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  • Sindh reduces sales tax on services for IT sector: SRB

    Sindh reduces sales tax on services for IT sector: SRB

    KARACHI: Dr. Wasif Ali Memon, Chairman, Sindh Revenue Board (SRB) has said that as the Sindh Government has drastically reduced Sindh Sales Tax on IT, Software Businesses and Call Centers from 13 percent to just 3 percent, all relevant businesses which moved to other provinces, should come back to Karachi where they will enjoy the lowest sales tax as compared to other provinces.

    “IT related businessmen from Karachi Chamber whose peer businessmen moved to Lahore or any other city, must advise them to get back to Karachi where they will be charged a mere 3 percent ST without input tax whereas large establishments which prefer standard rate with input tax credit, have the option of to opt 13 percent with input tax credit facilities”, he added while exchanging views at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI).

    READ MORE: Miftah assures shopkeepers of removing multiple taxes on electricity bill

    The meeting was also attended by Chairman Businessmen Group Zubair Motiwala (Via Zoom), Vice Chairman BMG Jawed Bilwani, General Secretary BMG AQ Khalil, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Vice President Qazi Zahid Hussain, Former President Younus Bashir, Advisor SRB Mushtaq Kazmi and KCCI Managing Committee Members along with senior SRB officials.

    Dr. Wasif stated that SRB performed exceptionally well during the last fiscal year wherein record-breaking Rs153 billion tax was collected therefore, the government has given an ambitious tax collection target of Rs180 billion for current fiscal year which can only be achieved through the support and cooperation of Karachi’s business community which was highly tax-compliant. “Despite the outbreak of COVID pandemic and extraordinary spells of rainfalls which terribly affected many businesses, the business community of Karachi has been regularly and sincerely paying taxes to SRB which we greatly acknowledge”, he added.

    READ MORE: FTO investigates tax collection through electricity bills

    He said that although Karachi contributes highest taxes to SRB but the activities of SRB were not confined to this city only as SRB’s Regional Offices have also been opened in Hyderabad, Benazirabad, Larkana, Sukkur and Mirpurkhas while an SRB Office in Ghotki will also be inaugurated soon.

    In response to President KCCI’s suggestion, Chairman SRB agreed to form a joint SRB-KCCI Committee along with provision of direct helpline to KCCI members so that all their taxation issues could be promptly resolved.

    Chairman BMG, in his remarks, pointed out that although Karachi contributes 94 percent taxes to SRB but it was really unfortunate that this city was not receiving sufficient development funds according to its matchless contribution which has resulted in miserably bringing down the standards of living and doing business in Karachi. “What we contribute to provincial kitty is always being highlighted and appreciated but what we get in return never comes into limelight which is very disturbing. Neither from federal government nor from provincial government, Karachi receives its due share”, he noted, adding that the injustices with this city must and brought to an end now.

    READ MORE: Withdrawal of sales tax through electricity bills demanded

    He stressed that keeping in view Karachi’s contribution of more than 70 percent to national exchequer and 95 percent to provincial kitty, it was high time that Karachi must receive what it deserves. Due to lack to development funds, Karachi’s infrastructure was in awful state and the same has been witnessed by the entire world during the current Monsoon season. “SRB should also have access to information about the expenditure of revenue so that we could compare revenue generation with expenditure”, he added.

    Earlier, President KCCI Muhammad Idrees, while welcoming Chairman SRB, appreciated SRB’s all-time seriousness towards resolving issues being highlighted by KCCI which were promptly being responded and amicably resolved by SRB officials. “However, there are several pending taxation issues related to indenting businesses, travel agents and other businesses along with anomalies in SRB laws which also need to be extensively discussed and resolved in light of ground realities.”

    To efficiently deal with all the SRB related taxation issues and revision in relevant laws, it was very crucial to form a joint committee between KCCI and SRB so these could be discussed and resolved in such a manner that the measures agreed upon result in bringing down the tax rates which would not bring down but in fact increase the provincial revenue as large number of taxpayers will certainly prefer to get registered in Sindh.

    READ MORE: Tax through electricity connections on retailers, service providers

    He said that thanks to KCCI’s rigorous efforts, the federal government has finally realized and agreed to treat the income of indenters as exports proceeds hence, the same must also be announced by SRB which would help minimizing the hardships being faced by indenters who were being charged heavy taxes on marginal commissions.

