KARACHI: The condition of providing CNIC details is not applicable on purchases up to Rs50,000 by a person, said Zeeshan Merchant, former vice president of Karachi Tax Bar Association (KTBA).
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FBR urged to allow filing amnesty scheme declarations
KARACHI: Federal Board of Revenue (FBR) has been urged to allow those persons to file their declarations who have paid duty and taxes under amnesty scheme 2019 by due date.
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KTBA urges prime minister for extending amnesty scheme for one month
KARACHI: Tax practitioners of Karachi Tax Bar Association (KTBA) have urged Prime Minister of Pakistan Imran Khan to extend the last date for availing tax amnesty scheme to July 31, 2019 from existing June 30, 2019.
In a letter sent to Prime Minister Imran Khan on Saturday, the KTBA requested for extension of due date for filing of Assets Declaration Scheme 2019.
It said that the last date to avail the Assets Declaration Scheme 2019 (Amnesty Scheme 2019) is expiring in the next two days while there still lies innumerable cases of taxpayers who are yet to file their Amnesties but for the reason of paucity of time and extremely slow speed of the IRIS Software of the FBR.
The KTBA said that the Foreign Amnesty Scheme was launched by the government through an Ordinance on May 14, 2019 whereby a 47 days window was available to declare foreign and local assets and expenditure.
Though the Ordinance was promulgated on May 14, 2019 but the filing under the Scheme accelerated only after the launch of the online Citizen Profile on NADRA and Tax-Profile on FBR on its “Malumaat” application which took the public in general by surprise and after which considerable discomfort and anxiety echoed in the ranks, which resulted in the radical change in the perception of seriousness of the Amnesty drive by the FBR as was factually reflected by it.
However, since all these announcements were made only a few days before the June 30 which left very short time to fill in and to file the Amnesty even if someone genuinely wants to.
Had these announcement been made earlier, the desired level of momentum which is visible today could be seen earlier as well.
It is germane to mention here that the decision to upload the personal data of around 53 million citizens online was also taken without following a stakeholder process and is quite concerning among the public that also created panic on the way to avail the benefits of the scheme.
Further, FBR and the SBP’s delayed response on the clarifications for implementation of scheme like foreign currency remittance/accounts etc, is also delaying the process of declaration filing.
In view of the above it is requested to kindly give directions to the ministry to extend the date of filing of Amnesties till July 31, 2019.
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KTBA discusses impact of SRO 1125 withdrawal
KARACHI: The tax practitioners have discussed impact of abolishing SRO 1125(I)/2011 under which sales tax zero rating was available for export sector.
These were discussed at post budget seminar organized by Karachi Tax Bar Association (KTBA) in collaboration with Pakistan Tax Bar Association (PTBA) on Thursday.
Adnan Mufti at Shekha & Mufti Chartered Accountants explained changes in indirect taxes in his presentation.
He said zero rated and reduced rates tax regime for 5 export oriented sectors i.e. textile, leather, carpets, sports and surgical goods was introduced from 1st January 2012 vide SRO 1125. Thereafter 19 amendments were made from time to time in SRO 1125.
He highlighted following impacts would emerge after abolishment of SRO 1125:
a) Goods which were notified under SRO 1125 now would restored at standard rate of sales tax i.e. 17%.
b) Supplies of finished articles of textile, textile made ups, leather and artificial leather made by retailers would be subject to sales tax @ 15% subject to integration with FBR online system where data is transmitted to the FBR’s computerized system in real time. Mode and manner to be prescribed by FBR.
c) Zero rating on import of plant & machinery (not manufactured locally) by textile industry would be abolished and will be subject to sales tax @ 10%;
d) Ginned cotton, one of the major raw material of textile sector, will become subject to sales tax @ 10% under Eight Schedule. It was previously zero rated under SRO 1125 for textile sectors and exempted under Sixth Schedule for others;
e) Zero rating facility on “raw cotton” stands transposed with tax exemption under Sixth Schedule;
f) Zero rating facility on furnace oil, diesel oil, coal, electricity and gas will be withdrawn.
He explained in details about the overall changes brought in the indirect measures through Finance Bill 2019.
The changes in tax structure will have inflationary impact on sugar, milk, soft drinks, garments, shoes, cooking oil, cement, etc. costlier than before. Customs Duty on more than 1,650 raw materials and industrial inputs reduced – paper industry to enjoy more benefits.
He said that restoration of trust was much needed for a tax revenue target of Rs5555 billion.
