Pakistan Stock Exchange (PSX) likely to remain positive in upcoming week owing to IMF package approval and appreciation in Pak Rupee value.
Analyst at Arif Habib Limited said that the market to remain positive in the upcoming week in lieu of the IMF package approval and recent appreciation of PKR against green back which will lift investors sentiments.
However, they pointed out risks to the index including economic concerns on account of high Current Account Deficit, slowdown in large scale manufacturing and further monetary tightening expected in upcoming monetary policy on the back of tariff hike of utilities (Gas and Electricity) which could trigger inflation noticeably going forward.
This week trading commenced on a positive note as investors rejoiced the 3 day extension in Tax Amnesty Scheme as well as finance bill approval in the parliament.
Furthermore, first tranche of the USD 500 million received from Qatar along with loans arranged from syndicated Banks and World Bank aided foreign currency reserves.
Tally by the end of first three trading days unveiled a positive run 995 points at the index.
However, investors resorted to profit taking post official agreement of the IMF Board for a USD 6 billion package for Pakistan coupled with strike from cement dealers, automobile dealers and closure of textile units on budgetary measures.
As a result, the benchmark KSE-100 index closed at 34,190 points, up by 288 points or 0.9 percent WoW.
Contribution to the upside was led by i) Fertilizer (+180 points) amid news of GIDC settlement of up to 50 percent, ii) Commercial Banks (+122 points) given indication of further rate hikes (tight monetary policy) by the IMF, iii) Chemicals (+18 points), iv) Insurance (+14 points), and v) Automobile Assemblers (+13 points).Scrip wise major gainers were FFC (+113 points), HBL (+86 points), NBP (+36 points), ENGRO (+35 points), and EFERT (+31 points).
Foreign buying continued this week clocking-in at USD 5.9 million compared to a net buy of USD 7.9 million last week. Major buying was witnessed in Power Generation & Distribution (USD 3.7 million) and Commercial Banks (USD 1.7 million).
On the local front, selling was reported by Insurance Companies (USD 4.6 million) followed by Mutual Funds (USD 2.6 million). That said, average daily volumes for the outgoing week were down by 41 percent to 87 million shares likewise value traded decreased by 29 percent to USD 20 million.
-
FBR transfers 20 sales tax BS-18 auditors
ISLAMABAD: Federal Board of Revenue (FBR) has notified transfers and postings of 20 sales tax auditors (BS-18) with immediate effect and until further orders.
Following sales tax auditors of BS-18 have been transferred through a notification issued on Friday:
01. Zulfiqar Ali Khokhar, Assistant Director, (Audit)/BS-18, Corporate Regional Tax Office, Karachi has been transferred and posted as Directorate of Internal Audit -IR, Karachi.
02. Zahid ul Bari, Assistant Director (Audit)/ BS-18, Directorate of Internal Audit-IR, Karachi has been transferred and posted as Corporate Regional Tax Office, Karachi.
03. Fazal Hameed, Assistant Director (Audit)/ BS-18, Regional Tax Office, Peshawar has been transferred and posted as Office of Commissioner Inland Revenue (Appeals), Peshawar.
04. Ajmal Khan, Assistant Director (Audit)/BS-18, Regional Tax Office, Islamabad has been transferred and posted as Directorate of Internal Audit, Rawalpindi.
05. Inam ul Haq, Assistant Director (Audit)/BS-18, Regional Tax Office, Islamabad has been transferred and posted as Directorate of Internal Audit, Rawalpindi.
06. Saifur Rehman Assistant, Director (Audit)/ BS-18, Directorate of Intelligence & Investigation, Peshawar has been transferred and posted as Regional Tax Office, Peshawar.
07. Syed Mehmood Ali Shah (18), Assistant Director (Audit)/BS-18, Directorate of Intelligence & Investigation, Peshawar has been transferred and posted as Regional Tax Office, Peshawar.
08. Aziz ur Rehman (18), Assistant Director, (Audit)/BS-18, Regional Tax Office, Peshawar has been transferred and posted as Directorate of Intelligence & Investigation, Peshawar.
09. Abidullah Jan Assistant Director (Audit)/ BS-18, Regional Tax Office, Peshawar has been transferred and posted as Directorate of Intelligence & Investigation, Peshawar.
10. Muhammad Javaid Akhtar, (Audit)/BS-18, Chief Commissioner Office, RTO Faisalabad has been transferred and posted as Assistant Director Corporate Zone, RTO Faisalabad.
