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Tag: FPCCI

  • Conditions for masks import should be relaxed: Khurram Ijaz

    Conditions for masks import should be relaxed: Khurram Ijaz

    KARACHI: Khurram Ijaz, Vice President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the authorities to relax conditions on import of face masks and facilitate masses considering the spread of coronavirus.

    In a statement issued on Friday, Ijaz urged Drug Regulatory Authority of Pakistan (DRAP) to take measures for early release of stuck-up face masks at the ports.

    Khurram Ijaz said that the cases of coronavirus was on the rise. This requires that all medical facilities including face masks should be available in huge quantity.

    He said that the procedures of clearance for face mask import should be made easy.

    The vice president said that due to lethargy of DRAP a huge quantity of face masks were stuck up at the ports and it would badly hurt the supply chain, especially in the wake of rising coronavirus cases.

    The delay in clearance will also increase prices of masks in the local market, he added.

    He urged the authorities to consider the urgency and take immediate measures for release of stuck up masks.

  • FPCCI proposes duty free import of used cars for subsequent export

    FPCCI proposes duty free import of used cars for subsequent export

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed duty free import of used cars and their subsequent export after repair.

    The apex trade body in its proposals for budget 2020/2021 said that the UAE had developed Export Processing Zone (EPZ) for duty free import of used cars, their repair and subsequent export to different countries especially those of Africa.

    “On similar pattern a ‘Used vehicles EPZ’ be set up in Karachi, Port Qasim or Gwadar and import of both right hand and left-hand drive vehicles may be allowed under this EPZ for their export to different countries. Because of its more feasible sea route to Africa and land route to Central Asian markets, cheap labour, painters and mechanics, the proposed EPZ may turn out to more attractive than the ones in UAE.”

    The FPCCI also highlighted issue of import of stock lot and job lot goods. The apex trade body said that despite the fact that stock lot and job lot goods are available in the world at lower prices, but for the protection of local industry, their import is banned.

    Maintaining the ban for home consumption, permission may be granted for import of stock lot and job lot goods under Export Facilitation Schemes on 100 percent export basis.

    The FPCCI also said that import of used clothing and their exports after sorting, repair, washing and packing is allowed to exporters operating in EPZ.

    However, this facility is not allowed under DTRE scheme and is denied under other Export Facilitation schemes too. If the same is allowed, Pakistan can capture a bigger share because of its cheap labour.

    The FPCCI said that the global warehousing market is more than $ 1.0 trillion and is growing at a very fast pace. The Export Policy Order vide para 9(g) allows export of imported goods in same state – unprocessed form from bonded warehouse and the imported goods already cleared from home consumption.

    The FPCCI said that this is not in line with this global business practice. “Singapore, Malaysia, Sri-Lanka and a number of other countries allows such export, which helps in earning FE and generates employment,” it added.

    The issue is that re-export of imported goods in the same state is allowed but there is no procedure which allows refund of duty and taxes paid, neither such imports are covered under DTRE or any other export facilitation scheme (manufacturing bond, temporary imports, export oriented unit etc).

    No importer can import goods, ware house it and re-export after payment of import duty and taxes. He can re-export to mitigate his loss but cannot adopt it as a business to utilize cheap warehousing in Pakistan.

    It proposed the Ministry of Commerce and FBR to allow import for re-exportation under DTRE Rules subject to value addition of 5percent or 10 percent.

  • Manufacturers demand domestic supplies against FE should be treated as exports

    Manufacturers demand domestic supplies against FE should be treated as exports

    KARACHI: Manufacturers have urged the government to treat goods booked abroad on which foreign exchange (FE) has been transferred should be treated as export.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021, said that some manufacturers (like Dawlance etc.) are demanding that overseas Pakistanis may be allowed to send foreign exchange to manufacturers through banking channel for delivery of goods to their blood relations / relatives in Pakistan, which may be treated as export.

    Some stores outside Pakistan have contacted the manufacturers for delivery of goods in Pakistan. These stores in foreign countries will make consolidated payment in FE through banking channel to manufacturers in Pakistan.

    They have requested the manufacturers in Pakistan to send samples for booking of orders. The issue is that after payment of duty and taxes the goods made in

    Pakistan become more expensive.

    The Pakistanis expatriates abroad then prefers to purchase smuggled goods from the open market or send goods in baggage (better quality and less cost) declaring it as old and used goods after removing its packing etc.

