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  • Investors of saving schemes to explain source of income

    Investors of saving schemes to explain source of income

    ISLAMABAD: Investors of National Saving Schemes (NSS) will explain source of income for their existing investments under ongoing drive of the government to check money laundering and terror financing.

    The ministry of finance last week issued draft National Savings Schemes (AML and CFT) Rules, 2019 to document the investment and identify links of investments to Money Laundering and Terror Financing.

    Under the rules the Central Directorate of National Savings (CDNS) will conduct customers due diligence (CDD) of all existing and new investors of NSS.

    The customers will require to provide source of earnings for the investment and their annual income.

    Currently CSNS has 4 million customers and the total investment has increased to around Rs4 trillion by October 2019.

    According to the draft rules: Every customer, whether permanent or occasional and whether natural or legal person or legal arrangement, shall be identified for establishing business relationship and for the purpose following information shall be obtained, verified using reliable, independent source documents, data or information and recorded namely: –

    (a) full name as per identity or registration documents;

    (b) national identity card, passport, national identity card for overseas pakistanis, Pakistan origin card or alien registration card number, etc.

    (c) registration or incorporation number of business, if applicable;

    (d) residential address, telephone numbers and e-mail, if available;

    (e) business address, telephone numbers and e-mail, if available;

    (f) date of birth;

    (g) date and place of registration or incorporation of business, if applicable;

    (h) nationality

    (i) place of birth;

    (j) national tax number (NTN), if applicable;

    (k) nature of business and location, if applicable;

    (l) sources of earnings;

    (m) customer’s net worth in respect of legal persons, legal arrangements and high risk customers; and

    (n) annual income.

  • Stock market likely to cross 51,000 points in 2020

    Stock market likely to cross 51,000 points in 2020

    KARACHI: The stock market likely to cross 51,000 points during year 2020 owing to growth in earnings and justified price to earning ratio, analysts said on Monday.

    The analysts at Arif Habib Limited in its report on Pakistan Strategy 2020, said that Pakistan equity market is expected to generate a total return of 25 percent during 2020.

    They expect that the benchmark KSE-100 index of Pakistan Stock Exchange to reach 51,000 points by December 2020. The index target mapping methodology included: earnings growth; justified PER; and target price mapping.

    The analysts believed that the balance of payments front is quite manageable now with continuous decline in imports, thanks to Pak Rupee depreciation and taxation measures at large to curb imports, along with several inflows planned for the next year tagged with hot money flows which are expected to lead towards continuous increase in reserves of State Bank of Pakistan (SBP).

    The analysts said that the country has successfully managed to attract foreign investment in lucrative short term government papers. High yields coupled with strengthening currency have helped lure over $1.2 billion foreign investment in treasury bills, which is unprecedented in history. Further, this shows the confidence of foreign investors in the local currency parity and economic reforms, and could also trigger equities flows in the country in 2020.

    Earnings growth in 2020 is estimated to be 14.4 percent, the double digit growth is attributable to earnings growth in heavy weight including commercial banks (41 percent), power (53 percent), fertilizers (12 percent) and E&P (10 percent), which have a cumulative around 61.7 percent weightage in the KSE-100 index. Higher net interest income coupled with stellar earning rebound in large banks shall stem growth in the banking sector, whereas power sector profitability mainly stem from CoD of HUBC’s 130MW coal-based power plant.

    The analysts said that the local bourse is expected to amass strong returns in 2020 supported by ongoing PER re-rating hypothesis. The analysts view that firmness in external sector, stable foreign currency outlook, hot money inflows, increase in SBP foreign exchange reserves in external sector and strong earnings growth of over 14 percent will re-rate the market PE to ites mean average of 8.6x (14-year).

  • NCCPL to collect CGT for Oct-Nov on Jan 03

    NCCPL to collect CGT for Oct-Nov on Jan 03

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Monday announced to collection capital gain tax (CGT) for the months of October – November 2019 on January 03, 2020.

    In a communication sent to Pakistan Stock Exchange (PSX), the NCCPL said that the aggregate amount of CGT arising on disposal of shares at PSX for the period October 01, 2019 to November 30, 2019, would be collected on Friday January 3, 2020 through respective settling banks of the Clearing Members.

    The NCCPL advised all clearing members to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the said period have already been made available in the CGT System.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period October 01, 2019 to November 30, 2019, would also be collected from the Pakistan Mercantile Exchange on Friday January 3, 2020.

    Necessary details and reports for the said period have already been made available.

    Moreover, the aggregate amount of CGT arising on redemption of units of open end mutual funds have also been finalized for the period July 01, 2019 to November 30, 2019. Necessary details and reports have already been made available in the CGT System.

