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  • SBP hailed for allowing opening of banks during Eid Holidays

    SBP hailed for allowing opening of banks during Eid Holidays

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Friday hailed the State Bank of Pakistan (SBP) for allowing banks to open their branches during Eid holidays to facilitate general public.

    Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI) Shariq Vohra appreciated the central bank for paying attention to KCCI’s legitimate demand and accordingly deciding to keep those authorized branches of banks operational on May 10th and 11th who are dealing in foreign exchange & trade activities.

    “We are very grateful to the government and SBP for keeping the authorized branches operational on first two days of next week to facilitate trade & industry, particularly the exports during the extended holidays before Eid-ul-Fitr,” said Chairman BMG Zubair Motiwala.

    While welcoming Sindh government’s move to keep all businesses operational on Friday and Saturday from 6am till 6pm, Chairman BMG reiterated KCCI’s demand to allow small traders and shopkeepers to keep their businesses operational throughout the remaining few days of Ramazan ul Mubarak while the business hours have to be redefined from 12am till 12pm instead of existing 6am to 6pm. 

    President KCCI Shariq Vohra said that SBP’s move would certainly give some breathing space to the exporters by enabling them to carry out important banking transactions and dispatch shipments either on 10th or 11th May, 2021. Although the Sindh government has issued holidays notification from May 10th to 15th but this needs to be reissued under Factories Act in which holidays should be categorically mentioned from May 12th to 15th which would help in dealing with confusion amongst many circles.

    He also requested the Sindh government to allow shopkeepers to keep their businesses operational during the remaining days of Ramazan and urged the shopkeepers to ensure strict implementation of Standard Operating Procedures (SOPs) at the commercial markets.

  • Karachi Chamber rejects few-day extension for filing sales tax return

    Karachi Chamber rejects few-day extension for filing sales tax return

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday rejected extension of few days for filing sales tax and federal excise returns and making payments.

    KCCI President Shariq Vohra, while referring to FBR’s Letter dated May 6, 2021, stated that the extension in dates of payment and submission of Sales Tax and Federal Excise Return for the Tax Period of April 2021 up to May 18, 2021 and May 21, 2021 respectively were not enough which have to extended to May 30, 2021 to facilitate taxpayers.

    In a letter sent to Chairman FBR Asim Ahmed, President KCCI pointed out that the nominal extension in such dates for filing Sales Tax and FED Return will create difficulties for taxpayers as it takes time to get back to routine after observing extended holidays of Eid-ul-Fitr which will be starting from 9th May 2021 to 16th May 2021.

    Hence, the business & industrial community may not be able to prepare and submit their Sales Tax and Federal Excise Return for the Month of April 2021 within the announced limited extension of just a few days.

    He opined that the overall situation was not favorable for trade and industries as everybody was facing severe liquidity crunch nowadays due to very limited business activities whereas it appears that the government has announced prolonged holidays with an intention to keep the entire population at homes so that the ongoing third spell of COVID-19 pandemic could be controlled.

    Keeping in view the overall situation, President KCCI requested FBR to extend the date of payment and submission of Sales Tax and Federal Excise Return for April 2021 up to May 30, 2021 in the larger interest of FBR and the Business Community while the relevant notification for extension may also be reissued which would be widely welcomed by the entire business and industrial community of the country.

  • Customs needs to improve performance: Karachi Chamber

    Customs needs to improve performance: Karachi Chamber

    KARACHI: The performance of Pakistan Customs is not at par with expectations of trade and industry. This mismatch between expectations and delivery should be resolved effectively, said Shari Vohra, President, Karachi Chamber of Commerce and Industry (KCCI).

    He said while exchanging views with a delegation of Senior Collectors of 31st Mid-Career Management Course from Directorate General of Training & Research (Customs) who were led by Additional Director Junaid Usman Akram during their visit to Karachi Chamber.

    The meeting was also attended by Senior Vice President Saqib Goodluck, Vice President Shamsul Islam Khan and KCCI Managing Committee Members.