Practical measures for boosting exports, employment, protection of local industry missing. Imports of luxury items like chocolate, eatable, shaving razors, heavy cars, etc. should have been banned. Revenue hit for the initial short run should be absorbed for a long term sustainability.
Machinery parts and accessories used in the textile sector will be free from CD; it’s a mismatch since zero rating for textiles has been abolished in sales tax.
FED imposed on cars; mismatch vis.a.vis sugar, milk, cooking oil, etc.
CD waived on 18 medicinal inputs as well as on medicines for certain rare diseases. We should expect cheaper medicines in the next fiscal year.
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KTBA discusses tax proposals at pre-budget seminar
KARACHI: Karachi Tax Bar Association (KTBA) on Monday organized pre-budget seminar to recommend tax proposals for year 2019/2020.
Ali A Rahim, Director, Bakertilly Chartered Accountants presented income tax recommendations for the upcoming budget.
Rahim presented following recommendations:
Depreciation on Musharika Assets Under Section 22(15)C
Proposal: The depreciation on Musharika assets to be allowed retrospectively since inception.
Set off of Losses against income from property Under Section 56
Proposal: The position prior to amendment made through Finance Act, 2013 should be restored to allow set off against property income as well.
Restriction on setting off of depreciation losses Under Section 57
Proposal: The amendment brought through Finance Bill 2018 relating to unabsorbed depreciation and amortization is proposed to be deleted.
Workers Welfare Fund and Workers Profit Participation Fund Under Section 60A & 60B
In both the Law it is categorically stated that this shall be allowed if the payment is made to the Federal Government. Since the enactment of the 18th Amendment in 2010, the same is collected by the Provincial Government.
Since, there is no mention of the payment to the Provincial authorities the same is being disallowed by the Income Tax Authorities.
Proposal: It is therefore proposed that the payment made under the Provincial Laws may be incorporated in Section 60A and 60B.
Tax Credit to persons registered under Sales Tax Act, 1990 Under Section 65A
Tax credit of 2½ was available from tax year 2009 to Manufacturers registered under the Sales Tax, if 90% of the sales were to those persons registered in Sales Tax. In 2016 this was increased to 3%, to encourage persons towards documentation.
However to reasons best known to the Government, this was deducted vide Finance Act, 2017
Proposal: It is proposed that this section should be reincorporated in the tax Law.
Non Recognition Rules Under Section 79(2)
This section excludes any gain or loss arising from disposal of assets if certain conditions are fulfilled including gift of an assets to a relative.
However, if the recipient is a non-resident at the time of the acquisition then the said person is not entitle to an exemption which is very unfair as now every family has persons living abroad.
Proposal: It is therefore proposed that section 79(2) should be deleted.
Adjustment of Minimum Tax payment in case of Tax Loss Under Section 113(2)(c)
The following Explanation is proposed to be inserted:
“Explanation –For the removal of doubt, it is declared that the expression “the excess amount of tax” apply to all cases where no tax is payable for any reason whatsoever including any loss of income, profits or gains or set-off of losses or unabsorbed depreciation of earlier years, exemption from tax and allowances and deductions admissible under any provision of this Ordinance.
Appointment of the Appellate Tribunal Under Section 130
Accountant members are posted in the Tribunal from the tax department and can be reposted back in the tax department and hence are very conservative when imparting Justice.
Proposal: It is proposed that once an officer is posted to the Tribunal, he should then retire from there and should in no way go back to the tax department. This will go a long way in imparting Justice.
Stay order by Tribunal should be valid till Disposal of its Appeal Under Section 131
Proposal: It is proposed that the said amendment be deleted and the earlier position of law should be restored in the interest of natural justice so as to provide relief to the taxpayer.
Tax deduction on Import of Plant and Machinery by Service Sector Under Section 148(7)
It is proposed to insert the following in the list of exceptions provided under sub-section (7) of section 148:
Equipment imported by service sector companies for their own use.
Exemption from Income Tax on Imports to NPOs Under Section 148 SRO 947 of 2008
It is proposed that such exemption is also extended at least to such non-profit organizations whose income is exempt in terms of Clause (66) of Part I of the Second Schedule.
Excessive Tax Deduction from Salary Under Section 149
It is proposed to:
-replace section 64 with 62A of the Ordinance to allow tax credit on House Loan.
-insertion of new clause to allow tax adjustment for deductible allowances on account of Zakat, Allowance for payment of Profit House Loan and Education expenses under Sections 60, 60C and 60D, respectively.
-tax withheld and paid under any other Section of the Ordinance.
Withholding on Local Royalty Under Section 153
It is proposed that the separate flat rate of tax withholding is specified if royalty is paid to residents which should fall under Final Tax Regime.
