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  • Chartered accountants liable to penal action for issuing false tax certificate

    Chartered accountants liable to penal action for issuing false tax certificate

    KARACHI: Any auditor of professional accountancy firm is liable to penal action in case found guilty of misconduct in furnishing false tax certificate, sources in Federal Board of Revenue (FBR) said.

    Referring to Section 8B of Sales Tax Act, 1990, the sources said that tax authorities allowed input tax adjustment to a taxpayer on the basis of certificate issued by auditors of professional accountancy firms.

    “Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961,” according to Sales Tax Act, 1990.

    Section 20D of Chartered Accountants Ordinance, 1961 explains:

    “20-D. Orders by the Council if member found guilty.-(1) If, on receipt of the report under Section 20-B the Council is of opinion that the member of the Institute has been guilty of any professional misconduct specified in Schedule I, it may, after affording such member an opportunity of being heard, either personally or through counsel or another member of the Institute, make any of the following orders, namely:-

    (a) Reprimand or warn such member;

    (b) Impose such penalty as it may deem necessary not exceeding one thousand rupees; and

    (c) Remove the name of such member from the Register for a period not exceeding five years:

    Provided that, where it appears to the Council that the case is one in which the name of such member ought to be removed from the Register for a period exceeding five years or permanently, he shall not make any order but shall refer the case to the High Court with its recommendations thereon.

    (2) If the Council is of opinion that the member of the Institute is guilty of a professional misconduct specified in Schedule II, it shall refer the case to the High Court with its recommendations thereon.

    According to Section 8B of Sales Tax Act, 1990 taxpayers have not been allowed to adjust input tax except for some cases.

    Following is Section 8B of the Act:

    “8B. Adjustable input tax.– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

    Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:

    Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).

    (2) A registered person, subject to sub-section (1), may be allowed adjustment or refund of input tax not allowed under sub-section (1) subject to the following conditions, namely:–

    (i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

    (ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

    (3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

    (4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.

    (5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).

    (6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 15 percent.”

  • FBR gets information of property transactions

    FBR gets information of property transactions

    KARACHI: Federal Board of Revenue (FBR) has received information of buyers and sellers of immovable properties during the period July – December 2019, sources said.

    The sources in tax offices told PkRevenue.com that bulk of information was provided by provincial property registrar offices and housing societies along with complete details of buyers and purchasers.

    The sources said that the information would be used for detecting concealment of tax money and quantum of black money used in transactions.

    The sources said that there was huge gap between values of property declared at the time of registration or transfer with fair market values.

    They said that the property registrar offices and housing societies on behalf of the FBR collect withholding tax and deposit the same into the national kitty. Besides, working as withholding agents they also require to provide information of buyers and sellers under Section 165 of Income Tax Ordinance, 2001.

    The withholding agents under Section 165 are require to obtain information of persons making transactions such as: name, Computerized National Identity Card Number (CNIC), National Tax Number (NTN), and address of each person from whom tax was collected or to whom payments were made from which tax was deducted.

    As per law the withholding agents are required to provide details of all transactions and persons involved to the FBR by January 31, 2020 for the period July – December 2019.

    The sources said that the withholding agents require to collect withholding tax from seller under Section 236C and from buyers under Section 236K of the Ordinance.

    They said that in scrutiny process on the basis of information the tax offices would ask banks to provide payments details of buyers and sellers to identify the actual amount paid for transactions.

    The sources said that the tax authorities had been empowered to take action where fair market value was not declared in purchase of immovable properties.

    The real estate business is believed to parking lot for black money in Pakistan. Over the last few years the FBR made significant progress to encourage clean transactions in buying and selling of immovable properties.

  • Income tax return filing increases by 42%

    Income tax return filing increases by 42%

    ISLAMABAD: The filing of income tax returns has registered over 42 percent growth for tax year 2019 as compared with tax year 2018.

    Federal Board of Revenue (FBR) on Saturday said that the number of annual returns filed for tax year 2019 2.342 million by January 31, 2020 as compared with 1.645 million returns for tax year 2018 filed till January 31, 2019.

    The FBR attributed the increase in the return filing to improved confidence of people on the tax authorities.

    However, the FBR extended the last date for filing income tax return for tax year 2019 up to February 28, 2020.