    He appreciated the Sindh Government for paying attention to KCCI’s demand to reduce Sindh ST on IT, Software Businesses and Call Centers which would encourage a large segment of businesses to register the businesses in Sindh.

  • Miftah assures shopkeepers of removing multiple taxes on electricity bill

    Miftah assures shopkeepers of removing multiple taxes on electricity bill

    KARACHI: Finance Minister Miftah Ismail on Tuesday assured shopkeepers and small retailers of removing all taxes being collected through electricity bills once the fixed tax regime is implemented.

    Responding to demand raised by retailers and shopkeepers, the finance minister promised to remove all the other taxes from the electricity bills once the fixed tax regime is activated to avoid double taxation, as quoted by a press release issued by Karachi Chamber of Commerce and Industry (KCCI).

    “Only GST on electricity consumption will be applicable and at the year end, they will be required to submit a document to intimate the tax authorities about the payment of taxes during the year,” Miftah Ismail was quoted as saying.

    READ MORE: FTO investigates tax collection through electricity bills

    Earlier, the KCCI office bearers highlighted that the government is already charging hefty multiple taxes on electricity bills on commercial units including Electricity Duty, General Sales Tax (GST), Extra GST, Further GST and Income Tax U/S 235 of the Income Tax Ordinance, 2001.

    In response to the protests by small retailers against the fixed retailers’ tax introduced in Finance Act 2022, Finance Minister Miftah Ismail announced to reduce the fixed tax rate from Rs. 6000 per month on non-filers to Rs. 3000 on electricity bills and exempted consumers whose electricity bills was up to 150 units.

    To voice the concerns of the small retailers, Chairman BMG Zubair Motiwala and President KCCI Muhammad Idrees called a meeting of business associations and held talks with Finance Minister Miftah Ismail and Chairman FBR on Zoom.

    READ MORE: Withdrawal of sales tax through electricity bills demanded

    During the session, they expressed concerns over the high rate of taxes being charged through electricity bills. They argued that commercial consumers are already paying multiple taxes in their monthly electricity bills including fuel adjustment surcharge, electricity duty, income tax, general sales tax, extra GST, further GST besides electricity charges, and over and above a new fixed tax has been levied on all commercial consumers which is unsustainable.

    In the meeting held at Karachi Chamber of Commerce and Industry between the Finance team and small traders, the Finance Minister Miftah Ismail promised to waive multiple taxes on electricity bills and also agreed to consider the demands of small traders to increase the threshold.

    After taking the leadership of small shopkeepers on board, Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees urged the government to accept the genuine demands of small businessmen who are already struggling to make both ends meet and increase the suggested threshold of 150 units of electricity consumption from fixed tax regime and remove other taxes from electricity bills.

    READ MORE: Tax through electricity connections on retailers, service providers

    General Secretary BMG & Former President KCCI AQ Khalil stressed on removing other taxes and consider all NTN holders as filers under the fixed tax regime.

    In the Finance Act FY22, the government imposed a fixed tax regime for retailers whereby even the unregistered consumers with zero or minimal units were getting Rs. 6000 monthly tax on electricity bills. After severe hue and cry from small traders against the new fixed tax regime for retailers, the Finance Minister Miftah Ismail announced a revision in the scheme under which up to 150 units of electricity consumption were exempted from the tax and removed the condition to charge double amount of tax from unregistered traders, making it full and final tax and also granted immunity from tax notices, audits and raids by FBR officers.

    To address the concerns, KCCI held an urgent meeting with a delegation of small businessmen receiving fixed tax on electricity bills headed by Abdul Majeed Memon Chairman, Special Committee for Small Trader of KCCI and Talat Mehmood Co Chairman Special Committee for Small Traders accompanied by representatives of several market associations of Karachi.

    READ MORE: FBR explains income tax on export of services

    KCCI had invited all the associations of Karachi and vast majority of them participated in this meeting where they unanimously agreed to the decision of Chairman BMG Zubair Motiwala that the tax may be implemented on the basis of units of consumed where up to 250 units will be exempted from tax and those consuming above 250 units of electricity may be charged fixed tax accordingly. It was also unanimously agreed that all the other taxes including Income Tax, GST Extra GST and Further GST will be replaced with this single fixed tax as full and final tax liability.

