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  • Why non-filers happy in paying high withholding tax rates, FPCCI asks FBR

    Why non-filers happy in paying high withholding tax rates, FPCCI asks FBR

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed concerns over lower number of return filers and asked Federal Board of Revenue (FBR) to identify reasons that why non-filers happy in paying higher rate of withholding tax.

    According to a statement on Thursday, the FPCCI has finalize proposals for upcoming budget 2020/2021.

    The proposals have been drafted keeping in view of the objectives of (i) Revamping Taxation System (ii) Documentation of Economy (iii) Employment generation through Industrialization (iv) Promoting a responsive and equitable Taxation System (v) Infrastructure Development (vi) Trickledown effect of the fiscal space to the grass root level etc., and would be submitted to the concerned quarters within fortnight”.

    This was stated by Mian Anjum Nisar, President, FPCCI and Zakaria Usman, Convener of the FPCCI Budget Advisory Council.

    Elaborating the methodology of the budget proposals exercise, they stated that the FPCCI with a consistent commitment to developing and promoting a modern, responsive and equitable taxation system, has formulated these proposals on the basis of impartial, unbiased and transparent manner after taking a painstaking lengthy process which involved incorporating feedback received on matters related to revenue and taxation throughout the year from our members located across the country and input obtained from our member trade bodies, stakeholders, tax practitioners, knowledgeable people etc., through invitation of proposals, organizing workshops and holding a series of Budget Advisory Council meetings wherein these proposals were discussed in detail and some contradictory proposals were re-examined and final proposals were redesigned in line with the best interest of the country.   

    They informed that the FPCCI Budgetary document consists of three Volumes – Vol-I discusses issues / solution of macroeconomic nature ; Vol-II contains policy issues relevant to Taxation (Sales Tax, FED, Income Tax and Customs) ; while Vol-III contains Industry Specific Proposals received from FPCCI members .

    Moreover, the FPCCI would also submit its proposals to meet the challenges being faced by the trade & industry due to outbreak of COVID-19 as its severe and adverse impacts on various aspects of Pakistan’s economy is quite discern which may lead to negative growth rate, deterioration in current and fiscal balance, disruption in supply chain, increased unemployment etc.

    The FPCCI Chief Mian Anjum Nisar added, “The Macro Economic proposals contains long term action plan to boost exports ; promotion of Branding ; Enhancing SMEs sector ; Monetary Policy ; Creating Employment Opportunities through industrialization ; Taxpayers Bill of Rights ; Independent Tax Judicial System etc”.

    Zakaria Usman, Convener of the Budget Advisory Council disclosed, “In Direct Taxes, it has proposed to the Federal Board of Revenue (FBR) to reduce the tax rates to help increase competitive edge of indigenous products in both local and global markets; broadening of tax base; curtail parallel economy etc., as high tax rates provide incentives for tax evasion and corruption and results in high cost of doing business.

    At present the total numbers of NTN holders in Pakistan are over 4 million, however, the FBR has miserably failed to obtain return of income from such NTN holders and increase the number of active taxpayer during the last decade.

    They added that according to a study, 2.1 million Pakistanis (individuals) filed income tax returns in 2006-07 which shows that FBR during the last 14 years could not fetch much tax filers, despite prescribing higher withholding tax rates for non-filers”.

     “This underscores the need that FBR 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 proposed that it is desirable that measures should be taken to facilitate to those, who are already existing taxpayers and contributing in the national tax pool in all manners, so that they become goodwill ambassador for FBR.

    “Resultantly, since many years, the registered taxpayers are less than 1 percent of the population of our country, which need to be enhanced”, he concluded.

  • Prolonged industry closure to be harmful: FPCCI

    Prolonged industry closure to be harmful: FPCCI

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, urged the authorities to evolve strategy of functioning business activities during lockdown to prevent spread of coronavirus.

    FPCCI President Mian Anjum Nisar, while criticizing arrest of businessmen urged the relevant authorities to take serious notice of the situation.

