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  • FPCCI praises FBR chairman for limiting powers of IR officers

    FPCCI praises FBR chairman for limiting powers of IR officers

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has praised the newly appointed chairman of Federal Board of Revenue (FBR) for limiting powers of Inland Revenue officers in tax recovery through bank account attachment.

    Engr. Daroo Khan Achakzai, President FPCCI in a statement on Saturday hailed the directive of the newly appointed Chairman FBR Shabbar Zaidi, for not attaching the bank account of a taxpayer unless his Chief Executive Officer / Owner is informed at least 24 hours prior to attachment and approval of the Chairman FBR is obtained.

    He said that the FPCCI had been clamoring for long for keeping a deterrent against the misuse of discretionary powers by the tax officials for recovery of arrears and attachment of bank account under Section 48 of Sales Tax Act, 1990 and Section 140 of Income Tax Ordinance 2001.

    The FPCCI Chief elaborated that there were increased incidences of bank account attachment and other serious coercive measures taken by the tax officer under the garb of the Section 48 for recovery of arrears and such abuse of powers were creating trust deficit and lack of confidence of taxpayers in law which are pre-requisite for success of any scheme.

    Achakzai hoped that the directive would address the complaints of business community about the unnecessary attachments of the bank accounts for recovery of the disputed accounts from the bank accounts of the taxpayers without fulfilment of legal process. “In many cases accounts have been attached without prior notice of the CEO / principle officer owner of the business community,” he added.

  • Karachi Chamber welcomes restricting FBR officers for freezing taxpayers’ bank accounts

    Karachi Chamber welcomes restricting FBR officers for freezing taxpayers’ bank accounts

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has warmly welcomed the first order issued by the newly appointed Chairman Federal Board of Revenue (FBR) Shabbar Zaidi immediately after assuming charge in which all the Commissioners Inland Revenue have been barred from freezing bank accounts which was being demanded by KCCI since long.

    President KCCI Junaid Makda termed the order as ‘pro-business move’ and the first step in the right direction which would not only help in restoring the lost confidence of the business & industrial community but would also prove to be favorable for the economy as after seeing such pro-business initiatives, many individuals would prefer to come into the tax net, which would result in documenting the economy and improving the country’s lowest tax-to-GDP ratio.

    In a statement issued, Junaid Makda pointed out that by virtue of this order, it would be mandatory for all Commissioners of Inland Revenue to obtain permission from Chairman FBR prior to freezing any bank account while at least 24 hour prior notice will also be served to the owner of the bank account which the business and industrial community highly appreciates.

    He said that the Karachi Chamber had struggled a lot and has been vocally raising voice against massive discretionary powers which have been bestowed to FBR officers even at lower level, intensifying the hardships for the loyal taxpayers.

    “As the first step in the right direction has been taken, we, the business and industrial community of Karachi, expect more such moves in near future. We firmly believe that massive discretionary powers have to be curtailed which is the only way forward to improve revenue collection, ensure economic prosperity and make FBR a taxpayers’ friendly institution”, he added.

    While extending felicitation to Shabbar Zaidi, President KCCI advised Chairman FBR to remain steadfast and keep on taking such bold steps which are in the larger interest of the country and the business community.

    Junaid Makda also extended Karachi Chamber’s full support and cooperation to Chairman FBR for all his future endeavors towards improving the existing taxation system of the country which is in really bad shape.

    He hoped that the newly appointed Chairman FBR would also review and take KCCI’s Budget Proposals into consideration which have been compiled after taking inputs from all the stakeholders.

    “KCCI’s Budget Proposals have been delineated after intense brainstorming as we wanted to ensure that all our recommendations for Federal Budget 2019-20 are devised in such a manner that they prove to be favorable for the economy and ensure an enabling business environment for the entire business & industrial community of Pakistan”, he added.

  • PTBA assures full support to new FBR chairman

    PTBA assures full support to new FBR chairman

    KARACHI: Pakistan Tax Bar Association (PTBA) has assured full support to Syed Muhammad Shabbar Zaidi, newly appointed chairman of Federal Board of Revenue (FBR).

    In a statement issued on Saturday PTBA welcomed the appointment of Shabbar Zaidi as chairman of Federal Board of Revenue (FBR).

    The tax bar declared the appointment of Shabbar Zaidi as positive step of the government.

    The PTBA congratulated Zaidi for taking the reins of FBR and agreeing to dedicate his time and energy for the betterment of the country.

    The statement said that Zaidi is a globally known professional and is bringing with him the wealth of in-depth knowledge of taxation system, Pakistan economy and the problems which are holding it back.

    “We hoped under his leadership along with the team members of FBR the structural flows in the revenue collection system will improve,” according to the statement.

    The PTBA assured the newly appointment FBR chairman of their full support and cooperation.

  • Weekly Review: hopes of recovery in stock market on IMF program

    Weekly Review: hopes of recovery in stock market on IMF program

    KARACHI: With the IMF program expected to be announced soon, investor sentiment can be expected to rebound, analysts said on Saturday.