    Store owners abroad have shown keen interest in booking Pakistani manufactured goods to be delivered in Pakistan.

    “It is, therefore, proposed that such goods, where orders are booked from abroad and foreign exchange is sent in Pakistan through banking channels, may be treated as exported goods and may be exempted from local duty and taxes or partial exemption may be given in the form of fixed duty drawback / rebate of tax to be notified.”

  • FBR advised to allow examination before filing GDs

    FBR advised to allow examination before filing GDs

    KARACHI: Federal Board of Revenue (FBR) has been advised to allow examination/ weighment should be allowed before filing goods declaration (GDs) in order to verify contents of containers.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021 submitted to the FBR said that as per proviso of para 1 Section 79 of Customs Act, 1969, in case of used goods, before filing of goods declaration, the owner can make a request to an officer of customs to permit the owner to examine the goods and thereafter make entry of such goods by filing a goods declaration.

    “As per KYOTO Convention of WCO guidelines Standard 3.9 “Before lodging the goods declaration the declarant shall be allowed, under such conditions as may be laid by the customs (a) to inspect the goods; and (b) to draw samples,” the FPCCI said.

    The apex trade body proposed that examination / weighment may be allowed before filing of goods declaration, in all cases, where the owner is in doubt about the contents of the consignment, especially in cases of machinery, fabrics, article of plastic and food items etc.

    “Keeping in view the above facts, the weighment / examination before filing of goods declaration may be allowed for all class of goods,” the FPCCI advised.

    The FPCCI also highlighted an issue related to time duration related to decision of cases as heavy demurrages were hampering economic activities.

    The FPCCI said that as per sub-section 3 of Section 179 of Customs Act 1969 (IV of 1969) the cases are required to be decided within 90 days of the issuance of show cause notice or within such period extended by the collector for which reason shall be recorded in writing, but such extended period shall in no case exceed sixty days.

    The FPCCI proposed that the period specified to decide the cases under sub-section 3 of section 179 should be fifteen working days instead of existing period i.e. 90 days and further the extended period of 60 days should be reduced to 07 working days as an estimated cost Rs.15000 to 20000 per day is incurred on a 40 ft container.

    Therefore, to reduce the cost of doing business and trade facilitation the cases should be decided within 15 working days.

  • FPCCI demands elimination of discretionary powers of tax officials

    FPCCI demands elimination of discretionary powers of tax officials

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded withdrawal of discretionary powers of tax officials including multiple selection of audit and entering business premises.

    Mian Anjum Nisar, President and Zakaria Usman, Convener, Budget Advisory Council of the FPCCI urged the FBR to withdraw the discretionary powers vested with the tax officials to avoid their misuse, provide relief to the taxpayers, simplify taxation law and restore the diminishing confidence of the assessees in the taxation laws – a pre-requisite for success of any scheme.

    The proposal is made as a part of the FPCCI presentation being made to the concerned quarters including Dr. Hafeez Shaikh, Advisor to the PM on Finance and Revenue, Razak Dawood, Adviser to PM for Commerce, Textile and Investment and Nausheen Javaid Amjad, Chairperson, FBR for incorporation in the forthcoming Federal Budget 2020-2021.

    He added that the FPCCI after identifying a series of such provisions vesting discretionary powers had given concrete proposals to safeguard the interest of the taxpayers against the misuse of discretionary powers.

    Regarding discretionary powers of conducting Multiple Audits / Amendment of Assessment under Sections 177, 214C and 122of Income Tax Ordinance, they elaborated, “Although a return filed, U/S 114 of ITO 2001, within time limit does qualify for Universal Self-Assessment Scheme (USAS) and considered to be Assessment Order deemed to have been passed U/S 120(1) of the Ordinance on the date of filing the return, but even then it may be amended as many times as may be necessary by the Inland Revenue officials within 5 years from the end of the financial year in which the return is filed which results in multiple tax assessments”.

    They therefore, proposed that the power to select the return of income may rest only with the FBR who is already having the powers to select the audit cases randomly through Computer U/S 214C of the Ordinance.

    However, they added, “In case where definite evidence is available with the department then the audit be initiated upto the transaction in question only”.

    These discretionary powers provide sufficient incentives to the Inland Revenue Officials to serve Audit Notices to the commercial importers and other such assessees who have already discharged their tax liability as full and final at the time of clearance of goods at customs stage and as such promote direct contact between a taxpayer and tax officials which is against the government policy as it encourage tax evasion and corruption.