    READ MORE: FBR restores 100% depreciation deduction

    The delegation comprised of Muhammad Akram Rana Vice Chairman All Karachi Tajir Ittehad, Asif Gulfam Chairman Alliance of Arambagh Market, Dilshad Bukhari Saddar Jama Mall, Mehboob Azam President All Pakistan Small and Cottage Industry, Mehmood Hamid General Secretary All Pakistan Small Traders and Cottage Industry, Muhammad Feroz President Saddar Cooperative Market, Muhammad Fayyaz Chairman Sind Tajir Ittehad Old City Area, Rafiq Jadoon President All Pakistan Anjumane Tajiran (Bolton Market), Ilyas Memon President Tariq Road Trader Alliance, Nadeem Ahmed Khan President All Karachi Plastic Bags Manufacturing Association, Zulfiqar Shiwani Regional President Sindh Tajir Ittehad, Jamil Parachi Chairman Sindh Tajir Ittehad, Mirza Sadiq Baig Vice President Sindh Tajir Ittehad, Sheikh Muhammad Irshad Jama Alliance,  Chaudry Aamir Ali Khan President Car Association, Abdur Raheem Car Dealers Association, Abdul Qadir Noorani General Secretary Joria Bazar Market, Javed Shams Daniyal President Anjuman Tajiran e Sindh – Karachi Division, Abdul Samad Khan SVP Saddar Alliance of Market Association, Abdullah Batra Chairman Orangi Traders Association, Arif Patel Goldsmith among others. The members of the Managing Committee of KCCI also attended the meeting.

  • Political parties responsible for Pakistan economic crisis: KCCI

    Political parties responsible for Pakistan economic crisis: KCCI

    KARAHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday accused political parties of Pakistan for current economic crisis.

    In a joint statement issued by Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees expressed concerns as they felt that political parties are not understanding the gravity of the situation of the economy and the repercussions on the future of the country.

    READ MORE: Karachi Chamber demands declaring rain emergency

    Chairman BMG Zubair Motiwala warned that many businessmen are thinking of closing down their businesses, if not forever then on a temporary basis and most of them are even looking for the second option of shifting to a worthwhile place to do business.

    He lamented that banks were making humungous amount of money on foreign exchange transactions while State Bank of Pakistan had not been effectively regulating them due to which the difference between the interbank rate and banks’ negotiated price has crossed Pak Rupees10 a dollar and even then banks are not releasing dollars.

    READ MORE: KCCI demands release of stuck up containers

    “The business community faces cost uncertainty on the goods they are importing especially those which are on 90 or 120 days credit and about the fate of the goods they have already sold in the market. L/Cs for even the most essential items which are necessary to keep the wheels of industry running require former approval of SBP which has been very strict with the business community but it is quite relaxed when it comes to controlling the banks,” he added.

    Chairman BMG Zubair Motiwala, Vice Chairmen BMG & Former Presidents KCCI Tahir Khaliq, Haroon Farooki, Anjum Nisar, Vice Chairman BMG & Former Senior Vice President KCCI Jawed Bilwani and General Secretary BMG & Former President AQ Khalil, stressed upon the need to have political stability in the country.

    READ MORE: KCCI demands implementation of Riba free banking

    General Secretary BMG A Q Khalil stated that irrespective of the IMF’s restriction on interventions in Forex market, the political parties can bring some stability in the Pak Rupee by setting aside their political differences and minimize the political instability in the larger national interest. He urged all the political parties to show unity the way they have been showing solidarity in several issues of national security and in case of Kashmir cause.

    President KCCI Muhammad Idrees stated that the utility prices are being enhanced unprecedently where rupee dollar parity has added fuel to fire. “And no one knows how low the rupee would drop while agreement with IMF has added even more uncertainty. Purchasing power of the common man has eroded due to high inflation while many business units complained that local markets are not buying from the production units as the buying power of the masses has eroded and people are concerned over the heightened uncertainty,” he added.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    They appealed to all political parties to sit down across and make an understanding as to how the economy should function and stabilize the Rupee to its real value. This kind of freefall of the local currency is making international buyers confused as to what is the right time to buy for profit. Due to this reason, the orders of autumn and winter, which are usually the sold before or in July are still pending making it difficult for the units to continue their production prior to September. KCCI even offered to sit down with the political parties to at least create a framework so that minimum working conditions are achieved for the businesses to operate smoothly.

