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Tag: Karachi Chamber of Commerce and Industry

  • Commercial, industrial utility connections must be brought into tax net

    Commercial, industrial utility connections must be brought into tax net

    KARACHI: Federal Board of Revenue (FBR) has been urged to bring all persons having industrial and electricity utility connections into tax net to ease tax burden on existing taxpayers.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2021 said that currently the taxpayers and filers of income tax returns, particularly industrial entities are overburdened with multiplicity of taxes.

    Overburden of taxes on already registered taxpayers is depriving them of level playing field and business viability against non-taxpayers.

    The chamber proposed that all the entities engaged in business having commercial and industrial utility connections but are out of tax base should be brought to tax-net making them taxpayers and filers.

    According to NEPRA Industry Report 2019 and FBR Tax Directory Data 2018, the number of commercial and industrial consumers is higher as compared to registered Tax Payers with a huge difference, who must be brought into tax-net as they are commercial and industrial entities but out of tax-net.

    The chamber said that it would ease down the burden of taxes over registered taxpayers and shall also broaden the tax base resulting to further documentation of economy.

  • Tax recovery through bank accounts should only from unregistered persons

    Tax recovery through bank accounts should only from unregistered persons

    KARACHI: Federal Board of Revenue (FBR) has been urged to restrict its powers of tax recovery from bank accounts on unregistered persons.

    In its proposals for budget 2021/2022, Karachi Chamber of Commerce and Industry (KCCI) pointed out Section 140 of Income Tax Ordinance, 2001 that is related to recovery of tax from persons holding money on behalf of a taxpayer.

    According to the law for the purpose of recovering any tax due by a taxpayer, the Commissioner may, by notice, in writing, require any person –

    (a) owing or who may owe money to the taxpayer; or

    (b) holding or who may hold money for, or on account of the taxpayer;

    The chamber said that this provision and further access to information on bank accounts under other provisions of law, have been counter-productive and led to a flourishing cash economy. Many innovative ways have been evolved by businesses similar to block-chain and a local hundi system. Such provisions only affect the documented businesses while the entire undocumented sector is immune from such laws.

    The KCCI said that access to bank accounts may only be limited to accounts of unregistered persons with unusually high amounts of transactions.

    Commissioner should only be authorized to obtain information about the funds in accounts and to seek clarification as to the nature of transactions and sources of funds. Such persons may be brought into the tax-net.

    The chamber said that it will:

    1. Relief to the registered persons and restore confidence in banking system. Encourage official transactions.

    2. Bring unregistered persons into the tax-regime.

    3. Stimulate economic activities and growth. Increase bank deposits which may be used for lending to industry.

  • FBR suggested to stop intelligence, investigation raids

    FBR suggested to stop intelligence, investigation raids

    The Karachi Chamber of Commerce and Industry (KCCI) has called upon the Federal Board of Revenue (FBR) to reevaluate its approach to tax enforcement, urging a halt to the aggressive raids conducted by the Directorate of Intelligence and Investigation.

    (more…)
  • FBR proposed to restore sales tax zero rating

    FBR proposed to restore sales tax zero rating

    KARACHI: Federal Board of Revenue (FBR) has been proposed to restore zero-rating of sales tax with objective of ‘no payment no refund’.

    The FBR received proposals for the upcoming budget 2021/2022 from Karachi Chamber of Commerce and Industry (KCCI).

    It is highlighted that in the budget 2019-2020, the Federal Government rescinded SRO1125 and imposed 17 percent Sales Tax on erstwhile Five Zero-Rated Export Sectors and exporters are required to apply for refund after export of consignment.

    It is observed that the exporters who have filed their refund claims to date have received 35 percent of claims payment only while 65 percent of the refund claims are stuck up with the Government which is approximately 12 percent amount of exporter’s running capital.

    However, the profit margin of exporters is around 5 percent to 8 percent. Moreover, exporter can apply for refund only after export of consignment.

    In this manner their liquidity is stuck. Likewise, the exporters make purchases for production of export products at least six months in advance which is consumed based on export orders causing financial hardships.

    The KCCI proposed that it is imperative to revive SRO 1125 in its true spirit and reintroduce system of No Payment and No Refund of Sales Tax for the Five Export Oriented Sectors.

    Although the Government has streamlined the FASTER system, nonetheless, the exporters are facing liquidity crunch amid condition of filing claims only after dispatch of shipment which takes at least three months time. Consequently, the liquidity is held-up causing financial pressure on exporters.