    The FPCCI Chief Mian Anjum Nisar also lamented posting of Inland Revenue Officer at Business Premises under Section 40B of Sales Tax Act, 1990 to monitor production, sales of goods, stock position etc as it is out dated and unnecessary in the modern era of computerization and available methods of monitoring the entire production and supply chain.

    He argued, “It gives a perception of anti-business and anti-investment government policies, creates harassment and tantamount to revival of supervise clearance scheme of Central Excise in Sales Tax Act, 1990”.

  • Tax authorities consider reducing minimum tax rate: Zeeshan Merchant

    Tax authorities consider reducing minimum tax rate: Zeeshan Merchant

    KARACHI: Tax authorities have agreed to consider reducing minimum tax rate for corporate sector and individuals in the upcoming budget, especially in the wake of financial losses due to coronavirus pandemic, a senior tax consultant said.

    “In different meetings with Dr. Abdul Hafeez Shaikh, Finance Advisor to Prime Minister, Razak Dawood, Commerce Advisor to PM and senior officers of Federal Board of Revenue (FBR) have agreed to reduce minimum tax rate for providing relief to mitigate adverse impact of coronavirus,” Zeeshan Merchant, former vice president of Karachi Tax Bar Association (KTBA) said this while talking to PkRevenue.com.

    Merchant, who is also honorary consultant to Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that the actual proposal for the budget 2020/2021 is to reduce minimum tax rate for corporate sector to 0.5 percent and abolish this tax for two years in case of individuals and Association of Persons (AOPs).

    He said that in meetings Dr. Abdul Hafeez Shaikh and Abdul Razak Dawood appreciated the proposals and promised to consider in the budget for providing maximum relief to businesses.

    Merchant further said that the FBR chairperson also pledged to move this proposals after consideration for incorporation in the Finance Bill 2020.

    He said that due to coronavirus and subsequent lockdown many corporate entities would not able to post significant profits or declare substantial losses for the year.

    Merchant further said that the minimum tax applied on turnover when a taxpayer declare lower profit or declare gross losses to the year.

    The FPCCI in its proposals for fiscal year 2020/2021 said that the existing rate of 1.5 percent minimum tax is very high and results in financial hardships to the taxpayers.

    Due to the current economic conditions and its negative impact on productivity, the businesses are not operating at optimum level.

    According to changes vide Finance Act, 2016 threshold of turnover for individual and AOP for turnover tax at the rate of 1.25 percent decreased from Rs50 million to Rs10 million. This had adversely affected the true declaration of turnover and has created hardship for the taxpayers.

    After changes made in Section 113(1) of Income Tax Ordinance, 2001, now companies have to pay turnover tax even in case of gross loss before charging of depreciation. This has adversely affected the industry.

    Under section 113(2) (C) where Minimum Tax paid under sub section (1) exceeds the actual tax payable under Part I, Clause (1) of Division I, or Division II of the first Schedule, the excess amount is carried forward for adjustment against tax liability of the subsequent tax year(s).

    The FPCCI also proposed to reduce the minimum tax rate and enhance the limit of turnover to Rs50 million.

  • Time limit for customs valuation issuance should be fixed

    Time limit for customs valuation issuance should be fixed

    KARACHI: Federal Board of Revenue (FBR) has been recommended to fix time limit for issuance of customs valuation.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021, said that the validity of Valuation Ruling under Section, 25-A of the Customs Act, 1969 is life time utill or unless revised or rescinded by the competent authority and Genuine Importer suffer as the Assessing Offices reject the transaction Values and Increase the Values of Assessments.

    Time limit may be fixed for issuance of Valuation Ruling under subsection 1 of section 25A of Custom Act, 1969, may not be more than 30 days and validity period under subsection 4 of section 25A of the Act should not be more than 90 or 120 days as we have fast internet system in the world over.

    (i) The following proviso may be inserted after subsection 1 of section 25A of the ACT,1969.

    “Provided that the time limit to notify the customs values under subsection 1 of section 25A should not me more than 30 days from date of first initiative of the subject exercise”.

    (ii) The words after the “applicable” in subsection 4 of section 25A should be substituted as; “till ninety days from the date of issuance of determined customs values.”

  • FPCCI says lowering interest rate by one percent not to help economy

    FPCCI says lowering interest rate by one percent not to help economy

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday said that the decision to lower interest rate by one percent will not help the country to boost especially considering adverse impact of coronavirus.