  • Karachi Chamber demands declaring rain emergency

    Karachi Chamber demands declaring rain emergency

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the government of declaring an emergency after human and financial losses in the city during torrential rains in past few days.

    READ MORE: KCCI demands release of stuck up containers

    KCCI President Muhammad Idrees in statement urged Prime Minister Shehbaz Sharif to take immediate measures to prevent further human and financial losses in the city as more rains had been predicted.

    Idrees lamented the present situation in Karachi after heavy downpour especially during the past 24 hours. He said the provincial and local authorities had failed to relief and take measures to control the flooding like situation.

    READ MORE: KCCI demands implementation of Riba free banking

    “The city collects about 70 per cent revenue for the national exchequer. But the present situation has created insecurity amongst the people of the metropolis,” he said.

    “The Wall Street of Pakistan i.e. I. I. Chundrigar Road is completely vanished due to flooding. Besides, the old city area were also showing disaster everywhere,” he added.

    The KCCI President urged the Prime Minister to announce compensation to the losses and also grant duty and tax relief for the business community.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    He pointed out that there was no allocation in the budget 2022/2023 for the financial hub. He further pointed out that the previous government had allocated around Rs1.1 trillion for the city but no development project was seen.

    Idrees demanded the federal government to take control of the city and provide maximum relief to avoid further losses in expected rains.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

  • KCCI demands release of stuck up containers

    KCCI demands release of stuck up containers

    Karachi Chamber of Commerce and Industry (KCCI) on Monday demanded the government of releasing containers imported goods that were banned through SRO 598(I)/2022.

    The chamber in a statement strongly denounced the non-clearance of containers at the ports subsequent to the ban imposed on luxury items.

    READ MORE: KCCI demands implementation of Riba free banking

    The ban was imposed on 85 categories of luxury items vide SRO 598 (i)/2022 which was issued on May 19, 2022.

    Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees appealed to Prime Minister of Pakistan Mian Shahbaz Sharif and Minister of Finance Miftah Ismail to issue orders to immediately release the stuck up containers at the port and waive the demurrage charges to compensate for the losses of the importers.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    President KCCI Muhammad Idrees claimed that around 800-900 containers which were already booked before the issuance of SRO 598, got stuck at the ports as customs authorities were not clearing them.

    Importers are facing additional hit of hefty demurrages which is causing severe distress among them.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

    It has also caused shortage of several items in the market which needs to be addressed urgently.

    Chairman BMG Zubair Motiwala and President KCCI Muhammad Idrees urged immediate resolution of this serious issue.

    READ MORE: Govt. halts gas supply to export industry: APTMA

  • KCCI demands implementation of Riba free banking

    KCCI demands implementation of Riba free banking

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Friday demanded the government for early implementation of Riba free banking in Pakistan.

    Chairman Businessmen Group in the KCCI, Zubair Motiwala, and KCCI President, Muhammad Idrees have extended gratitude to Prime Minister Shahbaz Sharif for taking interest in the implementation of the Federal Shariah Court’s decision of introducing Riba Free banking in Pakistan.

    READ MORE: KCCI appeals rescuing small traders in Catch-22 situation

    They have requested the government to introduce interest free banking in Pakistan according to the Islamic Principles and implement the court’s decision in true letter and spirit. 

    The Federal Shariah Court gave a verdict on 28 April 2022 after a lapse of 19 years. In the judgment, it declared that Riba was prohibited according to the injunctions of Islam so it should be eliminated from the country with in a period of five years.

    This statement was issued in response to an appeal filed by the State Bank of Pakistan, and four other banks in the Supreme Court of Pakistan against the Shariah Court’s Judgment. They termed the appeal as move to delay the conversion of conventional banking system to Riba free mode to banking. They also appreciated the assurance given by the PM Shahbaz Sharif to influence the banks to withdraw their appeals from the Supreme Court so that the Shariah Court’s decision could be implemented.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

    Chairman BMG Zubair Motiwala said, “Other Islamic countries like Saudi Arabia, Iran and Malaysia have made significant headway in implementing Islamic mode of financing in their respective countries. Like, Malaysia has an Islamic Financial Services Board which has set Standards, Guiding Principles and Technical Notes for the Islamic financial services industry. I believe that if these countries are able to successfully adopt Islamic financial system, Pakistan can also shift to Islamic Financing system in the decent span of five years”.