    The chamber explained the benefits of reviving zero rating that the government must consider to restore and revive Zero-Rating under SRO1125 in real spirit or consider reduction in rate of Sales Tax from current 17 percent to 5 percent to facilitate the exports ensuring availability of required/ adequate liquidity and smooth Cash flow, to boost the confidence of Exporters to enhance their exports and cement their business ties with the foreign counterparts to capture true business potential.

  • KCCI proposes single digit sales tax rate

    KCCI proposes single digit sales tax rate

    KARACHI: Business community has recommended to bring the sales tax rate to a single digit in order to incentivize documentation and improve compliance.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 said that the rate of sales tax at 17 percent in Pakistan is among the highest in the region.

    “Realistically such high rate of Sales Tax is in fact a disincentive to documentation and compliance.”

    Mostly the indirect taxes at such high rate at source encourage smuggling, evasion, under-invoicing and mis-declaration. It has been a disincentive to documentation of supply chain and has only burdened a narrow base of registered manufacturers, importers and traders.

    The chamber proposed that the rate of sale tax should be reduced to a single digit on all sectors to reduce cost of inputs and provide support to reduce prices of consumer goods as well as the cost of exports.

    Giving rationale, it said that industry / economy will boost up, raise in the tax base, promote the documented & registered economy, and will generate revenue with growth.

    Smuggling, under-invoicing and mis-declaration will be curtailed. Fake and Flying invoices eliminated.

  • FBR urged to withdraw CNIC condition under sales tax law

    FBR urged to withdraw CNIC condition under sales tax law

    KARACHI: Federal Board of Revenue (FBR) has been urged to withdraw the mandatory requirement of Computerized National Identity Card (CNIC) on buying and selling under Sales Tax Act, 1990 till the time a sufficient number gets register for sales tax.

    Karachi Chamber of Commerce and Industry (KCCI) has highlighted the issue as by amendment to Section 8 (Sub-Sec.1, Clause M) of Sales Tax Act, and addition of 10th Schedule, it is mandatory to provide CNIC number of Unregistered person in the invoice. Similar statute has been added U/S.19A of Federal Excise Act, Sec.216A to ITO and Sec.156A of Customs Act.

    Moreover 3 percent further tax is also charged on sales to unregistered buyers even if the CNIC number is provided, which is totally unjust and tantamount to penalizing the registered persons who have to bear the burden of 3 percent further tax.

    The chamber said that rather than generating more revenue, this provision has resulted in proliferation of undocumented cash transactions.

    With hardly 45000 registered entities in Sales Tax Regime, it is very hard to find a registered buyer. This has affected the entire supply chain including manufacturers, importers and traders in Documented Sector and has led to greater advantage for smugglers and undocumented sectors as they do not have to face any such condition. Many registered person are now forced to issue flying invoices to registered persons to overcome CNIC condition and avoid 3 percent Further Tax.

    The chamber recommended that requirement of CNIC should not be mandatory till the time that number of registered persons in Sales Tax regime has substantially increased.

    Providing CNIC number should be optional and may be treated at par with STRN if provided in the Sales Tax Return.

    Further Tax on supplies to unregistered buyer should not be charged if CNIC number is provided in Sales Tax Return.

    In case CNIC number of unregistered buyer of Raw Materials is not provided, VAT may be charged at 1.7 percent on sellers of Raw Material.

    Giving rationale, the chamber said that it will discourage cash economy and encourage documentation by placing the trust in registered persons.

    Discourage Fake and Flying invoices which are issued to avoid 3 percent further tax.

    Enhance business transactions through banking channels and promote growth.

  • Customs reluctant in giving WeBOC access: ANF

    Customs reluctant in giving WeBOC access: ANF

    KARACHI: Commandant Anti-Narcotics Force (ANF) Brig. Syed Waqar Haider Rizvi has said that ANF’s examination procedure can be expedited if it was given access to WEBOC system which was being demanded since last three years but unfortunately Customs authorities were reluctant to give WEBOC access.

    “If we get access to WEBOC, it would make things easier for us and minimize the grievances being faced by business community. Although we have been constantly demanding access to WEBOC but KCCI must also do the same and take up this matter with higher authorities so that ANF gets WEBOC access which would surely prove favorable for all stakeholders”, he added while speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI).

    Deputy Director/ In-charge, Port Control Unit ANF Muhammad Ayub, President KCCI Shariq Vohra, Senior Vice President Saqib Goodluck, Vice President KCCI Shamsul Islam, Chairman Law & Order Subcommittee Junaid ur Rehman, KCCI Managing Committee Members and others attended the meeting.