    He also urged to devise Standard Operating Procedures (SOPs) to the trade and industry for smooth functioning as the economy of Pakistan may not face prolonged closure of the industry that will be harmful for the entire nations.

    He expressed serious concern over unfavorable behavior towards the trade and industry that are supporting the government to ensure economic sustainability in this crises where every segment of economy is suffering.

    He said that legal/representative forums are available to complaint against violation by any member of the business community. On the other hand the entire trade and industry has assured to the government for economic progress despite various challenges due to prevailing condition under COVID-19.

    However, such attitude discourages commercial activities to support the government policies and programs.

    Mian Anjum Nisar President FPCCI seriously expressed his concern over the arrest/detention of a member of the business community and termed it a discouraging environment for businesses where the industry is facing lot of challenges to compete and complete exports order that Pakistan needs to continue to bring foreign exchange through exports.

    He further told that the exporters are losing orders, nearly 70 percent export orders has been cancelled due to global environment and for completing remaining 30 percent we need to function smoothly adherence to health precautionary measures.

    But under such circumstances where industry has to be closed, no lay off labors, no facility for shipments, cash flow, banking and market obligation, how all these requirements could be met out when the authorities and agencies creating such problems of harassment and arrest/ detention of industrialists.

    He stated that at this time of global crises where most of the countries are losing trade and facing drastic decline in exports the government should follow policies that are favourable to industry and avoid from strict actions against trade and industry of the country.

    Those are following precautionary, safety and security measures at their factories to protect the environment from spread of virus may be supported uninterrupted production activities.

  • FBR extends time limit to 25 days for GD filing

    FBR extends time limit to 25 days for GD filing

    KARACHI: Federal Board of Revenue (FBR) on Monday extended time limit for filing goods declaration to facilitate traders and importers, who were facing difficulties due to lockdown.

    The FBR extended the time limit for filing of goods declaration from the existing 10 days of arrival of goods to further 15 days (total 25 days) for all Import General Manifest (IGMs) filed between March 17, 2020 and April 07, 2020.

    The FBR said that the customs collectorates across the country were operating normally, however, on account of the ongoing lockdown by provincial governments to address the prevailing pandemic of COVID-19, the importers and clearing agents were facing hardship in filing of goods declaration within the time limit prescribed under Customs Act, 1969.

    The consequent penalty on this account is causing undue hardship to the traders as the circumstances for late filing, which was beyond their control.

    The FBR said that it had received requests from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry (KCCI) for extension in the time limit for filing of goods declaration.

  • FBR urged to defer CNIC condition for six months

    FBR urged to defer CNIC condition for six months

    KARACHI: Business community has urged Federal Board of Revenue (FBR) to defer CNIC condition on purchases above Rs50,000 for at least six months.

    In a statement Saquib Fayyaz Magoon, Convener of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) standing committee on Sales Tax and Chairman Indenters Association of Pakistan (IAOP), urged Government to pay attention on economic crises due to lockdown for prevention of coronavirus pandemic and has demanded Prime Minister to defer CNIC Condition for 6 months on sale of goods to unregistered persons in view of the current economic crisis.

    Magoon Said due to situation caused by the coronavirus, all payments to exporters have been stopped and export orders canceled while the economic activities have also stopped. While there has been a severe crisis of cash flow in the market, therefore, by defer the condition of the CNIC will improve the cash flow situation, otherwise there will be another major financial crisis.

    He also requested the government to accept sales tax returns without CNIC and said that in the current economic crisis, now we will depend largely on the local consumer industry, who are already in crisis due to the CNIC condition.

    Prime Ministers adviser on commerce Abdul Razzaq Dawood in which he assured that cash flow would not be affected by the Coronavirus.

    So if he wants the cash flow not affected then CNIC Condition must defer for minimum six months so that business activities can be restored as usual.

    Magoon pointed to the difficulties facing the businessman community over the ban on courier companies due to the lockdown, said the original document of import shipment could not be reached in the banks.