    READ MORE: Govt. halts gas supply to export industry: APTMA

    President KCCI Muhammad Idrees urged that all stakeholder groups should be consulted and if there are any genuine issues then these should be resolved on a fast-track basis to pave way for timely implementation of Islamic Financial System in the country.

    READ MORE: SITE industrialists reject increase in power tariff, POL prices

  • PM Shehbaz assures favorable measures on CNIC requirement

    PM Shehbaz assures favorable measures on CNIC requirement

    KARACHI: Prime Minister Shehbaz Sharif has assured business community of taking favorable measures related to CNIC requirement will be taken in the budget 2022-2023.

    A high-level delegation of the Karachi Chamber of Commerce and Industry (KCCI) led by Chairman Businessmen Group (BMG) Zubair Motiwala held meetings with Prime Minister Shehbaz Sharif and Federal Minister for Finance and Revenue Miftah Ismail in Islamabad to discuss the overall economic challenges, budgetary measures for fiscal year 2022-2023, taxation policies and the problems being suffered by the business and industrial community of the country.

    READ MORE: New tax measures likely in budget 2022-2023

    The delegation, which also comprised of Vice Chairman BMG Jawed Bilwani, President KCCI Muhammad Idrees, Former Senior Vice President Saqib Goodluck, Former Vice President Shahid Ismail, President Site Association of Industry Abdul Rasheed, President North Karachi Association of Trade and Industry Faisal Moiz Khan and President Site Superhighway Association of Trade and Industry Aamir Hassan Lari, highlighted the following major points:

    KCCI delegation requested the Prime Minister that 17.5 percent Sales Tax on Solar Panels must be withdrawn at the earliest as committed by the Prime Minister at a meeting held at CM House Sindh during his last visit to Karachi. The Prime Minister and Finance Minister assured that it will be withdrawn next week.

    READ MORE: Pakistan Budget 2022-2023 – estimates

    Matter of Indenting Commission also came under discussion with a humble request by KCCI delegation that indenting commission may please be declared as export proceeds.

    Moreover, it was further brought into the limelight that the local manufacturers have the capacity of producing Fiber Optic Cables therefore, the government must take measures to stop the imports of fiber optic cables so that the local manufacturers could be encouraged to enhance their production capacity which would certainly help in saving substantial foreign reserves being wasted on the imports of fiber optic cables.

    KCCI delegation also advised Prime Minister and Finance Minister to issues directives for withdrawal of Sales Tax imposed on LED bulbs and its parts so that energy conservation could be promoted all over the country which was badly needed as the countrymen were currently going through prolonged load shedding for many hours every day due to severe energy crises.

    READ MORE: Compliance cost much higher for corporatization: PSX

    KCCI delegation also expressed deep concerns over delays in release of Drawback of Local Taxes and Levies (DLTL) claims of the exporters which have remained stuck up since long. In response, the Prime Minister promised to disburse the same in the days to come.

    KCCI delegation also sought Prime Minister’s assistance in dealing with the unjust imposition of 17 percent Sales Tax imposed on cattle feed made from the agricultural waste. As it is purely agricultural waste used as animal feed for livestock farming and milking, hence sales tax imposed must be withdrawn in the Federal Budget 2022-23. Prime Minister and Finance Minister, while agreeing to KCCI’s viewpoint, assured that ST imposed on cattle feed will also be withdrawn.

    KCCI delegation also advocated that the commercial importers of polyester yarn may please be allowed to declare their payment of sales tax and other taxes under Final Tax Regime (FTR) which was also agreed with an assurance that the commercial importers will be treated under FTR.

    READ MORE: FBR suggested reduction in tax rates for equity funds

    IT related issues along with its potential and an ambitious export target of US$15 billion in three years for IT sector given by Prime Minister was also discussed in detail and it was assured that all the issues being faced by businessmen associated with IT sector will be resolved to promote this sector. In addition to resolving issues, the government would create such an environment wherein Pakistani IT companies abroad could be encouraged to comfortably open up their offices in Pakistan. Gas Tariff for the export sector was also discussed in detail.