    While referring to inspections being carried out by ANF and Customs Authorities at the airports, he said that the Custom Authorities initially carry out the inspection of baggage while ANF staff was the last one to perform the same task at the airport which outrages many passengers as they have to go through the same procedure again.

    “Hence, we felt it necessary to request Customs Authorities to jointly carry out the examination with ANF officials so that passengers’ hardships could be minimized but the customs authorities have not taken ANF’s request into consideration.”

    Replying to concerns expressed by meeting participants over unavailability of ANF staff that often delays the examination, he said that majority of the Terminal Operators and port authorities were unwilling to give space to ANF for setting up a small office which was the basic reason for delays. However, ANF, with a workforce of 3,000 personnel only across Pakistan, was trying its best to deliver within the available limited resources.

    “All stakeholders including traders, port authorities, Customs, ANF and Pakistan Coast Guard must sit together to discuss and resolve problems surfacing due to poor repacking after examination”, Commandant ANF said while responding to apprehensions expressed by KCCI members over poor repacking that damages the goods in transit.

    He said that ANF was cognizant of the hardships being faced by importers and exporters due to delays in examination of goods and was trying its best to minimize the grievances by examining minimum number of containers.

    Commandant ANF suggested that KCCI should give a focal person so that the issues faced by its members in dealing with ANF could be swiftly resolved. “Frequent interaction between KCCI and ANF would help in resolving most of the issues”, he said, adding that ANF carries out its activities for the betterment of Pakistan without any compromises.

    “We have to work collectively for creating an enabling environment”, he said while extending full support and cooperation to KCCI in promptly dealing with ANF related issues.

    Speaking on the occasion, President KCCI Shariq Vohra stressed that ANF must focus on improving its perception and has to fully facilitate the business community as in many cases, the Force was being accused of creating hurdles and delaying the clearance procedure.

    He was of the opinion that interaction between KCCI and ANF must regularly take place so that the issues could be regularly discussed and amicably resolved. “We are not against ANF activities as they have a major responsibility on their shoulders which is to intercept the influx of drugs and narcotics. Although stringent efforts are needed from all stakeholders to make Pakistan a completely drugs-free state but, the examination procedure has to be speeded up as at times, delays cause severe losses to business community.”

    The meeting participant raised concerns over delays in examination by ANF which leads to causing losses on account of demurrage, detention and ungrounding charges. They also suggested that ANF must enhance number of workforce and resources while the obsolete scanners at the ports must also be replaced with the latest ones and more scanners must also be installed at all the ports in Karachi.

  • No paper-based foreign exchange operation after June: SBP

    No paper-based foreign exchange operation after June: SBP

    KARACHI: All the banks will discontinue paper-based foreign exchange operation after June 2021, Managing Director of State Bank of Pakistan’s Banking Services Corporation Muhammad Ashraf Khan said on Monday.

    He said that digitalization of foreign exchange, which started in March 2020, has been expanded from 8 to 13 banks and majority of the banks will be processing 88 percent of foreign exchange digitally by the end of February 2021 and 98 percent by April whereas the banks will completely discontinue paper-based submissions after June 2021.

    MD SBP-BSC, while speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI) on Monday, added that the initiative to digitalize foreign exchange operation was taken to create ease for the business community by completely eradicating the paperwork and expediting the overall process which has successfully been implemented by many banks.

    Head of Foreign Exchange Operations Department SBP Shakeel Muhammad Paracha, Director Exchange Policy Department SBP Arshad Mehmood Bhatti, Vice President KCCI Shamsul Islam Khan, Chairman of KCCI’s Banking & Insurance Subcommittee Qazi Zahid Hussain, Advisor Banking & Insurance Subcommittee Ateeq ur Rehman and others attended the meeting.

    MD SBP-BSC further stated that everything has been transferred from manual to digital processing and the customers have the freedom to get online anytime either from their home or office to apply for delivery of remittances without any paperwork while the customers will receive updates and objections (If any) about his transaction on his/ her registered email address.

    While assuring full support and cooperation, he stressed that the business and industrial community must come forward to adopt the digital mode for foreign exchange in which the customers can get registered themselves and track progress of case while relevant bank staff is also intimated about the progress and history of all the transactions is also maintained in a paperless environment.