    So as long as the lockdown is in place, the State Bank should issue clear instructions to the banks that the EIF be approved on the copy of the document to ensure uninterrupted clearance of imported goods. Because the original documents are required for EIF approval.

    Due to not being provided original documents is causing constraints and importers are not able to file a GD which is causing consignment storage and shed charges.

    Saquib Fayyaz Magoon appealed the Prime Minister Imran Khan that in view of the serious situation caused by the coronavirus, a directive should be issued to the State Bank that the EIF be approved on the copy of the document at the time of payment by the importers to the banks.

  • FPCCI calls for strategy to save national economy amid global meltdown on coronavirus epidemic

    FPCCI calls for strategy to save national economy amid global meltdown on coronavirus epidemic

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has urged the government to outline strategy to save national economy in the wake of global meltdown on coronavirus epidemic.

    FPCCI president Mian Anjum Nisar in a statement on Saturday urged the government to take preventive measures and develop strategy to protect the pace of economic and trade progress of Pakistan from likely impacts of world economic slowdown apprehended by leading think tanks due to the recent global spread of the novel coronavirus.

    Globally, more than 145,682 people have been diagnosed with coronavirus. The death toll above 5436, in China death toll 3173, South Korea, mass testing has turned up over 6,000 cases and more than 60 deaths.

    Italy has confirmed more than 17660 cases, along with more than 1200 deaths. Iran has announced 514 deaths and 11364 cases. The United States confirmed 41 deaths from the outbreak, along with more than 1264 confirmed cases.

    Mian Anjum Nisar said that in order to safe national economic system from the impacts of slowdown of world economy due to coronavirus and other global economic challenges government should announce economic relief package to protect trade and industry of the country. He informed that the Europe is now the “epicentre” of the global coronavirus pandemic.

    The Europe Union (EU) is the second biggest trading partner of Pakistan where around 20 percent of Pakistani exports have duty-free access to the Europe, while 70 percent avails preferential treatment.

    FPCCI under the current scenario has organized a consultative session seeking feeding back from the stake holders on likely impact of this coronavirus on Pakistan’s foreign trade.

    The session was attended by Dy. Governor SBP Dr. Murtaza Syed, Dr. S.M. Qaiser Sajjad Secretary General, Dr. Samreen Sarfarz Pakistan Medical Association, Dr. Adil H. Haider Dean Aga Khan Medical University, Dr. Ijaz, health department of Sindh Government, Aga Fakhar Hussain Additional Secretary Industry & Commerce Sindh, Dr. Saeed SINA Welfare Trust, Prof. Dr. Zarna Wahid, Dow University of Health Sciences, Pakistan National Shipping Corportation and KPT. The session was chaired by Sheikh Sultan Rehman Vice President FPCCI.

    The chief of the apex trade body also informed that the US Congress has voted for a US $ 50 billion emergency funding package to fight the coronavirus. Several central banks around the world, including the U.S. Federal Reserve, have lowered interest rates to support their economies amid the coronavirus outbreak. Lowering interest rates make borrowing costs cheaper and could encourage business to take loans and spend which will in turn stimulate the economy. He further stated that the IMF is making available US $ 50 billion in emergency funding to help poor and middle-income countries.

    Mian Anjum Nisar President FPCCI emphasized that as the inflationary trend shows declining that support to reduce interest rates while on the other hand to boost and safe economic activity all segment of economy needs to be supported and facilitated to contribute in economic growth.

    Other- wise we will again face economic crises, lower industrial growth and shifting of industrial units in sick industry. Government should also reduce the cost of doing business and encourage the domestic & foreign investors to make investment in country at this critical time when the global economy is shrinking.

  • Central banks lowering rates in response to coronavirus threat

    Central banks lowering rates in response to coronavirus threat

    KARACHI: Central banks of the world are responding to negative impact of coronavirus impact and they are reducing interest rate, said a top official of the State Bank of Pakistan (SBP).