    READ MORE: PSX proposes tax exemption on property transactions

    KCCI delegation, while thanking the Prime Minister Shehbaz Sharif and Finance Minister Miftah Ismail, for taking keen interest in resolving the issues being suffered by the business community, hoped that the Karachi Chamber’s recommendations which have been submitted in the larger interest of the country, will be taken into consideration and incorporated in the forthcoming budget so that the overall business climate could be improved that would certainly lead to promoting industrialization all over the country and generate employment opportunities.

    KCCI delegation also extended full support and cooperation to the Prime Minister and his teams for all his future endeavors being undertaken to pull the economy out of crises.

  • KCCI appeals rescuing small traders in Catch-22 situation

    KCCI appeals rescuing small traders in Catch-22 situation

    Karachi Chamber of Commerce and Industry (KCCI) on Saturday declared Catch-22 situation and urged the government to rescue small traders from its fallout.

    Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees, while referring to upsurge in petroleum prices by Rs60 within a week along with exorbitant hike of Rs7.91 in electricity base tariff and 44 percent increase in SSGC’s gas tariff by OGRA, stated that a catch-22 situation has been created not only for the industries but also for all segments of society particularly the poor masses and small traders/ shopkeepers who simply cannot bear the burnt and were extremely worried over across-the-board inflation triggered by the rising petroleum prices, gas and electricity tariffs.

    READ MORE: Energy price hike jolts trade, industry: Businessmen Panel

    In a joint statement, Chairman BMG and President KCCI said that it was really unfortunate that the issues being confronted by small traders, who are an integral part of the economy, were not in government’s priority list and it appears that they have been left alone during the ongoing difficult times.

    Zubair Motiwala appealed the government to come forward to rescue the small traders and shopkeepers by devising some kind of an effective mechanism to protect their interest and announce a special relief package for small traders/ shopkeepers which could reduce their cost and ensures that they survive in this era of inflation.

    READ MORE: Govt. halts gas supply to export industry: APTMA

    He said that the inflation has badly gripped the entire society as prices of almost all the household items have skyrocketed making them unaffordable for majority of the public while those people, who were somehow able to afford, have also become very cautious that has brought down the shopkeepers’ sales to somewhere around 20 to 30 percent.

    “In this scenario, how a small trader or a shopkeeper will be able to survive and overcome some inevitable expenditures including gas and electricity bills, shop rent and wages to his workers etc.,” he asked.

    “It is undoubtedly a dire situation not only for the poor segment of society but also for the lower middle class and even the middle-class families who have been silently going through hunger and starvation as they, being white-collar and educated individual, cannot complain or beg for help from anyone,” Chairman BMG said, “Inflation genie has to contained at any cost otherwise, it will kill the common man.”

    READ MORE: SITE industrialists reject increase in power tariff, POL prices

    He further stated that in addition to severe devaluation of rupee against dollar, rising electricity tariff and petroleum prices, it was also a matter of grave concerns that OGRA okayed a whopping increase of 44 percent in gas tariff for SSGC which would prove to be the last straw on camel’s back as it would result in closure of thousands of industrial units, trigger massive unemployment and give a boost to smuggling through misuse of Afghan Transit Trade and other illegal channels. “In this scenario, the economy will stay in hot waters, crises would worsen further and the situation may lead to setting off serious anarchy all over the country”, he cautioned.

    He said that when the exports have picked up pace and recorded an increase of 26 percent while the manufacturing sector has also witnessed an upsurge of 39 percent, the anti-business moves including raising the interest rates, increasing petroleum prices, electricity tariff and now appreciating the gas tariff have been taken which would withhold the progress of Pakistan and shut down many industrial units who would surely face bankruptcy. 

    READ MORE: Yarn merchants for reducing utility prices to save industry

    Muhammad Idrees said the production activities of the manufacturing sector supplying goods at the local markets have also gone down due to rising cost of doing business and the subsequent increase in the cost of finished goods. “Why would a manufacturing unit keep on producing goods at same pace and capacity when the local markets have become almost stagnant”, he said, adding that it was a very alarming situation which would raise the unemployment all over the country as many people would lose jobs due to limited production activities and closure of hundreds of industrial units which cannot bear the all-time high cost of doing business.