    Shariq Vohra was of the opinion that the Customs Department has to improve its efficiency as per international standards and must stay abreast with global changes and technological advancements as staying confined to traditional and obsolete practices for clearance of goods would never yield positive results in terms of expediting procedures for clearance of goods.

    “Although Customs Department is a tax collector but it has to be a facilitator as well,” he added.

    He was of the opinion that free dwell time of five days usually expires because of slow pace of Customs Department that causes severe losses to the business community on account of demurrage and detention charges on a daily basis which not only makes the imported goods uncompetitive in the local markets but also affects the exports.

    “At times, many consignments carrying essential raw material for export-oriented industries are also held up by Customs authorities for long which raises the cost of raw material and eventually increases the cost of exportable goods.

    “This is a very serious issue which requires special attention as it makes many Pakistani products uncompetitive in the international markets,” he explained.

    Additional Director Directorate General of Training & Research Junaid Usman Akram, while appreciating KCCI for regularly holding interactions with Customs Officers of Mid-Career Management Course, stated that it was very important to hold frequent interactions between Customs Officials and the business community as such interactions were a perfect source for having access to first-hand knowledge which helps in better understanding the issues and accordingly devising strategies for creating an enabling business environment.

    He said that the Customs Department, despite limited human resource, was sincerely working to facilitate the business community even in extraordinary situations.

    “Despite the outbreak of COVID-19 pandemic and subsequent lockdown last year when employees of most of the organizations starting working from homes, the Customs Department remained fully operational and not a single day leave was taken by any official that clearly shows the sheer commitment and dedication of the entire department,” he added.

    Speaking on the occasion, Senior Vice President KCCI Saqib Goodluck briefed the delegation about the overall operations of Karachi Chamber and how effectively it has been raising voice for resolving issues being faced by the business and industrial community, besides giving the valuable Budget Proposals which were compiled after consultation with all the stakeholders including all industrial town associations and sector-specific trade bodies.

  • FBR urged to abolish withholding tax, minimum tax for commercial importers

    FBR urged to abolish withholding tax, minimum tax for commercial importers

    KARACHI: Federal Board of Revenue (FBR) has been urged to abolish withholding tax and minimum tax for commercial importers in the upcoming budget 2021/2022.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for the upcoming budget said that commercial Importers of raw material pay withholding tax at 2 percent up to 5.5 percent which can only be possible if the gross profit is 30 percent, while the margin is not more than 2 to 3 percent on raw materials sold without value addition or change in form.

    By amendment to Section 148 of Income Tax Ordinance, 2001 through Finance Bill 2018-19, WHT paid on import of raw materials by commercial importers has been converted to minimum tax and the importers have been taken out of fixed tax regime (FTR).

    The chamber said that the concept of WHT is unique to Pakistan’s Tax regime which in fact is tantamount to putting the burden of tax-collection from undocumented entities on the compliant tax payers and avoiding the responsibility to broaden tax-base.

    After acquiring unprecedented powers to access information under Section 56 A and 56 B in Income Tax Ordinance, 2001, FBR and its subordinate departments must take the responsibility to identify non-compliant and undocumented entities/persons instead of laying the onus on existing taxpayers.

    The chamber proposed that concept of minimum tax and withholding tax may be abolished.

    Tax Payers may be allowed to pay certain Fixed Tax or opt for Audit regime and pay taxes in accordance with actual tax liability on Income.

    Furthermore, all Taxes deducted have to be adjustable against actual tax liability.

    Giving rationale, the chamber said that the commercial importers who are a major source of revenue will be able to resume their business and contribute to revenue as well as promotion of SMEs.

  • Jurisdiction of big taxpayers given to CTO

    Jurisdiction of big taxpayers given to CTO

    KARACHI: Federal Board of Revenue (FBR) has transferred jurisdiction of big volume taxpayers to Corporate Tax Office (CTO) instead of dedicated tax offices for big taxpayers i.e. Large Taxpayers Office (LTO).

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 pointed out that the FBR had created new LTOs which deal with taxpayers having a turnover of Rs.1 billion or more.