    Syed Murtuza, Deputy Governor, SBP while addressing at a seminar on impact of coronavirus on economy organized by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday.

    The deputy governor said that due to deterioration in economy the central banks of many countries had reduced interest rates. He said that after Federal Reserve of the US the central banks of UK, Canada and Australia had also brought down the discount rates.

    Murtuza Sayed said that the spread of coronavirus disease (COVID-19) was different with every changing day.

    The cases in China are now on decline and situation is improving.

    He hoped that the bad situation would be improved by May this year. However, this epidemic may cause difficult economic situation for at least one quarter, he added.

    He said that according to the IMF the coronavirus would cause decline in world economic growth in 2020.

    He said that there was opportunity for Pakistan to improve exports in this situation. However, he said that Pakistan economy may have repercussions of world economic slowdown.

  • Exporters doubt refund payment release on FBR collection failure

    Exporters doubt refund payment release on FBR collection failure

    KARACHI: Exporters expressed concerns that their liquidity may be taken away by the government in shape of sales tax worth billions of rupees as Federal Board of Revenue (FBR) has failed to achieve its revenue collection target.

    Mian Anjum Nisar, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the exporters fear that their precious liquidity taken away by the government in shape of sales tax worth billions of rupees which is completely stuck up and refunds may be excessively delayed because the FBR has also failed to achieve its revenue collection target.

    FPCCI chief held a comprehensive detailed meeting with the leading export oriented sector at PHMA House, Karachi with Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum and urged the Government to honour its commitment with the export sector.

    The President, FPCCI said that the exporters are in real fixed and under stress as Government is not implementing the decision it has taken to support export oriented sector.

    The Advisor to Prime Minister on Finance promised that the refunds will not get stuck up whereby he and his team have made a commitment that after passing of budget, his team will hold meetings with exporters and devise an automated system like in Bangladesh or China.

    Through the automated system, exporters will get a major amount from bank or the State Bank and would not be dependent on the FBR. Advisor Finance promised that if the new refund system will not work, the govt. will revisit its decision in 3-6 month period. Since more than 8 months have been passed and the FBR FASTER system has failed for speedy refunds, therefore, the Govt. should honour their commitment and restore zero rating – No Payment No Refund Regime for the export sectors.

    President FPCCI further told that the Govt. has failed to refund sales tax claims under FASTER System of textile exporters as per commitment, to refund claim amount in 72 hours, contrarily the Govt. has not paid exporters’ claims for the last seven months.

    Approx. Rs100 billion of textile exporters liquidity held up under FASTER Refund System in last 8 months and total Rs210 billion are withheld with the government.

    Payment timeline for payment of Customs Rebate claims which previously reduced to 7 months has again been prolonged to 13 months.

    However, Government also committed that Customs Rebate, DLTL claims will also be paid electronically along with export proceeds.

    Reportedly, hundreds of exporters SMEs have stopped their production owing to liquidity problems who have not received their sales tax refund claims for last seven months and due to high rates of utilities shall be compelled for closure if their sales tax refunds are not released on immediate basis and utility tariffs are not rationalized to facilitate them to get new orders and resume production.

    The President FPCCI emphasized to implement power tariff of 7.5 cents/kwh including all charges across Pakistan including Karachi and RLNG at 6.5 dollars/MMBTU.

    President also mentioned that while notification of said tariffs was issued the time period inadvertently was missing, it should be for three years period as agreed.

    He further informed that the OGRA has separated zero rated industry from general industry for Gas Tariff while NEPRA is still not implementing the decisions of separate treatment for zero rated and general industry.

    Mian Anjum Nisar President FPCCI said that the tariff for electricity and gas should be fixed on yearly basis for the Export Oriented Sectors and Priority be given only to these sector as the Export Sectors have to make commitments to their buyers for 6 months in advance and frequent increase in the electricity and gas tariffs jeopardizes their entire planning and they suffer huge losses to keep up commitments to their foreign buyers.