    As after increasing the petroleum prices and electricity tariff, the IMF’s demands have mostly been fulfilled hence, President KCCI urged the government to take notice of the situation and take steps for providing relief to the industries, shopkeepers and the poor masses otherwise things are going to get really difficult.

  • Income tax audit should be once in three years

    Income tax audit should be once in three years

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has suggested the authorities to conduct income tax audit once in three years.

    The KCCI in its proposals for budget 2022/2023 submitted to the Federal Board of Revenue (FBR) stated that through Finance Act 2019 powers of Commissioners Inland Revenue and the FBR have been restored to select cases for audit every year which further creates difficulties for registered persons, whereas prior to FY2019-20 audit could be conducted once in 3 years.

    READ MORE: Cut in duty, taxes on tea import suggested to stop smuggling

    The commissioners already have various powers to carry out amendments of the income tax returns filed for any tax year by the taxpayer under Section 122 (5A).

    Therefore, additional audit powers outside the standard audit parameters are often misused by the tax authorities.

    READ MORE: KCCI proposes sales tax exemption to solar panels, inverters

    Multiple and overlapping discretionary powers are precisely the hurdle in broadening of tax base, and corruption. Rather than focusing on broadening the tax base, FBR is coming up with novel ways to perpetuate a regime of extortion and harassment. Consequently the country is going nowhere in expanding the tax base and revenue collection.

    The KCCI proposed that the audits under Section 177 and 214C should be carried out once in every three years as was introduced through Finance Act 2018, through restoration of clause 105 omitted in Finance Act, 2019.

    READ MORE: FBR suggested automatic GD filing extension on system failure

    Despite of this restriction the Commissioner can carry out assessment under section 122(1)/(5) or 122(5A) of the Income Tax Ordinance, 2001 on the definite information or where declaration of tax payer is erroneous and prejudicial to the interest  of revenue.

    Giving rationale to the proposal, the chamber said it would alleviate fears of compliant tax-payers. Further, it will help in removal of harassment and extortion through uncalled for and unnecessary audits.

    READ MORE: KCCI proposes sales tax exemption to e-commerce

  • Cut in duty, taxes on tea import suggested to stop smuggling

    Cut in duty, taxes on tea import suggested to stop smuggling

    KARACHI: The Federal Board of Revenue (FBR) has been suggested a drastic cut in duty and taxes on import of black to stop smuggling and increase revenue.

    The Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2022/2023 submitted to the FBR said that consumption of black tea in Pakistan is 240,000 metric tons, but the imports through legal channels is hardly 100,000 metric tons due to very high rates of customs duty, sales tax, regularity duty and withholding tax.

    READ MORE: KCCI proposes sales tax exemption to solar panels, inverters

    Remaining requirement is fulfilled by smuggling, Afghan Transit Trade (ATT), and imports under various exemptions/concessions granted to PATA and Azad Kashmir which conduct 90 per cent of official imports and sold all over Pakistan in tariff areas.

    The KCCI said that legitimate importers have been driven out of the market due to distortions in tax and duty regime, while also the government is losing a substantial amount of revenues.

    READ MORE: FBR suggested automatic GD filing extension on system failure

    The black tea imported in bulk and wholesale packing is treated as finished product in 12th Schedule (Table 3) whereas it should be treated as raw material because black tea goes through a process of blending and packaging while also the taxes are charged on maximum retail price.

    The KCCI said that black tea is an essential food item used in every household and common man. Such high tariffs while exemptions to select areas are only supporting misuse of concessions and smuggling. The tariff structure may therefore be rationalized as proposed while exemptions to PATA and Azad Kashmir be withdrawn as these are sources of revenue leakages:

    READ MORE: KCCI proposes sales tax exemption to e-commerce

    The customs duty should be reduced to 5 per cent from 11 per cent.

    The regulatory duty should be brought down to zero per cent from 2 per cent.

    The rate of sales tax should be reduced to …. From 17 per cent.

    READ MORE: Withholding tax on raw material import should be adjustable

    Whereas, the rate of withholding tax should be reduced to 2 per cent from existing 5.5 per cent.

    The chamber said that the proposal would prevent misused of exemptions and significantly increase revenue by Rs70 to Rs.80 billion.

    Significant relief to entire population in an essential food item which is most expensive in Pakistan.