11. Zaheer Ahmad, Assistant Director (Audit) / BS-18, Chenab Zone, RTO Faisalabad has been transferred and posted as Lyallpur Zone, RTO Faisalabad.
12. Abdul Rashid, Assistant Director (Audit) / BS-18, Lyallpur Zone, RTO Faisalabad has been transferred and posted as Chenab Zone, RTO Faisalabad.
13. Nasir Ijaz, Assistant Director (Audit) / BS-18, Chenab Zone, RTO Faisalabad has been transferred and posted as Lyallpur Zone, RTO Faisalabad.
14.Syed Shakeel Abbas, Assistant Director (Audit) / BS-18, Corporate Zone, RTO Faisalabad has been transferred and posted as Chenab Zone, RTO Faisalabad.
15. Ashiq Ali, Assistant Director (Audit) / BS-18, Jhang Zone, RTO Faisalabad has been transferred and posted as Office of Commissioner (Appeals), Faisalabad.
16. Riaz Hussain Tahir, Assistant Director (Audit) /BS-18, Chenab Zone, RTO Faisalabad has been transferred and posted as Corporate Zone, RTO Faisalabad.
17. Muhammad Nawaz, Assistant Director (Audit) /BS-18, Office of Commissioner (Appeals), Faisalabad has been transferred and posted as Jhang Zone, RTO Faisalabad.
18. Ghulam Abid, Assistant Director (Audit) / BS-18, Chief Commissioner Office (PAC Cell), RTO Faisalabad has been transferred and posted as Chenab Zone, RTO Faisalabad.
19. Ahmad Sohail, Assistant Director (Audit) / BS-18 19. Lyallpur Zone, RTO Faisalabad has been transferred and posted as Corporate Zone, RTO Faisalabad.
20. Syed Azhar Abbas Sherazi, Assistant Director (Audit) / BS-18, Corporate Zone, RTO Faisalabad has been transferred and posted as Chief Commissioner Office, RTO Faisalabad.
The FBR said that the above-named officers, if drawing performance allowance equal to. 100 percent of their basic pay, shall continue to draw the same on their new place of posting.
-
FBR asks SEPC to ensure quality financial reporting by registered companies
ISLAMABAD: Federal Board of Revenue (FBR) has asked Securities and Exchange Company of Pakistan (SECP) to ensure quality of financial reporting of registered companies.
In this regard Chairman FBR Syed Muhammad Shabbar Zaidi, in his letter to Chairman SECP, has requested to ensure correct and transparent submission of financial statements by the companies.
In his letter the Chairman has stated that it has been observed that in many cases the quality of the accounts/financial statements prepared by the financial businesses specially in the cases of private limited companies is not in line with the quality standards and in many cases huge additions to income, are made, which are in many cases, are non-defensible, in taxation proceedings.
Chairman FBR further added that quality of ‘Audit’ by the taxation officer is not as per best practices. FBR is improving the system and shall seek Institute’s assistance or guidance on the matter, he added.
The extension in date of filing for return for companies also for Tax Year 2018 has only been given to provide an opportunity to the companies, especially private companies, to review their accounts and file improved position if required. In the past, FBR’s stance on the matter was different and as per information, no case was ever referred to for any disciplinary proceedings against Auditors by the institute or Management of the companies by SECP to FBR.
“Now we intend to act diligently in the matter,” Chairman FBR added.
The government has initiated an overall reform package for improving documentation and improving the quality of financial accounting which form the basis of taxation.
The accounts prepared under the Companies Ordinance, 2016 form the basis for the same. However, this objective can only be achieved once the quality of annual financial statements are in line with the international best practices. It is therefore suggested that special and concerted emphasis be laid down by both the addressee institutions for assuring that the financial statements furnished reflect correct financial position and there is no possibility of any understatement, including non-compliance with the laws of taxation as prevalent in Pakistan especially withholding provisions.
In order to achieve this task, it is advised that immediate actions be undertaken to start the reformed process. Chairman FBR stated that necessary instructions be issued for the same to the relevant field formations.
Furthermore, if allowed under the law, the investigations and disciplinary proceedings initiated against the Directors and the Auditors by SECP and the Institute respectively, if any, are shared with the Federal Board of Revenue, if possible, under the law, in order to ensure proper accounting of income and amount of taxes due.
Chairman FBR assured that such information will remain confidential. Chairman FBR also suggested an urgent meeting with Chairman SECP in this regard.