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  • FPCCI resents electricity tariff hike, gas supply shortage

    FPCCI resents electricity tariff hike, gas supply shortage

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has resented increase in electricity tariff and supply shortage of gas to industry.

    Mian Nasser Hyatt Maggo, President FPCCI in a statement on Friday expressed concerns over electricity tariff hike and disconnection of gas for the industry.

    He said that instead of reforming the energy sector, the adhoc and painful decisions are being made detriment to domestic industry.

    He said that the much awaited outcome of negotiations between IPPs and government which was considered to be directed towards reduction in base tariff do not assures any decrease in the base tariff, which again is shocking outcome questionable as the private sector was of the view that the report published on IPPs which was required to be further expanded towards the eventual objectives of resulting in the reduced cost of energy for increasing the competitiveness of economy and mitigating the inflationary trapped and consumption requirement of the poor segment of the economy.

    He said that the spokesman on the energy has attributed the need of tariff hike due to bad and corrupt agreements made with IPPs in the past. He said that if so, such situation requires to be corrected through invoking all the civil and criminal remedies to correct the agreements by excluding the pay or take, reducing O&M cost, converting the repatriation cost from dollar indexation to rupee and relevant recommended measures in the report.

    He said that while appreciating the present government in ordering the inquiry in respect of agreement with IPPs, the outcome does not appear to be reciprocating for base tariff reduction and availability of electricity sale at reduced cost.

    He further said that the announcement of Rs40 billion per year off-take of financial burden on Government is marginal even against the present announced tariff base hike wherein one rupee hike is over charging consumers of Rs 100 billion on consumption of electricity.

    President FPCCI also said that such on & off increase in tariff is coming in the way of economic development, in specific loaded by the carried forward adverse effect of COVID-19.

    The hike if is linked to any part of the memorandum of understanding with IMF can be fairly convinced for freezing such tariff hike when IMF itself projected low economic growth. Such duplicity cannot be justified.

    On the other side the predictable outward and inward oriented trade has become hostage of keep on increasing gas prices and intending to disconnect the gas supply of captive power plants.

    He said that mismanaged RLNG cargoes by the Petroleum Division are also answerable to such abrupt and non-justified late decisions. He said that during last November the spokesman on energy and petroleum had promised that increasing demand of gas in the winter season will be met through increase in RLNG imports.

    It appears that this non-living promise has forced Government to take decision of disconnecting the gas for captive power of industry. The setting of the deadline for disconnection of gas from February 1, 2021and 1st March 2021 is too short time to adjust.

    He said that some industry is running on captive powers with some emergency required grid loads need more time to arrange all the equipment’s and settle all the requirements of Discos which would take considerable time.

    He said that even CPP’s of industry with equivalent power arrangement from Grid also requires back-up adjustments of power by the Discos which is again time consuming.

    Mian Nasser Hyatt Maggo, President FPCCI proposed that the time period provided be extended reasonably in order to shift to Grid power. He said that the penalty of bad agreements with IPPs on capacity and take or pay clauses is being shifted to industry with their self-generation through captive power plants which basically is assurance for reliability and un-interrupted supply.

    Discos have yet to claim such performance to supply un-interrupted electricity without load shedding. He said that government spokesman has claimed saving of 150 MMCFD gas by disconnecting CPPs of industry, while the gas leakages in the systems are four times of this saving of 150 MMCD.

    He wondered that if there is any efficiency in the management over sighting the political economy of the gas affairs.

    He further suggested that even if the government reduces gas loss by one-fourth, the abrupt imposition of such decision may not have been required to adversely affect the industrial economy.

  • Duty, tax above Rs1 million made mandatory through e-payment

    Duty, tax above Rs1 million made mandatory through e-payment

    KARACHI: The payment duty and taxes amounting above Rs1 million has been made mandatory through the electronic mode from January 20, 2021, said Wajid Ali, Director General, Reforms and Automation, Federal Board of Revenue (FBR).

    At a meeting with members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Wajid Ali said that the online system was introduced through a procedure in 2017 in collaboration with the State Bank of Pakistan (SBP), a statement said on Thursday.

    This system is connected with the WeBOC and payment of taxes can be made by pay orders and cash to create a balance.

    Such procedures are already adopted by a number of countries worldwide. The system is operated by a unique ID which is called a PSID number issued to the relevant users who are connected to approximately 16000 different branches of the relevant bank across Pakistan.