    Clearing Members and Pakistan Mercantile Exchange are hereby requested to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.

    The NCCPL warned that in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.

  • Sindh issues schedule for announcing budget 2020/2021

    Sindh issues schedule for announcing budget 2020/2021

    KARACHI: Sindh government has announced to present provincial budget for 2020/2021 in first or second week of June 2020.

    According to schedule issued by Sindh Finance Department the budget for the fiscal year 2021/2020 likely to be presented to the cabinet and the provincial assembly by the finance minister in the first or second week of June 2020.

    According to the schedule by May 28, 2020, the finance department would complete all budget documents, schedules, and summaries for the cabinet.

    The planning and development department would present finalized Annual Development Program (ADP) – 2020/2021 by third or fourth week of May 2020.

    The meeting of National Economic Council (NEC) is scheduled for first week of May 2020.

    The finance department would finalize new taxation proposals and review existing taxes and fees by April 30, 2020.

    The meeting of Annual Plan Coordination Committee (APCC) to be held by fourth week of April 2020.

    The finance department would finalize Medium Term Budge Framework (MTBF) 2022/2023 by March 31, 2020.

    The finance department would finalize of revised estimates for 2019/2020, budget estimates for 2020/2021 and SNE 2020/2021 for recruitment budget by March 31, 2020.

    Last date for incorporation of any modification in the ADP 2020/2021 for Annual Plan Coordination Committee by April 20, 2020.

    The Sindh government issued budget circular which is integrated the formulation of the Recurrent (non-development) & Development budget and it is being issued in consultation with Planning & Development Department.

    Accordingly two additional forms (Form BCC-X and BCC-XI) have been incorporated in the circular for the formulation of development budget.

    The Planning & Development Department will have the lead role in development budget formulation, whereas, the Finance department will be formulating the non-development Budget, Receipts and MTBF.

    All Administrative Departments are required to submit budgetary proposals on prescribed forms which will be scrutinized by Finance Department and Planning & Development Department in detail, as per prevailing practice.

  • Sindh finalizes action against tax defaulting motor vehicles from Dec 23

    Sindh finalizes action against tax defaulting motor vehicles from Dec 23

    KARACHI: Sindh Excise and Taxation Department is finalize arrangements for launching a drive against tax defaulting motor vehicles from December 23, 2019.

    Teams have been constituted to launch the drive against tax defaulting motor vehicles across the province.

    This decision was made at a meeting, chaired by the Minister of Excise and Taxation and Narcotics Control and Parliamentary Affairs, Mukesh Kumar Chawla.

    The meeting was also attended by Secretary Excise and Taxation & Narcotics Control Abdul Haleem Sheikh, Director General Excise and Taxation & Narcotics Control Shoaib Ahmed Siddiqui and other officers.

    Giving the briefing to the meeting, Director General Shoaib Ahmed Siddiqui said that a massive public awareness campaign had been launched through media so that they could deposit their taxes in a timely manner and on the occasion of the road checking campaign, tax defaulting vehicles would be confiscated and the vehicles would be returned only after payment of due taxes and the arrears.

    Addressing the meeting, the Minister for Excise and Taxation & Narcotics Control and Parliamentary Affairs, Mukesh Kumar Chawla, advised the owners of the vehicles to transfer the vehicles into their names immediately after purchasing the vehicle because driving on open litter is a crime.

    He added that if the vehicle was used in a crime, then the person whose name was at that time, would be considered legally the original owner while there were 15 branches of National Bank of Pakistan for the convenience of the people to deposit their due taxes have been assigned and the details of these branches are posted on the department’s website and published in newspapers as well.

    On this occasion DG Shoaib Ahmed Siddiqui told that National Bank Branches were at Awami Markaz, Clifton, Site Area, Nazimabad, Shahbaz Building Hyderabad, Millat Road, Korangi Industrial Area, M.A. Jinnah, Dinsu Hall, Fatima Road Jinnah Road Hyderabad, DHA, PIDC, I.I Chandigarh Road, Gulshan and High Court.

    In case of any problem, people might contact, Director Karachi 99203671, Director Mirpur Khas 0233-9290211, Director Sukkur 071-9310202, Deputy Director Admin. Karachi 021-99201410, Director Hyderabad 022-9200148, Director Shaheed Benazir Abad 0244-9370178 and Director Larkana 074-9410751.

    Provincial Minister Mukesh Kumar Chawla advised the owners of tax defaulting vehicles to deposit their taxes before December 23 to avoid any unpleasant situation on the roads.