    The analyst at Arif Habib Limited said that clarity over the economic direction from the IMF program is likely to resuscitate confidence of investors.

    As Ramadan started this week, the local bourse continued its bearish trend with volumes continuing to slump. Talks between GoP and IMF are in the final round and an announcement of a program can be expected any time soon.

    Concerns of further interest rate hikes, depreciation of the PKR and fiscal consolidation measures (revision in energy prices, withdrawal of subsidies/tax concessions etc) kept the investment sentiment negative. The KSE-100 index closed at 34,717 points (-1,406 points WoW), down 3.9 percent WoW.

    Negative sector-wise contributions came from i) Fertilizers (313 points), ii) Oil & Gas Exploration Companies (284 points), iii) Cements (130 points), iv) Pharmaceuticals (113 points) and v) Oil & Gas Marketing Companies (108 points). Scrip-wise negative contributions came from ENGRO (131 points), PPL (104 points), SEARL (84 points) and MARI (83 points). Whereas, positive scrip-wise contributions came from NESTLE (32 points), HBL (21 points), and COLG (11 points).

    Foreign buying continued this week clocking-in at USD 10.4mn compared to a net buy of USD 4.8mn last week. Buying was witnessed in Commercial Banks (USD 10.9mn) and Cement (USD 1.0mn). On the domestic front, major selling was reported by Mutual Funds (USD 10.7mn) and Insurance Companies (USD 5.7mn). Average Volumes settled at 74mn shares (down by 30 percent WoW) while value traded clocked in at USD 23mn (down by 22 percent WoW).

    Other major news: i) Coal-fired power project’s receivables swell to $150mln, ii) Move to withdraw Rs700bn tax exemptions, says official, iii) Chaos in FBR as govt aims for budget on May 22, iv) Private sector tax expert named FBR chairman, and v) Public debt surges Rs3.6 trillion to a hefty Rs27.8 trillion.

  • Restriction on gold purchase by non-filers proposed

    Restriction on gold purchase by non-filers proposed

    KARACHI: Federal Board of Revenue (FBR) has been suggested to restrict non-filers of income tax returns from purchasing gold bars, jewelry and other luxury goods in order to broaden tax net.

    “In addition to the restriction on purchase of immovable property and motor vehicles by non-filers, the punishment should be made even severe by foisting a restriction or imposing an additional charge of tax, on non-filers upon purchase of other luxury goods, including gold bars and jewelry, paintings, antiques, electronics etc.”

    The suggestions were made by Institute of Chartered Accountants of Pakistan (ICAP) in its tax proposals for budget 2019/2020 in order to broaden the tax base and documentation of economy.

    The institute said that the proposed restriction would eradicate the indifference between a filer and non-filer, and giving a sense of benefit to the filers, while non- filers should be penalized heavily.

    Giving recommendations and rationales in this regard it said:

    — Increase withholding income tax and sales tax for non-filers/unregistered persons by 50 percent higher rates; ‘further tax’ on sale to unregistered person should be increased to 5 percent.

    — Extra tax on commercial and industrial utilities connection should be increased to 15 percent for unregistered person.

    — Separate teams should be made and assigned responsibilities to visit the local shops, retail outlets and services providers to verify that proper sales tax invoices are generated and persons are registered with revenue authorities, if not they should be heavily penalized and compulsorily registered.

    — All utility connections amounting to Rs2.4 million or more of non-filers should be forced to get registered by issuance of Show-Cause Notices.

    In case of noncompliance, their utility connections should be disconnected.

    — An additional charge of tax should be foisted on non-filers upon purchase of luxury goods, such as gold bars and jewelry, paintings, antiques, electronics etc.

  • Omitting condition on input sales tax claim proposed where tax unpaid by supplier

    Omitting condition on input sales tax claim proposed where tax unpaid by supplier

    KARACHI: Pakistan Business Council (PBC) has suggested to omitting the condition of disallowing input tax adjustment where tax unpaid by supplier.

    In its tax proposals for budget 2019/2020, the PBC said that according to Section 8(1)(ca) of Sales Tax Act, 1990, input sales tax is not allowed where tax unpaid by supplier.

    “A taxpayer is not entitled to claim input tax paid on the goods (or services) in respect of which sales tax has not been deposited in the government treasury by the respective suppliers.

    The PBC said that this provision needs to be omitted especially after the implantation of the STRIVe system.

    Giving rationale to the proposal, it said that the matter was challenged in the Lahore High Court (LHC), in a petition W.P.No.3515/2012 filed by D.G Khan Cement Company Limited.

    LHC permitted relief and declared the provision as unconstitutional.

    “With the implementation of the STRIVe system this is redundant,” the PBC said.

    The PBC further said that based on the Doctrine of Revenue Neutrality and plethora of judgments of superior courts, it is now a settled principal of law that if any liability for short paid tax is subsequently discharged, then the same cannot be recovered from the taxpayer again.