    The FBR said that the tax collection for January 2020 was Rs320 billion which was 17 percent higher than in the revenue collected in the same month of the last year, showing 17 percent growth. Similarly, the total collection also registered 17 percent growth.

    The FBR said that the tax revenue on domestic sources posted 30 percent increase, which was never seen in the past.

    The FBR also issued refunds amounting to Rs120 billion in the current fiscal year as compared with Rs65 billion in the last fiscal year.

  • Coronavirus outbreak: declaration made mandatory on international arrival

    Coronavirus outbreak: declaration made mandatory on international arrival

    ISLAMABAD: The government has made mandatory for all passengers entering Pakistan to submit health declaration. The decision has been taken in the wake of coronavirus outbreak, as statement said on Saturday.

    All passengers entering Pakistan As per the instruction from Ministry of Health, all passengers entering Pakistan will be required to submit a Health Declaration form which will include contact details and brief travel history.

    The submission of those completed form will be necessary for entering Pakistan.

    Health Declaration Card will be distributed amongst all the passengers in plane.

    In accordance with the instructions of the Government of Pakistan and in view of Novel Coronavirus outbreak, all passengers are advised to fill up the form and handover to Health Staff in the International Arrival Lounge.

    Non-Compliance shall result in denial of entry to the country.

    The form contains demographic information of passenger, travel history and health status like issue of fever, cough and shortness of breath. This form is made for easiness of public.

  • Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    KARACHI: Federal Board of Revenue (FBR) has said that registered persons to pay Rs5,000 as penalty amount on each invoice for failure to obtain CNIC information of buyers.

    Sources in the FBR said that as per updated Sales Tax Act, 1990 up to December 31, 2019 any person who fails to issue an invoice when required under this Act, then such person shall pay a penalty of five thousand rupees or three percent of the amount of the tax involved, whichever is higher.

    The penal amount has been specified for Section 23 of the Sales Tax Act, 1990, which mainly deals with tax invoices issued by registered persons, who are also liable to obtain information of Computerized National Identity Card (CNIC) of buyers on sales above Rs50,000.

    The mandatory condition of obtaining CNIC information of unregistered persons has been applicable from February 01, 2020, which was to be applied from August 01, 2019.

    As per the updated Sales Tax Act, 1990, the section said:

    23. Tax Invoices.– (1) A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely:

    (a) name, address and registration number of the supplier;

    (b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

    Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing:

    Provided that the condition of NIC or NTN shall be effective from 1st August, 2019;

    (c) date of issue of invoice;

    (d) description including count, denier and construction in case of textile yarn and fabric, and quantity of goods;

    (e) value exclusive of tax;

    (f) amount of sales tax; and

    (g) value inclusive of tax:

    Provided that the Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons; Provided further that not more than one tax invoice shall be issued for a taxable supply.

  • FBR chairman Shabbar Zaidi on indefinite leave

    FBR chairman Shabbar Zaidi on indefinite leave

    ISLAMABAD: Syed Muhammad Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has gone on leave for indefinite period.

    According to a notification issued by the revenue board, Ms. Nausheen Javaid Amjad, BS-22 officer of Inland Revenue Service (IRS) has been assigned look after charge of the post of Chairman FBR with effect from January 31, 2020 during the leave period of Syed Muhammad Shabbar Zaidi.

    The notification has mentioned the start date of leave of the FBR chairman but there is no date mention about his joining.

    Previously Shabbar Zaidi was on leave from January 06, 2020 and FBR notification mentioned his date of joining from January 19, 2020.

    The latest notification about the leave of Shabbar Zaidi has strengthened the rumors that there was confusion in the economic team of the country.

    Sources said that Shabbar Zaidi was on leave due to bad health conditions.

    Shabbar Zaidi was appointed in May 2019 as Chairman of the FBR from private sector. He is the 26th chairman of the FBR.

