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Tag: KTBA

  • Tax incentives proposed for making new investments

    Tax incentives proposed for making new investments

    KARACHI: Karachi Tax Bar Association (KTBA) has suggested tax authorities to allow tax incentives for new investments in order to promote industrialization in the country.

    The KTBA in its proposals for budget 2022/2023 suggested the Federal Board of Revenue (FBR) to allow tax credit for making new investments by amending sections 65B, 65D and 65E of the Income tax Ordinance, 2001.

    READ MORE: Tax credit extension for employment generation

    The tax bar said sections 65B, 65D and 65E are related to tax credit for investment, newly established industrial undertaking and industrial undertaking established before July 01, 2011.

    “These are not currently available to the taxpayers for new investments,” it said. Therefor it is not encouraging new investment.

    READ MORE: Reintroduction of tax credit on registered sales proposed

    “Tax credits may be provided for making investment in fresh/ existing industrial undertakings, such as tax credit under 65B of the Ordinance which may be restored. Simultaneously, time limit U/s.s 65D and 65E may be further extended up to June 30, 2025,” the tax bar said, adding that it will promote industrialization and new investment in the country.

    READ MORE: Amendment sought in incentive to Greenfield industry

    Besides, the KTBA also sought extension of tax credit on employment generation under section 64B of the Income Tax Ordinance, 2001. The tax bar said a manufacturing entity was allowed a tax credit of 2 per cent subject to maximum tax credit of 10 per cent on employing every 50 employees registered with Employees Old-Age Benefit Institution (EOBI) and Sind Employees Social Security Institution (SESSI). This credit is restricted for the companies formed up to tax year 2019. The tax bar due restriction, effort to generate documented employment would go in vein.

    READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

    The KTBA proposed that the tax credit for employment generation by manufacturers under section 64B of the Ordinance should be extended up to Tax Year 2025 at least. “It is an excellent provision for promoting employment generation along with documentation of the same,” the tax bar added.

  • Tax credit extension for employment generation

    Tax credit extension for employment generation

    KARACHI: The Federal Board of Revenue (FBR) has been suggested to expand the tax credit on employment generation in order to create opportunities of employment.

    Karachi Tax Bar Association (KTBA) in its proposals for budget 2022/2023 submitted to the FBR sought extension of tax credit on employment generation under section 64B of the Income Tax Ordinance, 2001.

    READ MORE: Reintroduction of tax credit on registered sales proposed

    The tax bar said a manufacturing entity was allowed a tax credit of 2 per cent subject to maximum tax credit of 10 per cent on employing every 50 employees registered with Employees Old-Age Benefit Institution (EOBI) and Sind Employees Social Security Institution (SESSI).

    READ MORE: Amendment sought in incentive to Greenfield industry

    This credit is restricted for the companies formed up to tax year 2019. The tax bar due restriction, effort to generate documented employment would go in vein.

    The KTBA proposed that the tax credit for employment generation by manufacturers under section 64B of the Ordinance should be extended up to Tax Year 2025 at least.

    READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

    “It is an excellent provision for promoting employment generation along with documentation of the same,” the tax bar added.

    The KTBA also proposed the tax credit on 90 per cent sales should be also extended to persons making 90 per cent of purchases from persons registered under the Sales Tax Act, 1990 as well. The tax credit should also cover entities providing services and duly registered with the provincial sales tax authorities.

    It will provide the much-desired stimulus to the documentation of the economy, the KTBA added.

    READ MORE: FBR invites income tax proposals for budget 2022/2023

  • Reintroduction of tax credit on registered sales proposed

    Reintroduction of tax credit on registered sales proposed

    KARACHI: Karachi Tax Bar Association (KTBA) has suggested the tax authorities to reintroduce tax credit on registered sales in order to broaden the tax base.

    The KTBA in its proposals for budget 2023/2023 urged the Federal Board of Revenue (FBR) to reintroduce the tax credit on registered sales by making amendment in Section 65A of the Income Tax Ordinance, 2001.

    READ MORE: Amendment sought in incentive to Greenfield industry

    The tax bar said to provide incentive for documentation of economy and increase of the tax base a tax credit of 2.5 per cent of tax liability was offered to manufacturers for Tax year 2009 who were making 90 per cent of their sales to persons registered under the Sales Tax Law. The tax credit was increased to 3 per cent by Finance Act, 2016. However, this Tax credit was deleted by Finance Act, 2017.

    READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

    Due to deletion from the tax law, years of efforts to document the economy has been pushed backwards and that too without any warning and rationale.