    He also directed the officers/officials to remain polite with the owners of the vehicles but strict in implementing the law as he would not tolerate any lethargic attitude in this regard.

  • Benami properties with known sources not to attract penal action

    Benami properties with known sources not to attract penal action

    KARACHI: A person having known source of income for a property and keeps in someone else name will not attract penal action under Benami Transaction laws, sources in Federal Board of Revenue (FBR) said.

    (more…)
  • Final tax regime for certain amount under Income Tax Ordinance

    Final tax regime for certain amount under Income Tax Ordinance

    KARACHI: Federal Board of Revenue (FBR) has defined final tax regime for certain income with certain conditions explained under Income Tax Ordinance, 2001.

    Following are the income falling under Final Tax Regime under the Ordinance:

    Section 5: Tax on dividends

    Section 6: Tax on certain payments to non-residents.—

    Section 7: Tax on shipping and air transport income of a non-resident person.

    Section 5AA: Tax on return on investments in sukuks.

    Section 7A: Tax on shipping of a resident person.

    Section 7B: Tax on profit on debt.

    The Section 8 of the Ordinance explained the scheme and terms and conditions
    General provisions relating to taxes imposed under sections 5, 6 and 7
    (1)-Subject to this Ordinance, the tax imposed under Sections 5, 5AA, 6, 7, 7A and 7B shall be a final tax on the amount in respect of which the tax is imposed and—

    (a) such amount shall not be chargeable to tax under any head of income in computing the taxable income of the person who derives it for any tax year;

    (b) no deduction shall be allowable under this Ordinance for any expenditure incurred in deriving the amount;

    (c) the amount shall not be reduced by —

    (i) any deductible allowance; or

    (ii) the set off of any loss;

    (d) the tax payable by a person under section 5, 5A, 5AA, 6, 7, 7A and 7B shall not be reduced by any tax credits allowed under this Ordinance; and

    (e) the liability of a person under section 5, 6 or 7 shall be discharged to the extent that —

    (i) in the case of shipping and air transport income, the tax has been paid in accordance with section 143 or 144, as the case may be; or

    (ii) in any other case, the tax payable has been deducted at source under Division III of Part V of Chapter X.

  • IR barred from arresting women on tax default

    IR barred from arresting women on tax default

    KARACHI: The offices of Inland Revenue are prohibited for arresting women on charge of tax default. Besides, the offices also cannot arrest a minor.

    According to Income Tax Rules, 2002 there is prohibition against arrest of woman or minor.

    The commissioner of Inland Revenue shall not order the arrest or detention in the civil prison of: a woman; or any person who, in his opinion, is a minor or of unsound mind.

    The rules also envisaged certain conditions on IR officers regarding entry into dwelling house for arresting tax defaulter.

    For the purpose of making an arrest under these rules,-

    (a) no dwelling house shall be entered after sunset and before sunrise;

    (b) no outer door of a dwelling house shall be broken open unless such dwelling house or a portion thereof is in the occupancy of the defaulter and he or any other occupant of the house refuses or in any way prevents access thereto; but, when the person executing any such warrant has duly gained access to any dwelling house, he may break open the door or any room or apartment if he has reason to believe that the defaulter is likely to be found there; and

    (c) no room, which is in the actual occupancy of a woman who, according to the custom of the country, does not appear in public shall be entered into unless the officer authorized to make the arrest has given notice to her that she is at liberty to withdraw and has given her reasonable time and facility for withdrawing.

    In case of illness of a tax defaulter the commissioner can release by cancelling the warrant for the arrest.

    Release on ground of illness.-

    (1) At any time after a warrant for the arrest of a defaulter has been issued, the Commissioner may cancel it on ground of the serious illness of the defaulter.

    (2) Where a defaulter has been arrested, the Commissioner may release him if, in the opinion of the Commissioner of Tax, he is not in a fit state of mind to be detained in the civil prison.

    (3) Where a defaulter has been committed to the civil prison, he may be, released therefrom by the Commissioner on the ground of the existence of any infectious or contagious disease or on the ground of his suffering from any illness.

    (4) A defaulter released under this rule may be re-arrested, but the period of his detention in the civil prison shall not in the aggregate exceed that authorized by rule 164.

  • Customs announces auction of mobile phones in huge quantity

    Customs announces auction of mobile phones in huge quantity

    ISLAMABAD: Model Customs Collectorate (MCC) Islamabad has announced auction of huge quantity of mobile phones to be held on December 24, 2019 at the state warehouse of the collectorate.