    Following is the list of FBR chairmen:

    1)Mr. Mohammad Jehanzeb Khan29.08.2018  —-
    2)Ms. Rukhsana Yasmin02.07.2018 29.08.2018
    3)Mr. Tariq Mahmood Pasha04.07.2017 02.07.2018
    4)Dr. Muhamad Irshad19.01.2017 30.06.2017
    5)Mr. Nisar Muhammad Khan17.11.2015 18.01.2017
    6)Mr. Tariq Bajwa02-07-2013 17.11.2015
    7)Mr.Ansar Javed10-04-2013 30-06-2013
    8)Mr. Ali Arshad Hakeem10-07-2012 09-04-2013
    9)Mr. Mumtaz Haider Rizvi21.01.2012 10-07-2012
    10)Mr. Salman Siddique24.12.2010 21.01.2012
    11)Mr. Sohail Ahmad18.05.2009 24.12.2010
    12)Mr. Moinuddin Khan02.01.1998 06.11.1998
    13)Mr. Hafeezullah Ishaq11.11.1996 02.01.1998
    14)Mr. Shamim Ahmed28.08.1996 11.11.1996
    15)Mr. Alvi Abdul Rahim13.07.1995 28.08.1996
    16) Mr. Sajjad Hasan24.07.1991 03.10.1991
    17)Mr. Ahadullah Akmal16.08.1990 24.07.1991
    18)Mr. Ghulam Yazdani Khan22.01.1989 11.08.1990
    19)Syed Aitezazuddin Ahmed20.08.1988 02.01.1989
    20)Mr. I.A. Imtiazi11.08.1985 20.08.1988
    21) Mr. Fazlur Rahman Khan14.12.1980 11.08.1985
    22)Mr. N.M. Qureshi12.11.1975 14.12.1980
    23)Mr. M. Zulfiqar01.10.1974 12.11.1975
    24)Mr. Riaz Ahmad17.11.1973 30.09.1974
    25) Mr. M. Zulfiqar11.10.1971 17.11.1973
  • Headline inflation increases by 14.6% in January 2020

    Headline inflation increases by 14.6% in January 2020

    Pakistan is grappling with a significant surge in inflation as the Consumer Price Index (CPI) recorded a staggering 14.6 percent increase on a year-on-year (YoY) basis in January 2020.

    (more…)
  • Weekly Review: Market likely range bound on IMF talks

    Weekly Review: Market likely range bound on IMF talks

    KARACHI: The trading activities at the Pakistan Stock Exchange (PSX) likely range bound during the next week over talks between IMF and the Pakistan authorities for release of third tranche.

    Analysts at Arif Habib Limited said that the market appears range bound in the mid-term with IMF commencing talks with the Pakistani team next week over release of its third tranche under the $6 billion EFF.

    Moreover, local investors await final verdict of the FATF next month whereby decision over Pakistan’s status (White, Grey or Black) will be taken.

    With that said, long term prospects appear upbeat given improvement in the external account and stable PKR-USD parity.

    The benchmark KSE-100 index of the PSX is currently trading at a PER of 7.2x (2020) compared to Asia Pac regional average of 11.9x and while offering DY of ~6.6 percent versus ~2.8 percent offered by the region.

    With fear of contagion of the Chinese Corona virus across the world, global equities staged a slide with the local equity bourse following suit.

    This was primarily marked by lower crude prices at the beginning of the week, which kept the index-heavy E&P stocks under pressure. In addition, the SBP kept its benchmark policy rate unchanged in the latest monetary policy statement which triggered select Cement and Steel (leveraged) scrips to tumble during mid-week.

    Finally, concerns over rising inflationary readings and political pressure has also kept the index dull. The KSE-100 Index closed at 41,631 points (down by 1,002 points; 2.4 percent WoW).

    Sector-wise negative contributions came from i) Commercial Banks (-431ts), ii) Oil & Gas Exploration Companies (-303 points), iii) Power Generation & Distribution (-113 points), iv) Cement (-66 points), and v) Fertilizer (-41 points). Scrip-wise negative contributions were led by MCB (-126 points), PLL (-108 points), UBL (-97 points), HBL (-96 points) and HUBC (-95 points).

    Foreign selling this week clocking-in at USD 8.0 million compared to a net buy of USD 4.8 million last week. Selling was witnessed in Cement (USD 4.2 million) and Textile composite (USD 1.3 million).

    On the domestic front, major buying was reported by Individuals (USD 9.8 million) and Broker Proprietary Trading (USD 2.0 million). Average Volumes settled at 188 million shares (down by 1 percent WoW) while average value traded clocked-in at USD 46 million (down by 7 percent WoW).