    Vice President KCCI Shamsul Islam Khan, in his remarks, pointed that the State Bank, in any economy, plays the role of a heart in the economic development of the country by ensuring smooth circulation of funds and it was heartening to see that the State Bank has also been responsibly playing its role in an efficient manner which can be gauged from improved economic indicators particularly exports and remittances which have witnessed substantial growth.

    “However, the growth in remittances being witnessed nowadays may not last long hence, the State Bank needs to come up with some kind of the effective policy or incentive package which encourages Non-Resident Pakistanis (NRPs) to invest in numerous sectors of the economy.

    Encouraging such investments by NRPs would prove would not only help in dealing with economic crises but would also promote industrialization and create abundant employment opportunities on long term”, he added.

    He also stressed the need to take concrete measures for effectively dealing with the menace of smuggling which terribly hinders the legal trade and causes losses to the national exchequer.

    In this regard, he particularly suggested to establish Common Industrial Zone or Common Industrial Park near Pak-Iran border where all Custom Duties/ taxes should be kept at minimum level while this zone should be fully equipped with required infrastructure and the gas and electricity supplies should be provided by Iran which would surely bring down the cost of doing business due to cheaper electricity and gas tariffs that would attract a large number of industrialists to set up their units and warehouses in this particular zone.

  • PSL becomes nuisance for citizens: Karachi Chamber

    PSL becomes nuisance for citizens: Karachi Chamber

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday expressed dissatisfaction over traffic management during Pakistan Super League (PSL) sixth edition saying that the return of cricket in metropolis has become the biggest source of nuisance for Karachiites.

    In a statement Chairman Businessmen Group (BMG) & Former President Karachi Chamber of Commerce & Industry (KCCI) Zubair Motiwala stated that the return of cricket in metropolis has become the biggest source of nuisance for Karachiites nowadays as more than half of the city’s population suffers terribly for so many hours because of poor traffic management plan in which some of the most critical arteries are blocked which is neither acceptable to Karachiites nor to the business community, hence it must be revisited straightaway.

    Motiwala pointed out that due to complete blockade of roads around the National Stadium, traffic is usually diverted to other roads which causes severe traffic jams at all these roads throughout the day while, the residents of the affected areas, which are densely populated, have to make efforts from pillar to post each day to reach their destinations.

    “Moreover, two biggest hospitals of Karachi are also situated on a road leading to the National Stadium Road which is also closed during PSL.

    “We have been receiving huge number of complaints from patients and their relatives who are either visiting Agha Khan Hospital or Liaquat National Hospital or National Institute of Blood Diseases (NIBD) which is right next to National Stadium as it has been witnessed that many ambulances rushing towards these hospitals remain stuck up in traffic jams on daily basis which enhances the chances of more casualties hence, the city’s administration will have to shred the existing traffic management plan and come up with some other viable strategy in which the main roads should not be blocked at any cost.”

    The Business & Industrial community demands from the city’s administration, particularly Commissioner Karachi Naved Ahmed Shaikh and DIG Traffic Iqbal Dara to look into this serious issue and take steps to reduce the hardships for Karachiites by immediately revisiting the existing traffic management plan, Motiwala said, adding that cricket, which is a source of entertainment, should not become a source of torture for Karachiites who are already suffering badly on the streets of Karachi due to dilapidated state of the infrastructure.

    Zubair Motiwala pointed out that even the business activities suffer badly during PSL days as the citizens of Karachi, after undergoing worst traffic conditions, prefer to somehow reach their homes only and refrain from visiting commercial markets for buying purposes which brings down the commercial activities and causes immense losses to shopkeepers.

    “Although it is a bit difficult to give the exact number for the losses suffered by business community but it could go up to billions of rupees due to diverse range of businesses and a large number of markets including the well-known Bahadurabad, Tariq Road and Millennium Mall etc. where business activities get terribly affected due to road blocks”, he said, adding that who would come to visit Bahadurabad, Tariq Road, Millennium Mall or other nearby markets for shopping from North Karachi, Gulistan e Jauher or any other area when they know it is going to be an uphill task to reach these markets due to road blocks and subsequent traffic jams.

    “Every year, KCCI receives dozens of complaints mainly from the shopkeepers who complain about limited business activities due to PSL and the same has started again this year. Hence, being the premier and largest Chamber of the country, KCCI will not remain silent and raise a strong voice at all available platforms until relief is provided to the perturbed citizens of Karachi”, Chairman BMG said.