    Therefore, it is proposed the tax credit on 90 per cent sales should be also extended to persons making 90 per cent of purchases from persons registered under the Sales Tax Act, 1990 as well.

    READ MORE: FBR invites income tax proposals for budget 2022/2023

    The tax credit should also cover entities providing services and duly registered with the provincial sales tax authorities.

    It will provide the much-desired stimulus to the documentation of the economy, the KTBA added.

    READ MORE: Budget 2022/2023 to be presented in first week of June

  • Amendment sought in incentive to Greenfield industry

    Amendment sought in incentive to Greenfield industry

    KARACHI: The Federal Board of Revenue (FBR) has been urged to amend provisions related to incentive to Greenfield industrial undertaking.

    According to proposals for budget 2022/2023 presented by Karachi Tax Bar Association (KTBA), incentive had been defined under Section 2(27A) of Income Tax Ordinance, 2001 related to Greenfield industrial undertaking.

    READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

    The definition of Greenfield was introduced by Finance Act, 2020 through introduction of section 2(27A). One of the conditions to qualify as a Greenfield Industrial undertaking is that it is using any process or technology that has not earlier been used in Pakistan and subjecting this with requirement to get approval from Pakistan Engineering Board.

    READ MORE: FBR invites income tax proposals for budget 2022/2023

    The tax bar said the incentive is though enshrined in the books yet it is not practically availed due to onerous requirement relating to novel technology.

    The KTBA proposed to delete the condition relating to use of any process and technology not earlier used in Pakistan under this definition. “This condition is impracticable in an economy like Pakistan which in still in process of adopting new technology and has no research and development of its own to bring new technical expertise.”

    READ MORE: Budget 2022/2023 to be presented in first week of June

    Abolishing this requirement would create opportunities for local businessmen to acquire technology from developed world and lay foundation for industry and manufacturing.

    This can also result in import substitution which is much needed for our country, the tax bar suggested.

    READ MORE: MoC invites tariff proposals for budget 2022/2023

  • Pakistan needs to introduce laws to tax crypto income

    Pakistan needs to introduce laws to tax crypto income

    KARACHI: Pakistan needs to introduce laws to tax income from gains on cryptocurrency trading, Karachi Tax Bar Association (KTBA) said in its annual report on Tuesday.

    “ … trading of real-estate in Pakistan is grossly under-taxed while inheritance, gift and crypto tax is yet to be explored over here,” the tax bar said in its annual report for the year 2021.

    READ MORE: KTBA elects Rehan Jafri as President

    According to the general secretary’s statement the year 2021 had been exceptional where service of Artificial Intelligence in the tax matters was given legal sanctity under section 175A and 175B of Income Tax Ordinance, 2001 and NADRA is mandated to compute ‘indicative income’ to identify tax evasions.

    Similar provision has also been introduced in Sales Tax Act, 1990 under Section 56A and 56AB.

    READ MORE: KTBA identifies anomaly in SRB’s appellate system

    On global score OECD was able to bring 136 countries to a minimum tax rate of 15 per cent w.e.f. year 2023 with use of digital payment for Multinational Entities (MNEs) to offset the abuse of transfer pricing/profit shifting.

    ”Pakistan needs to timely synchronize its banking and tax infrastructure to cater these challenges,” according to the report.

    READ MORE: KTBA highlights anomalies in single sales tax return

    It said that year 2021 had been an incredible year. By working with Federal Board of Revenue (FBR), Sindh Revenue Board (SRB) and other tax/regulatory authorities across the country, KTBA was able to extend its legacy of working towards the strengthening of rule of law in tax and corporate regimes.

    READ MORE: KTBA passes resolution against FTO Asif Jah

    “Be it overstepping by the field formation in the domain of Section 11 of Sales Tax Act, 1990; abuse to amend the assessment under section 122 of Income Tax Ordinance, 2001, transgression of constitutional provisions by SRB or uninspiring assertions from Federal Tax Ombudsman (FTO), KTBA’s intensified actions had helped in easing the situations for this fraternity.”

  • KTBA elects Rehan Jafri as President

    KTBA elects Rehan Jafri as President

    In a recently held Annual General Meeting, the Karachi Tax Bar Association (KTBA) announced the results of its elections, with Syed Rehan Hasan Jafri being re-elected as the President for the year 2022.