    Following is the list of mobile phones to be presented for auction by the collectorate:

    01. Q-Mobile Model K-650: 600 pieces

    02. Nokia 1202: 20 pieces

    03. Nokia 101: 20 pieces

    04. Nokia 105: 30 pieces

    05. Nokia 1280: 29 pieces

    06. Nokia 1616: 17 pieces

    07. Nokia 108: 40 pieces

    08. Nokia 3310: 50 pieces

    09. Vego Tel Classis I-10: 70 pieces

    10. Super Jamboo 1700: 49 pieces

    11. Vego Tel I 650: 20 pieces

    12. Kechadda K 116 Plus: 10 pieces

    13. Q-Mobile IE 4: 70 pieces

    14. Q-Mobile SP 3000 PRO: 50 pieces

    15. Q-Mobile Power 500 Music: 39 pieces

    16. Q-Mobile XL 100 Music: 13 pieces

    17. X-100 (i): 40 pieces

    18. Max X-7: 20 pieces

    19. KV-K2: 17 pieces

    20. KV-K400: 01 piece

    21. KV-K300: 01 piece

    22. KV-K200: 01 piece

    23. Mobile Phones: 25 pieces

    24. Q E-4: 50 pieces

    25. Q X-5300: 23 pieces

    26. Q Super Star Music: 22 pieces

    27. Q J-55: 03 pieces

    28. Q K-180: 44 pieces

    29. Q Super Star Power: 25 pieces

    30. Q Power 9: 22 pieces

    31. Q XL-8: 13 pieces

    32. Q Canodro I: 24 pieces

    33. Q Power 2000: 236 pieces

    34. Q J-2000: 20 pieces

    35. Q Power Pro: 20 pieces

    36. Q 3310: 14 pieces

    37. China Cromax: 14 pieces

    38. Q S P2000: 150 pieces

    39. Rivo R-800: 135 pieces

    40. Vigo Tel: 200 pieces

    41. Q Gold Pro: 50 pieces

    42. Voice V-60: 100 pieces

    43. Q-S P2000: 150 pieces

    44. Rivo R-800: 135 pieces

    45. Vigo Tel: 200 pieces

    46. Q Gold Pro: 50 pieces

    47. Voice V-60: 100 pieces

    48. Mobile Phones assorted make and model: 2,592 pieces

    49. Q-Mobile Q-3330: 315 pieces

    50. Q-Mobile CS-3: 155 pieces

    51. Q-Mobile I-Stone X-20: 08 pieces

    52. Q-Mobile K-180: 1220 pieces

    53. Q-Mobile Hero Power: 648 pieces

    54. Q-Mobile E-1000 P: 838 pieces

    55. Q-Mobile E4: 753 pieces

    56. Q-Mobile 4000 PRO: 348 pieces

    57. Q-Mobile LI Classic: 498 pieces

    58. Sony Sov 33: 30 pieces

  • Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    KARACHI: Federal Board of Revenue (FBR) to issued sales tax valuation in order to plug revenue leakages on imported consumer items, sources said.

    The sources said that the FBR had identified massive misdeclaration and under invoicing on imported consumer items falling under Third Schedule of Sales Tax Act, 1990.

    In the latest budget 2019/2020, an amendment was introduced to Sales Tax Act, 1990 under which printing of retail price was made mandatory on imported consumer goods.

    The measure was introduced to end the assumed prices in order to recover sales tax on fixed retail prices on imported items.

    The law has been applicable since July 01, 2019 but due to difficulties faced by importers of such goods the FBR allowed relief in declaration without printing of retail prices subject to some conditions.

    The FBR issued Sales Tax General Order (STGO) on August 07, 2019 that the retail price, if not printed at import stage, can be printed at the port of import.

    According to the STGO: “If that is also not possible, the importer shall undertake to print the retail price after clearance of goods and shall pay sales tax on retail price which shall not be less than 130 percent of the customs value increased by assessed customs duties, excise duty and other applicable taxes and charges excluding sales tax.”

    The sources said that tax offices in Karachi conducted survey and found the selling price of imported consumer items was much higher than the declared value at customs clearance stage.

    They said that the finding of the survey had been sent to the FBR headquarters for taking further action.

    The printing of retail prices is mandatory for importers on items such as tea, juices, perfumes, household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets. These items shall also include house hold gas appliance, including cooking range, ovens, geysers and gas heaters.

    Besides items such as foam mattresses, paints, lubricating oils, storage batteries, tyers, motor cycles and auto rickshaws have also been included in the regime of printed retail prices.

    The sources said that as per latest development the FBR had decided to issue valuation of such imported consumer goods in order to realize correct sales tax at import stage.