    However, FBR has changed the taxpayer’s jurisdictions abruptly without any intimation.

    Jurisdiction of some tax payers has been transferred from LTO to CTO despite having a turnover of Rs.7 to Rs8 billion which has created a great deal of confusion and hardship. Difficulties in transfer of soft data/hard copies of tax records from one jurisdiction to other has created problem in processing of refunds and other issues.

    The chamber urged the FBR to correctly and transparently implement the said policy.

    Transfer of Jurisdiction should be streamlined and made easier with prior intimation and valid reasoning.

    Taxpayer data will be available for longer period to be checked by himself at one place and it will also facilitate taxpayers.

  • Commissioner Appeals should be empowered to grant stay up to 90 days

    Commissioner Appeals should be empowered to grant stay up to 90 days

    KARACHI: Federal Board of Revenue (FBR) has been urged to authorized commissioner appeals to grant stay up to 90 days instead existing 15 days.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 said that currently Commissioner (Appeals) grants stay for 15 days only and after expiry of the stay the taxpayer has to file repeated extensions until the decision of the Appeals. Relevant Sections are: ITO 2001 Section 128 (1A)

    The chamber said that this is a cumbersome process which is quite unnecessary and causes undue hardship.

    The KCCI proposed that amendment should be made to Section 128 (1A) of the ITO 2001, to increase the stay duration to Ninety (90) days instead of 15, and extend order timeline to 180 days instead of the existing 30 days.

    This will eliminate unnecessary documentation and save time of both the taxpayer and the Commissioner (Appeals).

  • KCCI demands restoration of normal business timings

    KCCI demands restoration of normal business timings

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Saturday demanded the government of Sindh to restore business timings for markets during the holy month of Ramazan ul Mubarak as restriction imposed on timings may result in disastrous for traders and shopkeepers.

    Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce and Industry (KCCI) Shariq Vohra, while expressing sheer dismay over Sindh Govt’s decision to allow limited business timings from Sheri to 6:00PM and complete closure of businesses on Saturdays and Sundays, urged to revoke the relevant notification without further loss of time and allow all types of businesses to operate at full capacity throughout Ramazan otherwise the people, instead of dying due to diseases caused by coronavirus, would die themselves because of poverty, unemployment, mental stress, hunger or starvation.

    In a statement issued, Chairman BMG and President KCCI stated that they have been urging the Sindh Government through letters to avoid imposing such unpopular decisions at a very crucial time as this was the peak season and if businesses are disallowed to carry out activities for two consecutive days and compelled to observe limited business timings during the remaining working days, it will prove to be disastrous for them throughout next year.

    “We have sent letters to Chief Minister Sindh, Local Govt. Minister, Chief Secretary and Commissioner Karachi and also dropped messages from time to time but haven’t received any response which is a bit disappointing as we were not expecting this kind of response from Sindh Govt. which has always responded to KCCI’s pleas”, said Zubair Motiwala Chairman BMG, “Closure of businesses for two consecutive days and allowing them to operate with limited timings during the remaining days would result in bankrupting many businesses, trigger massive unemployment and chaos.”

    Referring to large number of complaints being received from the shopkeepers of almost all the commercial markets of Karachi who were constantly seeking KCCI’s assistance, Chairman BMG stressed that the government has to come up with some other feasible solution which could save everyone from the pandemic and also ensure zero damage to the poor shopkeepers and small traders who cannot afford any further shocks. “In this regard, the business and industrial community is ready to fully comply with all the SOPs but closure would bring much more difficulties and miseries than opening and controlling the pandemic through the implementation of SOPs”, he added.

    He further said, “These are challenging times and every member of the civil society is facing problems due to COVID crises. Perhaps, it is time when the government should think about extending monetary help to citizens especially the small shopkeepers who are now in net debt position and even paying rents to owners of their business premises has really become difficult.”

    “It is the finding of our Research Department that many shopkeepers have already gone bankrupt and they are running their businesses in anticipation that this season of Ramazan will pull them out of crises. Hence, it is imperative that government should understand the real situation faced by the trading community”, he added.