    (more…)
  • KTBA identifies anomaly in SRB’s appellate system

    KTBA identifies anomaly in SRB’s appellate system

    Karachi Tax Bar Association (KTBA) has identified a sheer violation of the constitution by the Sindh Revenue Board (SRB) regarding appointments in appellate system.

    KTBA President Muhammad Zeeshan Merchant in a letter to SRB Chairman Wasif Ali Memon pointed out the irregularities in appointments of provincial tax officials in first appellate forum available to taxpayers i.e. Appeals.

    READ MORE: KTBA highlights anomalies in single sales tax return

    Merchant referred to the Constitution of Islamic Republic of Pakistan which is coined on the trichotomy of power.

    The Article 175 of the Constitution envisages separation of powers between legislature, executive and judiciary ostensibly to prevent the concentration of power and to check transgression.

    The Supreme Court of Pakistan in the case of Government of Baluchistan Vs. Azizullah Memon reported as PLD 1993 SC 31 has seconded the above analogy.

    READ MORE: KTBA passes resolution against FTO Asif Jah

    With the given methodology, it needs to be appreciated that the Notification No. SRB 3-4/34/2021 dated December 20, 2021 issued by the Member (Operations) Sindh Revenue Board (“SRB”), infringes upon the structure of trichotomy and separation of power in so far as following situations are concerned: 

    Zamir A. Khalid, presently posted as the Commissioner (Legal) is also given the additional charge of the Commissioner (Appeals – I)

    Muhammad Iqbal Lakho, presently posted as Commissioner-III is also given the additional charge of the Commissioner (Appeals – II).

    READ MORE: KTBA highlights issues in implementing digital payments

    The KTBA expressed the surprise to see such a belligerent offensive on the constitutional methodology by a distinguished institution like SRB.

    “We believe this prima facie is a travesty of justice as no one can be judge of his own cause. Please subscribe that this is further likely to shake the confidence of litigants (taxpayers) on the SRB as an independent appellate forum with the dedicated Commissioner (Appeals) is the only solution.”

    READ MORE: KTBA submits recommendations for e-filing of appeals

  • KTBA highlights anomalies in single sales tax return

    KTBA highlights anomalies in single sales tax return

    KARACHI: Karachi Tax Bar Association (KTBA) has highlighted anomalies in single sales tax return form, which was to be filed for the month of December 2021 in January 2022.

    “The sales tax return form has been uploaded on the IRIS portal pre-maturely without removing bugs and without proper testing,” the KTBA said in a letter sent to the chairman of Federal Board of Revenue (FBR) on Monday.

    READ MORE: FBR extends date for filing sales tax return

    Such exercises do not only agitate the taxpayers but they also damage the image of the FBR, it added.

    KTBA president Zeeshan Merchant in the letter to the FBR chairman, hoped that the tax authorities would resolve the issues at the earliest and in the meantime would allow reasonable time to the taxpayers to file sales tax return harmoniously.

    He suggested the FBR to allow filing of sales tax return on e-FBR until the issues are resolved, synchronized and anomalies are effectively removed.

    READ MORE: FBR launches sales tax return filing through single portal

    As part of automation in tax services vis-à-vis to ensure facilitation /ease of doing business to the taxpayers, the FBR launched single sales tax return for goods and services on IRIS Portal through Office Memo dated December 24, 2021 and has made it operational from the Tax Period December 2021 and onwards.

    The tax bar while appreciating the efforts of the FBR stated that it is equally important to follow the legal norms and comprehend and resolve the practical intricacies in the episode passionately.

    READ MORE: KTBA passes resolution against FTO Asif Jah

    About the legality of the filing sales tax return, Merchant noted that the procedure to prescribe and file monthly Sales Tax Return under the Sales Tax Act, 1990 (Act), are sourced via Rule 14 and SRO 555(I)/2006 dated June 05, 2006 which has been amended from time to time; where a monthly Sales Tax Return (for goods) under Form STR-7 is prescribed and is intact as of today. Seemingly, the Single Sales Tax Return (for goods and services) as launched on the strength of Office Memo dated December 24, 2021 without amending SRO dated June 05, 2006, “we believe, is in direct conflict with Rule 14 and we, therefore, expect that the FBR will cater to this aspect religiously at the earliest.”

    Besides legal issues, the KTBA highlighted a number of anomalies/glitches the in Single Sales Tax Return uploaded on IRIS Portal, which the tax bar said are acute and otherwise are seen as impediments in filing the correct return.