    In order to further ease the payment of taxes, the system is also supported by easy paisa / OTC on a mobile phone to the users as well and the facility through this system is available with the taxpayers on the basis of 24/7.

    No drastic adoption of the system was observed last year by the users and in order to enforce the online payment by the system, it is now automated in such a way that the payment of taxes beyond Rs. 1 million cannot be made through the old system of payment of taxes.

    “It is, therefore, mandatory to the taxpayers that they are bound to get PSID number if the amount of taxes to be paid accedes Rs. 1 million or above,” he added.

    The last date to adopt the new system by the taxpayers is January 20, 2021, as announced by the FBR so that the payment of taxes may be made more effective and transparent.

    This will also ease to compile the statistical data relating to revenue collection within no time. At present now 22 percent of the collection of taxes is being carried out with the help of a new electronic system and it is not out of place to mention that positive feedback is coming in from the taxpayers who are already using the facility.

    Mian Nasser Hyatt Maggo President, FPCCI appreciated Pakistan Revenue Automation Private Limited (PRAL) for improving ease of doing business and facilitating the business industry while presiding the meeting of FPCCI Standing Committee on Customs headed by Shabbir Hassan Mansha.

    He further said when it comes to business endeavors every business person has to deal with Customs, FBR, and SBP.

    Most people are confused by the complexity of processes. The meeting expects the experts to disentangle the process complications.

    A team of experts from Pakistan Customs and Pakistan Revenue Automation Private Limited (PRAL) joined FPCCI Head Office, Karachi the in the meeting of FPCCI Standing Committee on Customs, for a presentation with FPCCI member trade bodies across Pakistan simultaneously at FPCCI Head Office Karachi (Chair), Capital Office Islamabad and Regional Offices at Lahore, Peshawar & Quetta via Zoom Link to deliver the presentation.

    The team members include Mr. Wajid Ali, Director General, Reforms & Automation, FBR; Sanaullah Abro, Director Reforms & Automation, and Arshad Hussain, Sr. Manager, PRAL, Customs House, Karachi along with representative of State Bank of Pakistan (SBP).

    The presentation was attended by the trade bodies from all over Pakistan on Zoom.

    In the meantime, the trade bodies were also briefed by the other team members including representatives from the State Bank as to how to adopt the new system with minimum hurdles.

    During the question-answer session, the representatives of trade bodies from all over Pakistan were invited to share their views and queries in this respect. In general, the trade bodies have shown their interest and shown their willingness to register themselves within the newly adopted system of payment of taxes.

    The views were also shared by the representatives of trade bodies via Zoom Link from all FPCCI Stations who were present on Zoom.

    Shabbir Hassan Mansha, Convener, FPCCI Central Standing Committee on Customs informed that his committee will organize more sessions relevant to Customs, and SBP to enhance the knowledge and relevant information on the subject.

    Khurram Ijaz former vice president FPCCI while presenting the vote of thanks to the participants and the experts’ said that a close liaison between the FBR and SBP and trade bodies should be maintained by appointing a focal person from FBR and SBP respectively for the ease of trade.

  • Small traders seek FPCCI help in taxation, lockdown

    Small traders seek FPCCI help in taxation, lockdown

    KARACHI: Small traders have sought help of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in resolving their major issues including taxation and coronavirus related lockdown situation.

    In this regard a delegation of All Karachi Tajir Ittehad (AKTI) under the leadership of Chairman Atiq Mir visited the FPCCI to felicitate Mian Nasser Hyatt Maggo newly elected President of FPCCI on his success.

    The delegation shared its concerns over the issues of taxes, lockdown situation, the anti-encroachment drive of Government, maintenance of infrastructure, emergent situations during urban flooding, and fire incidents.

    Mian Nasser Hyatt Maggo President FPCCI said that unfortunately, the megapolis is lacking the chambers for SMEs, cottage industry, and the small traders, he suggested the step by step actions to resolve the issues of markets and business community, starting from a marked area and creating the best service model and carry on the successfully tested procedure throughout the city.

    He assured the social service of FPCCI to all business community without any discrimination. He proposed the delegation for a workable concept paper to set a line of action.

    The meeting suggested FPCCI, being the head institute of business and industry, to support in markets sustainability and small business enterprises of Karachi.

    A working group may be formed for assessing and resolving the issues under the umbrella of FPCCI.