    However, unfortunately, such provision is not part of the Sales Tax Act, 1990.

    It proposed that Sub-Section 4B should be inserted in Section 11 of the Sales Tax Act with the purpose of introducing “doctrine of revenue neutrality”.

    It is a settled principal of law that if any liability for short paid tax is subsequently discharged, then the same cannot be recovered from the taxpayer again.

    Proposed insertion in Section 11 of the Sales Tax Act 1990:

    “(4B) Where at the time of recovery of sales tax under sub-section (1), (2), (3), or (4) and (4A), it is established that the sales tax that was required to be paid has been meanwhile been paid by that person or recovered from the supply chain, no recovery shall be made from the person who had failed pay the sales tax or had paid short-amount of sales tax.”

  • SITE Association hails FBR chairman’s no bank account freezing decision

    SITE Association hails FBR chairman’s no bank account freezing decision

    KARACHI: SITE Association of Trade and Industry on Friday hailed the very first decision by Shabbar Zaidi after assuming the charge as the chairman of Federal Board of Revenue (FBR) regarding curtailing powers of tax officers in recovery cases.

    “First decision taken by the Chairman will restore confidence of tax filers on FBR,” Saleem Parekh, President SAI, said in a statement

    He said that the association was pleased with the balanced approach on handling recoveries taken by the freshly appointed Chairman FBR.

    The condition of the Chairman’s approval before seizing bank accounts would make the process transparent by limiting the discretionary powers of field officers.

    It is expected that the Chairman will devise policies that will channel the full force of FBR on broadening the tax base instead of subjecting the current tax payers to different types of annual audits.

    The chairman must realize that the only way to broaden the tax base is to make the cost of doing business of non-filers more than the cost doing business of filers.

    The current system is heavily in favour of non-filers. A filer is subjected to Income tax audit, sales tax audit, withholding tax audit & audits before issuance of Income tax exemptions u/s 153 and u/s 148 on an annual basis whereas non-filers are allowed to trade, buy cars and properties and travel.

    The energies of FBR will be better spent if the focus is on non-filers who continue to enjoy many privileges with impunity.

    He hoped that a culture of tax collection with transparency, respect and oversight will flourish under the dynamic leadership of Shabbar Zaidi where filers will be considered as partners of FBR instead of adversaries.

  • Overseas Pakistanis send $17.87 billion in 10 months

    Overseas Pakistanis send $17.87 billion in 10 months

    KARACHI: Overseas Pakistanis have sent remittances worth $17.875 billion during first ten months (July – April) 2018/2019, which is 8.45 percent higher when compared with remittances in the same period of the last fiscal year, State Bank of Pakistan (SBP) said on Friday.

    Overseas Pakistani workers remitted $17.875 billion in the first ten months (July to April) of 2018/2019, showing a growth of 8.45 percent compared with $16.481 billion received during the same period in the preceding year.

    During April 2019, the inflow of worker’s remittances amounted to $1,778.90 million, which is 2 percent higher than March 2019 and 6 percent higher than April 2018.

    The country wise details for the month of April 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $427.82 million, $372.43 million, $269.56 million, $280.02 million, $175.44 million and $48.19 million respectively compared with the inflow of $399.56 million, $362.40 million, $250.91 million, $245.85 million, $167.68 million and $54.75 million respectively in April 2018.

    Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during April 2019 amounted to $205.43 million together as against $197.72 million received in April 2018.

  • Younus Dagha assigned additional charge of secretary revenue division

    Younus Dagha assigned additional charge of secretary revenue division

    ISLAMABAD: The federal government has assigned additional charge of secretary revenue division to Muhammad Younus Dagha, who is already serving as Secretary Finance.

    A notification issued on Friday by Establishment Division stated that Mohammad Younus Dagha, a BS-22 officer of Pakistan Administrative Service, presently serving as Secretary Finance Division, is assigned additional charge of the post of Secretary Revenue Division for a period of three months or till the posting of a regular incumbent; whichever is earlier, with immediate effect.

    The government a day earlier issued notification to appoint Shabbar Zaidi as the chairman of Federal Board of Revenue (FBR).

    Usually the chairman FBR is by virtue is also secretary revenue division. Since Zaidi has been picked from the private sector and he is not eligible to serve on a bureaucratic post.

    Therefore, the government assigned the additional charge to Mohammad Younus Dagha to serve as secretary revenue division.

  • No bank account freezing without informing taxpayer: FBR chairman

    No bank account freezing without informing taxpayer: FBR chairman

    ISLAMABAD: Shabbar Zaidi, the newly appointed Chairman of the Federal Board of Revenue (FBR), has made a swift impact by issuing new directives aimed at improving transparency and taxpayer relations. In his first major move after assuming office, Zaidi directed that no taxpayer’s bank account would be frozen without prior notice, ensuring that taxpayers are informed at least 24 hours in advance.

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