    READ MORE: KTBA submits recommendations for e-filing of appeals

  • KTBA passes resolution against FTO Asif Jah

    KTBA passes resolution against FTO Asif Jah

    KARACHI: The Karachi Tax Bar Association (KTBA) on Tuesday passed a resolution against the statement of Federal Tax Ombudsman (FTO) Dr. Asif Mahmood Jah.

    Following is the text of the resolution:

    Karachi Tax Bar Association (KTBA) expresses its deep disapproval and condemnation for recent jibes by the Federal Tax Ombudsman Pakistan (FTO), Dr. Asif Mahmood Jah. The statement made by the FTO lately televised on electronic media / uploaded on social media is offensive towards the taxpayers and manifests his nepotism and biased approach in the discharge of his official duties.  The arbitrary and belligerent statement by the FTO is not only contrary to his oath prescribed in Schedule via Section 3(2) of Federal Tax Ombudsman Ordinance, 2000 read with Section 8 of Federal Ombudsmen Institutional Reforms Act, 2013 but also makes him guilty of misconduct that renders him incapable of holding public office anymore.

    The entire tax fraternity is in a fix over the rude and offensive remarks of Dr. Asif Mahmood Jah and demands his immediate resignation from the office of FTO.  Nonetheless, by way of this resolution, we ask the Hon’ble President of Pakistan to remove him from his office in the exercise of his powers vested U/s. 6(2) of FTO Ordinance, 2000 else a reference against him may be sent to Supreme Judicial Council under the recourse of Section 5 of FTO Institutional Reforms Act, 2013 immediately.

    We believe the statement has eroded the already depleting confidence of the taxpayers and the tax consultants in the office of Federal Tax Ombudsman which had bluntly been submissive towards the Department and have shied away for not (i) allowing a stay of recovery/injunctions to the complainants: Section 10 and 11; (ii) avoiding defiance proceeding against tax collectors: Section 12; and (iii) punish tax collectors for contempt: Section 16 and 12 ibid for obvious reasons.

    On a final note, the KTBA urges the Federal Law Ministry that rules may be prescribed to desist induction of the retired FBR officials in the official of Federal Tax Ombudsman for the sake of transparency and propriety.

    FTO directs setting up quality Customs labs
  • KTBA submits recommendations for e-filing of appeals

    KTBA submits recommendations for e-filing of appeals

    KARACHI: Karachi Tax Bar Association (KTBA) has submitted suggestions to the Federal Board of Revenue (FBR) for the implementation of electronic filing of appeals in sales tax and federal excise.

    The tax bar sent a set of recommendations to the FBR on Tuesday for e-filing of appeals in sales tax and federal excise regimes.

    The KTBA said that a distinct numerical number should be allotted to each appeal and similarly acknowledgment for each appeal should be served to the appellant from the concerned Commissioner Appeals.

    A digital or web based form has been proposed to be prescribed that essentially contains basic information about the case, including appellant’s name and its number, tax periods, order jurisdiction/section, order date and tax demanded etc. This feature though omitted from income tax regime with introduction of e-filing of appeals, has been suggested to be reintroduced in like manner.

    The KTBA said that currently late e-filing of appeals under the income tax regime is conditional to acceptance of application for condonation of time by the concerned commissioner appeals. The tax bar suggested that no such condition should be adopted in the sales tax e-appeals and the same should also be done away with from e-appeals under the income tax regime.

    The rules for fixation and disposal of stay application should have definite deadlines for the concerned commissioner appeals to follow mandatorily with consequences. “Needless to add that the timelines prescribed under Rule 76G of the Income Tax Rules 2002 are not practiced in letter and spirit.”

    The tax bar said that all notices and orders in appeals proceedings shall effectively be served via primary modes as provided under Section 56(1)(a), 56(1)(b) of the Sales Tax Act, 1990 and in case this being not possible only then option of service of notices and orders via secondary modes as provided under Section 56(1)(c) and (d) of the Act shall be exploited. “The date of service of notice or order shall essentially be reckoned in like manner.”

    The KTBA said that all notices and orders including stay orders issued by the concerned commissioner appeals should seamlessly be served to the concerned field formations so that the IRIS portal is updated bilaterally in real-time.

    The tax bar further proposed that the portal should have dedicated link to upload: written arguments; and miscellaneous applications for multiple reasons etc.

    The FBR has been suggested that the draft e-appeal procedure should be shared with the KTBA prior to launching in order to undertake enhanced due diligence.

    Further, before adoption of the new system, the manual filing of appeal as in vogue currently should be run concurrently for some time.

    KTBA highlights issues in implementing digital payments