  • Shazad Dada elected as OICCI president

    Shazad Dada elected as OICCI president

    KARACHI: Shazad Dada has been elected as president of Overseas Investors Chamber of Commerce and Industry (OICCI) for the term 2020.

    This was announced at the 160th Annual General Meeting of the OICCI held at the Chamber on Friday, January 31, 2020.

    Haroon Rashid, Managing Director Shell Pakistan Limited, was elected unopposed as the Vice President.

    The other elected members of the OICCI Managing Committee for 2020 are as follows:

    1. SYED ANIS AHMED, ABBOTT LABORATORIES (PAKISTAN) LIMITED

    2. IMRAN AHMAD KHAN, BAYER PAKISTAN (PVT) LIMITED

    3. GHIASUDDIN KHAN, ENGRO CORPORATION LIMITED

    4. IRFAN SIDDIQUI, MEEZAN BANK LIMITED

    5. MAREK ANDZEJ MINKIEWICZ, METRO PAKISTAN (PVT) LTD

    6. ASTUSHI FUJII, MITSUBISHI CORPORATION

    7. SAMER CHEDID, NESTLE PAKISTAN LIMITED

    8. DR. IMRAN RASHEED, NOVARTIS PHARMA (PAKISTAN) LIMITED

    The Incoming OICCI President Shazad Dada in his message to the members said that he strongly believes that Pakistan offers considerable growth potential for existing foreign investors and attractive opportunities for new investors.

    He said his conviction is supported by OICCI members who invested over US$ 13 billion in new capital expenditure in the last seven years.

    He opined that the current dip in the economic cycle of the country will soon revert back to a positive growth trend.

    He lauded the role of OICCI for promoting Pakistan to potential foreign investors during the Chamber’s regular interaction with foreign business and governmental delegations and senior diplomats based in and outside Pakistan.

    Shazad also appreciated the quality of OICCI business climate/perception surveys, the Chamber’s focused and continuing advocacy efforts for streamlining the taxation system, giving practical policy input for increasing the efficiency of energy sector, initiatives on women empowerment and gender equality, the Chamber’s role in improving the security environment, and in taking the Intellectual Property Rights regime in Pakistan to a higher level, which included the publication of a comprehensive IPR manual for the benefit of all innovators and brand owners.

    Shazad Dada is the Chief Executive Officer and member of the Board of Directors of Standard Chartered Bank (Pakistan) Ltd. He graduated with honours from University of Pennsylvania with Bachelors of Science and Bachelors of Arts degrees, and also has an MBA from the Wharton Business School, University of Pennsylvania.
    He is a seasoned banker and a prominent capital markets professional, with over 26 years of diverse experience with renowned financial institutions in the United States and Pakistan.

    Prior to joining Standard Chartered, he was the CEO of Barclays Pakistan. Shazad has also worked at the Deutsche Bank Securities Inc in New York for over 15 years in various capacities before moving back to Pakistan as Managing Director Deutsche Bank AG Pakistan

    Shazad is the Chairman of the Board of Trustee of Developments in Literacy (DIL) Pakistan, member of Board of Directors British Business Centre Pakistan.

    He is also a Council member of Institute of Bankers Pakistan. Shazad was recently recognised as the sixth top Advocate Executive globally by the HERoes Women Role Model Lists 2019 supported by Yahoo Finance for his achievements in promoting gender diversity at workplace.

    He is an avid golfer with a keen interest in a number of other sports.

  • Customs clearance of used cloth, shoes without banned

    Customs clearance of used cloth, shoes without banned

    KARACHI: The Central Health Department of the federal government has advised the customs authorities not to clear imported used cloths and used shoes without proper fumigation in the wake of coronavirus threat.

    The collectorates of Pakistan Customs have been informed through the fresh advisory on Saturday about the Pneumonia outbreak due to Novel CoronaVirus.

    According to the advisory, the customs stations have been asked that second hand clothings, used shoes and other worn articles should not be cleared without fumigation under the supervision of Port Health Establishment, Karachi till further orders.

    However, the department has no objection to clear other consignments.

    Earlier, on January 27, 2020 the Port Health Establishment in a letter to customs collectorates that cargo imported from affected areas in China should not be cleared without proper fumigation.