    “Yes! it is necessary to implement but these SOPs, as the trading argues, are not seen on roads, mosques, public places and big shopping malls. In such a situation, how Karachiites will be saved from COVID if they are closed for two days”, Zubair Motiwala questioned.

    Chairman BMG, therefore, stressed that the notification must be immediately withdrawn while the administration should be effectively utilized for strict implementation of the Standard Operating Procedures (SOPs). “If the administration was able to strictly get the lockdown enforced last year, then why it is not being used for strict implementation of SOPs”, he asked, adding that the Sindh government will have to alleviate the predicament of businessmen instead of aggravating them.

    President KCCI Shariq Vohra also cautioned that shutting down shops for two days and limited business hours would lead to creating a chaotic situation as the people would find no other option but to come out on streets to protest due to rising unemployment and poverty.

    Keeping in view the overall situation and grievances suffered by the business and industrial community, President KCCI hoped that the Sindh government would look into this serious issue and take steps to save businesses and the economy from further disaster.

    On behalf of the entire business community of Karachi particularly the small traders and shopkeepers, Chairman BMG and President KCCI appealed the government to review the decision to shut down all types of commercial/ business activities for two consecutive days a week and allowing limited business hours till 6:00PM which is tantamount to mass killing of the already perturbed small traders and shopkeepers who are in deep crises and struggling really hard to somehow keep their businesses alive.

  • Taxpayers not to worry on system generated past six years audit notices: CCIR

    Taxpayers not to worry on system generated past six years audit notices: CCIR

    KARACHI: Taxpayers should not worry on audit notices of past six years as most of those were system generated and Federal Board of Revenue (FBR) is trying to resolve the issue, a top FBR officials said on Monday.

    While discussing tax issues at Karachi Chamber of Commerce and Industry (KCCI), Dr. Aftab Imam, Chief Commissioner Inland Revenue (CCIR) of Corporate Tax Office (CTO) Karachi explained the issues pertaining to audit notices.

    He said that FBR was well-aware of this issue and it has been observed that most of them were system generated notices and the business community should not worry as FBR was trying its best to resolve this issue.

    “There is no need to re-submit those documents again at the FBR which have already been submitted for audit and only the missing documents should be provided with a covering letter in which it should be clearly mentioned that the following relevant documents have already been provided while the missing documents are being sent,” he added.

    He also assured to analyze the issue of higher turnover tax on yarn traders as compared to the profit margin and look into the possibility of restoring it back to 0.1 percent from 1.5 percent in the next budget.

    The Chief Commissioner CTO mentioned that FBR was seriously working towards creating ease for the business community as the economy would only flourish when the businesses flourish that would automatically improve the tax revenue for the country. “Hence, we want to facilitate the business community and keeping in view FBR’s approach, most of the issues being faced today would be resolved in the next one-an-a-half year as we are very keen to create a tax-friendly environment”, he added.

    He further sought business community’s assistance in identifying those millions of individuals who have been doing businesses of up to billions of rupees but they remain out of the tax net which was the basic reason for the exorbitant tax rates being suffered by the existing taxpayers. “The unregistered individuals have to be taken to task which would reduce the burden on existing taxpayers through reduction in tax rates”, he added.

    Earlier, President KCCI M. Shariq Vohra, while welcoming Chief Commissioner CTO, appreciated that dedicated efforts and prompt response by Chief Commissioner CTO towards amicably resolving the FBR-related taxation issues being faced by business community. “We hope that the FBR would incorporate maximum number of recommendations given by KCCI in its budget proposals which have been recommended in the larger interest of the country”, he said, adding that it has always been KCCI approach to highlight the general issues which are not faced by a few individuals only but by the majority of stakeholders from a particular sector. “Our proposals for upcoming Budget for FY 2021-22 carry pivotal importance and will have a positive impact on business and investment climate, ease of doing business and overall growth of the economy.”

    He was of the opinion that taxpayers face immense hardships in getting petty issues resolved because of the unnecessary hindrances being creates by FBR officials which not only fetches a bad image for the entire department but also discourages new individuals to come into the tax net which was a very issue that requires immediate attention.