    He demanded that instead of closing down the main Stadium Road, police vehicles can be parked to guard the stadium while the number of policemen and Rangers troops must also be enhanced and each law-enforcers should be deployed on the roadside at a distance of at least 20 feet away from the other at all the surrounding roads which would not only secure the stadium by creating a stronghold for preventing any unpleasant incident but would also minimize the hardships for commuters during PSL.

  • PIA offers 10pc discount on domestic, international tickets to Karachi Chamber

    PIA offers 10pc discount on domestic, international tickets to Karachi Chamber

    KARACHI: Pakistan International Airlines (PIA) has announced a 10 percent discount on air tickets of both domestic and international flights to members and staff of Karachi Chamber of Commerce and Industry (KCCI).

    The discount is available to members and staff at newly PIA outlet inaugurated at KCCI premises, a statement said on Wednesday.

    The discount is available at 10 percent on domestic and international flights not only to KCCI members and staff but also their family members.

    In this regard, a Memorandum of Understanding (MoU) was signed by Chief Executive Officer (CEO) PIA Air Marshal Retd. Arshad Malik and President KCCI M. Shariq Vohra at a ceremony organized at KCCI which was also attended by Chairman Businessmen Group (BMG) & Former President KCCI Zubair Motiwala, Senior Vice President KCCI Saqib Goodluck, Vice President Shamsul Islam Khan, Former Presidents Younus Muhammad Bashir, Shamim Ahmed Firpo & Junaid Esmail Makda and others.

    Speaking on the occasion, CEO PIA Arshad Malik paid glowing tribute to Late Siraj Kassam Teli for his exceptional services to the country, particularly the business & industrial community.

    “Because of his splendid work, Siraj Teli would go down in the history and will always be remembered. He was a fatherly figure who fearlessly raised voice for the rights of business community and Karachi city,” he added.

    He informed that PIA has recently airlifted a cargo of kinnow and was particularly focused on providing cargo facilities at competitive rates hence, KCCI members should use PIA’s cargo service for sending their cargoes at corporate rates which will be kept lower than the market rates. “You decide the price for cargo and we will live up to it,” he added.

    Arshad Malik was of the opinion that the revival of PIA was a challenging task in 2019 but by taking the ownership along with the commitment and sincere efforts, the performance of the national flag carrier was improved however, the airline suffered badly due to COVID-19 pandemic.

    He further informed that PIA management was taking every possible step for the betterment of the airline and in this regard, a Voluntary Separation Scheme (VSS) with attractive package was given to some 2000 employees.

    “Segregation of core and non-core groups was likely while the aircrafts acquired on expensive lease were being returned and replaced with better aircrafts at reasonable rates,” he added.

    In response to a suggestion pertaining to commencement of direct flights to northern areas, he said that although PIA was capable of providing direct flight but it was currently not possible due to lack of runways and refueling facilities in many areas of the country.

    “Keeping in view the potential of Gwadar, the number of direct flights has been raised to three from one as this city is going to become a major hub of economic and financial activities.”

    Chairman BMG Zubair Motiwala, in his remarks, appreciated all the efforts being made by CEO PIA to improve the performance of national flag carrier which has to be improved to such an extent that PIA thrives and flies high not only in the skies of Pakistan but also the rest of the world which can become possible only if the government facilitates and provide conducive environment with a focus to restore the lost glories of the national flag carrier.

    Keeping in view the performance of other local airlines, he advised CEO PIA to double the number of domestic flights with same kind of treatment and services which were being provided by PIA’s competitors that would surely yield positive results.

    “We are patriotic Pakistanis and we want to help and support PIA so we would prefer to fly to our destinations via national flag carrier but PIA must improve its services as per international standards,” he added while acknowledging the timely arrival and departure of PIA flights soon after Arshad Malik assumed charge as CEO PIA.

    Chairman BMG further appealed the entire business and industrial community to come forward, support and cooperate with PIA in whatever way they can so that PIA could come out of crises and attains success.

    In his welcome address, President KCCI Shariq Vohra, while appreciating the efforts being made by CEO PIA to pull the national flag carrier out of crises, stressed the need to make collective efforts and aggressively promote the good things happening at PIA while KCCI, with an impressive membership base, can become a good partner of PIA in various fields.

    He was of the opinion that the airlines business has been growing in Pakistan as AirSial, AirBlue and SereneAir have been enjoying thriving businesses with aircrafts flying at full capacity therefore, PIA must also focus on improving the market share by offering its service at competitive rates through cost reduction. “In this regard, the domestic industry has to be integrated with PIA which would certainly reduce cost and save valuable foreign exchange,” he added.