    FPCCI president Mian Anjum Nisar while responding to rate cut by State Bank of Pakistan (SBP) and said that despite clear message by all segments of economy particularly trade and industry the SBP reduction of one percent policy rate is surprising and unfavorable to bleeding economy.

    He said that given the current deteriorating economic situation all the Central Banks are supporting by significant reduction in interest rate along with stimulus packages while current decision not based on forward-looking inflation.

    He further stated that the FPCCI deplores the regulator’s conservative stance where the speed and the magnitude of the response do not match the havoc caused by the virus.

    FPCCI completely agrees with the external account situation detailed in their monetary policy statement where current account deficit (CAD) will remain in control as was the case in April.

    He said that May and June imports will be even lower than 3 billion per month on account of fewer orders placed by importers due to depressed demand under lockdown.

    Nisar further said since the external situation is in manageable as per SBP, there is sufficient information available on the inflation front to forecast a much lower rate than 7-9 percent forecasted for next year by SBP.

    Importantly, SBP in their 17th March, 2020 MPC press release stated: “Average headline inflation is expected to remain within the SBP’s 11-12 percent forecast in FY20, before falling to the medium-term target range of 5-7 somewhat earlier than previously forecast.”

    FPCCI based on its own research tends to agree with SBP’s earlier assessment of 5 percent anticipated inflation. We would have understood a cautious approach if the situation was normal but in these unprecedented times, we urge the regulator to appreciate the gravity of the situation where most businesses are expected to accrue markup when their sales are ZERO.

    The need of the hour is to take a more aggressive approach to policy making where what can be done tomorrow should be done today.

    FPCCI acknowledges the regulator’s approach on refining their decisions and policies based on constructive feedback as has been demonstrated in multiple improved iteration of various refinance schemes. In the same spirit, we stand ready to work closely with the regulator in our quest to bring down the rate to 5% in the shortest possible time.

    Mian Anjum Nisar President FPCCI urged the SBP to shift its pre-COVID-19 mindset and adopt the policies according to the sentiment of the Prime Minister Imran Khan and Businesses community to bring out economy from crises.

  • FPCCI recommends audit exemption for commercial importers

    FPCCI recommends audit exemption for commercial importers

    KARACHI – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called on the government to reinstate audit immunity for commercial importers in the upcoming federal budget 2020–2021.

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  • FPCCI demands 400 basis points cut in policy rate

    FPCCI demands 400 basis points cut in policy rate

    KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday demanded the central bank to cut the policy rate by 400 basis points to five percent.

    The State Bank of Pakistan (SBP) is scheduled to release monetary policy statement on Friday May 15, 2020. The central bank in past two months reduced the policy rate by 4.25 percent to present 9 percent.

    FPCCI President Mian Anjum Nisar in a statement said that the State Bank of Pakistan (SBP) should bring down the interest rate to 5 percent.

    He said that the future anticipated expected inflation will further decline due to low demand and other effects of lockdown to control over spread of coronavirus.

    On the other hand external front is also presently sustainable due to foreign financial support and rescheduling of debt that has supported reduction in current account deficit.

    The FPCCI chief further stated that with both demand driven and import based inflation in check there is no reason to gradually bring down the interest rates when the case for immediate relief is apparent.

    He said economy of Pakistan is already hit very hard as business activities remain stop while they are paying 12 percent banks markup and cannot survive on such high KIBOR rate.

    There is 4-5 percent interest rate in Pakistan immediate regional competitors China, India Bangladesh.

    The SBP should also advice banks to revise KIBOR on a monthly basis instead of quarterly to pass on the benefit of lower rates faster to companies struggling to survive.

    The impact to banks on their deposits will be insignificant as majority is demand deposits instead of time deposits.

    Therefore, SBP lower interest rate to 5 percent in one go that is immediately reduction of 400 basis points rather lower in stages.

    He said that tough situations under COVID-19 demand support while conditions rationally suggest lowing of policy rate directly to 5 percent.

    While appreciating SBP role in sustaining economic growth through supporting trade and industry, Anjum Nisar emphasized upon financial relief by reduction in the interest rate.

    He said State bank should take measures and develop strategy to protect the pace of economic and trade progress of Pakistan Other- wise we will again face economic crises, lower industrial growth and shifting of industrial units in sick industry.