  • FPCCI demands immediate release of Rs250 billion tax refunds

    FPCCI demands immediate release of Rs250 billion tax refunds

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded the government to release Rs250 tax refunds of exporters without any further delay.

    FPCCI President Mian Anjum Nisar urged the Prime Minister of Pakistan Imran Khan and Advisor to the Prime Minister on Finance to honour their commitment of disbursing sales tax refunds within 72 hours of submission of the claims.

    He informed that according to the exporters’ associations of Pakistan the stuck-up refunds claims of sales tax, income tax and duty drawback of five export-oriented industrial sectors – Textile, Leather, Carpet, Sports Goods and Surgical Goods- have reached to the tune of around Rs.250 billion whereas the FBR has also acknowledged the amount as Rs.200 billion.

    However, out of the total amount of Rs.250 billion, sales tax pending refunds are around Rs. 125 billion and the rest amount of over Rs. 120 billion is stuck-up on account of duty drawback on local taxes (DLTL) and customs rebates. Whereas only Rs.103 billion have been released so far.

    President FPCCI said that the number of sales tax refunds cases have been considerably increased after imposition of 17 percent sales tax on domestic supply chain of five leading export-oriented sectors and the government has failed to refund sales tax claim amount under FASTER system within 72 hours, rather Government has not paid exporters’ claims for the last several months.

    He apprehended that if the government does not realize the gravity of situation and exporter’s refunds are not released on war footing basis, the export sector will completely collapse leading to huge unemployment in the country.

    Mian Anjum Nisar said that the export is largely a function of industrial production, whereas large scale industry registered a negative growth of 6.45 percent during the first four months of the fiscal year 2020-21, therefore, exports have also registered a meager 3.2 percent growth during the first half of the year. Pakistan’s exports are stuck-up around $ 23 billion range since last year.

    He apprehended that FBR’s strict policy would completely hurt the value added export sectors and therefore, urged the government to take all necessary steps to release payments of pending refund claims to the exporters immediately and restore zero rating of sales tax that is no payment no refund regime.

  • FPCCI urges government to declare cotton emergency

    FPCCI urges government to declare cotton emergency

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday urged the government to declare cotton emergency in order to increase the crop size.

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  • FPCCI demands stop proposed gas price hike

    FPCCI demands stop proposed gas price hike

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded the Prime Minister to stop implementation of proposed hike in gas tariff.

    FPCCI President Mian Anjum Nisar in a statement strongly criticized the move to increase gas prices and urged Prime Minister Imran Khan to immediately stop the implementation of the proposal.

    He said that the proposal of the Ministry of Petroleum would seriously affect the industrial sector, especially exporters and value-added sector would be hit hard.

    President FPCCI has expressed his apprehension that accelerated gas prices will also affect the cost of energy as well as the cost of production of exportable goods.

    It will also hamper the competitiveness of the industry in International market, where industry is already facing severe problem on different fronts.

    He further added that this hike will increased the misery of the common people who are already facing 14.6 per cent headline inflationary pressures and lower purchasing power due to dollar Rupee parity as well as the commercial and industrial consumer would not be able to absorb it.

    Gas prices have already increased 31 percent last year. Earlier OGRA proposed 214 percent hike in gas prices however; the ECC had deferred the proposal to increase the gas prices during the last meeting.

    Mian Anjum Nisar President Federation of Pakistan Chambers of Commerce and Industry also stated that the economy of Pakistan is not in a position to absorb such sudden and large shocks.

    Pakistan’s exports are not expanding and are still below targets. At this stage increase in energy cost will definitely further destabilize economic environment which is already under pressure.

    Pakistan need to maintain price stability particularly for manufacturing and export- oriented sector so that economy remain on track for which present government is struggling hard.

    President FPCCI strongly urged the government to withdraw the proposal of the increase in Gas tariff otherwise; industry will face closing down which will ultimately result in unemployment and labour unrest.