    The small business sector is willing to avoid protest for their rights if FBR announces to facilitates the taxpayers and implement business-friendly modules of tax collecting.

    Mian Nasser Hyatt Maggo President FPCCI further advised the delegation to produce a pre-budget suggestion paper in the perspective of their issues, which can be included in FPCCI pre-budget recommendations to the Ministry of Finance, Government of Pakistan

    The meeting was attended by Athar Sultan Chawla, Hanif Lakhani Vice Presidents FPCCI and the AKTI members.

  • Magoo elected FPCCI president

    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.

  • Amnesty to builders, developers be extended for one year: FPCCI

    Amnesty to builders, developers be extended for one year: FPCCI

    KARACHI: Pakistan’s apex trade body has urged the prime minister to extend the date for availing a tax amnesty for builders and developers for one year.

    Mian Anjum Nisar, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) while appreciating the Prime Minister of Pakistan for introducing Amnesty Scheme for Construction Industry, said that the scheme has boosted the socio-economic status of daily wagers and supported the construction and its allied sectors.

    It was a tremendous decision for the mitigation of COVID-19 impact over Pakistan. This incentive scheme attracts the builders, developers, and purchasers of housing units and plots who have not availed of it yet.

    Even the negative economic effects of Covid-19 pandemic have not hindered the Construction Industry in providing immediate jobs back to the millions of daily wages earners.

    He informed that Prime Minister Imran Khan had announced the tax amnesty scheme for the real estate and construction sector in April 2020 and will remain valid till 31st December 2020.

    The relief package was for the construction industry with twofold aim of providing employment to daily wage earners, and spurring economic activity.

    Those availing of this scheme need to register with the designated FBR portal since the ordinance was promulgated from April 2020 to December 31, 2020.

    The immunity from declaring the source of income was also available to builders, developers, and the purchasers of the housing societies and projects, and tax on gains on investment had been waived for all citizens who wanted to sell their homes.

    The tax amnesty had been given as part of the Prime Minister Package to lessen the impacts of the COVID-19 outbreak on the construction sector.

    President FPCCI urges the Prime Minister to extend the time period of the Amnesty Scheme for Construction Industry and introduce the same amnesty scheme facility to other sectors and industries.

    This scheme can support the economy of Pakistan during the second wave of COVID-19 and it will proved to be a turning point for the economy of Pakistan & for the revival of the housing and construction industry in Pakistan.

    He further said that if the Amnesty Scheme continues for another year the daily wagers, the most vulnerable segment of the population can get back to work to earn a respectable earning for their families as they were fighting with the second phase of COVID-19 and poverty at the same time.

  • FPCCI demands return filing date extension

    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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  • FPCCI welcomes wavier of Form-E for small exporters

    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.

  • FPCCI says tax return filing drops by 23 percent

    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.

  • Tax Return Filing: FPCCI approaches advisor to Prime Minister for date extension

    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.

  • FPCCI demands expanding raw material list for reduced income tax rate

    FPCCI demands expanding raw material list for reduced income tax rate

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday urged the tax authorities to expand the list of raw material for purpose of reduced income tax rate at import stage.

    FPCCI President Mian Anjum Nisar while reacting to SRO 1240(I)/2020 dated November 20, 2020 stated that through this notification a very few number of raw material had been added to 12th Schedule for the purpose of reduced income tax rate at 2 percent at import stage.

    The Federal Board of Revenue (FBR) has allowed a list of industrial raw materials for benefits under 12 Schedule.

    The anomalies committee of FBR declared very few raw materials not to be included in the finished goods and allowed to pay 2 percent income tax instead of 5.5 percent this of course resolves an important issue of commercial importers but there is still a long list of raw materials to be considered the same way.

    The FPCCI has been emphasizing for the removal of duties / taxes on the industrial raw materials. However, the SRO 1240(1)/2020 dated 20-11-2020 cover a limited item that does not support industry, while there is an exhaustive list of industrial raw materials already contained in rescinded SRO 1125(1)/2011 dated 31-12-2011.

    In order to further facilitate the industry there is an immediate need to revise the list of industrial raw materials as per SRO 1240(1)/2020 dated 20″ November, 2020.

    FPCCI president strongly recommends addressing the grievances of the industry at the earliest and resolving the issues being faced by the industry through amendments and inclusion of all raw materials in the said SRO.