    Shariq Vohra pointed out that many members of the business community have been receiving bulk audit notices nowadays in which huge number of documents for six years old cases of 2014 were being demanded which was not making any sense at all and it appears like an attempt to harass the business community. “The FBR, instead of intensifying the hardships for existing taxpayers, must take practical steps to somehow bring more and more people into the tax net which was in the larger interest of the country as it would not only improve the tax revenue but would also bring down the tax rates that would certainly go in favor of the economy”, he added.

    Former Senior Vice President KCCI Ibrahim Kasumbi, in his remarks, particularly mentioned that the furniture industry comprising workshops, employing artisans and manual labor, has been receiving notices from tax authorities and field officers in many parts of Pakistan and they were being compelled to get registered as Tier 1 retailers which was unjust and not practicable for this trade. Hence, FBR must stop harassing shopkeepers, showroom and workshop owners in the name of registration in Tier-1 and the employment of hundreds of thousands skilled workers artisans and laborers has to be protected while this important industry of traditional hand-crafted furniture has to be preserved.

    He further stated that consumption of black tea in Pakistan was 240,000 tons, but the imports through legal channels was hardly 100,000 tons due to high rates of customs duty, sales tax, regulatory duty (RD) and withholding tax (WHT). The remaining requirement was being fulfilled by smuggling, Afghan Transit Trade, and imports under various exemptions/concessions granted to Provincially Administered Tribal Areas (PATA) and Azad Kashmir. Hence, rates of customs duty, sales tax, RD & WHT have to be rationalized to prevent smuggling and massive leakage of revenue, he added.

  • FBR urged to allow commercial import of used cars to end auto assemblers monopoly

    FBR urged to allow commercial import of used cars to end auto assemblers monopoly

    KARACHI: Federal Board of Revenue (FBR) has been urged to allow commercial import of used and reconditioned cars of models up to five years old to end monopoly of local car assemblers.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 recommended the commercial import of used and reconditioned motor cars up to five years old.

    The chamber said that during the past 40 years, assemblers of automobiles have enjoyed protective duties, exemptions and virtual monopoly in Pakistan’s automobile car market.

    Contrary to initial agreements, the assemblers failed to implement deletion program up to 90 percent. Instead, they are importing CKD while they have created vendors who mostly import auto parts and supply to these assemblers.

    Consequently, the so called vendor industry is only producing low quality and non-mechanical parts which is clearly visible in locally assembled cars.

    So far the assemblers have only drained Pakistan’s foreign exchange reserves to the tune of billions of dollars.

    Quality of automobiles produced by the assemblers is so poor that not a single unit of these cars has ever been exported to any country.

    Despite such poor quality, artificial shortage is created to fetch a premium on the early delivery and allow undocumented investors to exploit genuine buyers.

    The chamber said that import of reconditioned cars more than 3 years old model has been restricted to favor the assemblers and exploit the middle class people of Pakistan who can no more afford to buy even a small 660cc to 1000cc imported or local car.

    Ironically, import of brand new cars of high capacity and premium brands is allowed which only benefits the elite. Middle class consumers have been deprived of their right to purchase reasonably priced used/reconditioned cars which have a better quality and safety standard than the locally assembled new vehicles.

    Clearly there is an element of corruption, connivance and vested interest involved in formulating auto-policies. Unfortunately, the vested interests are also resisting to change the policy to allow import of reconditioned cars by reducing the Tariff rates and also permit import of cars of up to five year old models.

    The chamber further said that enough protection has been given for decades to assemblers.

    The chamber has given a comprehensive tariff plan for import of used and reconditioned cars.

  • FBR urged to provide option for business principal activity in sales tax registration

    FBR urged to provide option for business principal activity in sales tax registration

    The Karachi Chamber of Commerce and Industry (KCCI) has called upon the Federal Board of Revenue (FBR) to address challenges in the business registration process, emphasizing the need for streamlined options in the IRIS registration form.

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