Deduction of tax Under Section 153
No withholding in the case of registered persons [Filers]
It is proposed to amend the Section 153 that the withholding agents should only deduct/collect tax in the cases of Non-Filers or Unregistered Services providers, Suppliers & Contractors.
Automatic credit of tax deducted Under Section 153
It is proposed that when the tax is deducted, credit of the same should automatically be given to the withholdee.
Withholding on Rent in case of Multiple Years Under Section 155
It is proposed to include an explanation under Section 155 that tax withholding is required on the basis of annual rent paid for a tax year at the applicable rates to each year.
Time limit for Monitoring of Withholding of Income Tax Under Section 161 & 162
It is proposed to insert the following provisions under Section 161/162:
Proceedings for monitoring of withholding taxes should not be initiated for a tax year after expiry of 6 tax years
Allow ability of Tax Payment as a Credit after Monitoring of Withholding of Taxes. Under Section 161 (1A)
It is proposed that the withholder should be allowed to deposit the tax in the
name of the parties whose withholding fell short.
Bi-Annual Statements to be replaced with Monthly Withholding Statement Under Section 165
It is proposed that the filing of biannual is replaced with monthly filing of withholding statement.
Offences and Penalties Under Section 182(1)
An explain was incorporated explaining “Tax Payable” and it stipulated to mean tax chargeable on the basis of the taxable income.
The purpose of the penalty is to educate the taxpayers and the same should not be for the purpose of tax generation. In addition taxes deducted/paid, other then payment along with the return, is already with the Government, hence there is no loss of revenue.
It is therefore proposed that penalty should be on the balance of tax payable along with the return and not the total tax liability.
Returns Not filed within due date Under Section 182A
A person filing the returns late by even 1 day will be treated as a non filers for the full year.
There is already a provision in the Law under section 182 for imposition of penalty for late filers.
Proposal: Section 182A should be withdrawn and the person filing the return late should also be considered as a filer, after payment of the penalty under section 182.
Duplication of Advance tax on payment of foreign Education made through Credit Card or Debit Card or Prepaid Card Under Sections 236R & 236Y
The provisions should be withdrawn in its entirety for filers.
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KTBA, RTOs discuss budget proposals
KARACHI: The office bearers of Karachi Tax Bar Association (KTBA) discussed budget proposals 2019/2020 with Chief Commissioners of Inland Revenue on Wednesday.
The chief commissioners Inland Revenue from Regional Tax Offices (RTOs) Karachi including Shafqat Kehar, Badaruddin Ahmed Qureshi and Muhammad Ali Khan.
The chief commissioners visited the KTBA and met newly elected office bearers.
Both the sides discussed budgetary proposals and other matters of common interest.
KTBA president Rehan Siddiqi apprised the senior tax officials about the problems faced by members of the bar.
He suggested measures to improve understanding between tax departments and tax practitioners.
The chief commissioners assured full support to remove trust gap between tax collector and taxpayers and underscored the need to broaden the tax base.
The chief commissioners sought bar’s help for the purpose which was assured by the KTBA president as such both sides further agreed to keep in touch to resolve issues.
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KTBA asks FBR to clarify filing withholding statements after amendment
KARACHI: Karachi Tax Bar Association (KTBA) has asked Federal Board of Revenue (FBR) to issue clarification regarding filing withholding tax statement following amendment made through Finance Supplementary (Second Amendment) Act, 2019.
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KTBA elects Rehan Siddiqui as president for 2019-2020
KARACHI: Karachi Tax Bar Association (KTBA) in the 62nd Annual General Meeting held on Thursday announced Muhammad Rehan Siddiqui as president of the association of the term 2019-2020.
The AGM announced following office bearers and executive committee after the election 2019:
Office Bearers:
Muhammad Rehan Siddiqui, President
Syed Hassan Naeem, Vice President
Syed Zafar Ahmed, General Secretary
Ammar Ather Saeed, Joint Secretary
Muhammad Mustafa Raheem, Librarian
Executive Committee Member:
Arshad Ali Siddiqui
Arshad Mahmood
Ghulam Rabbani
Iqbal Ahmad Abdan
Irfan Ghafoor
Khalid Mahmood Siddiqui
Muhammad Mehmood Bikiya
Syed Faiq Raza Rizvi
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Informal donations prone to money laundering: SECP
KARACHI: Pakistan has been rated amongst most charitable nations in the world but most donations are routed informally which makes the whole exercise prone for terror financing and money laundering, Waseem Ahmad Khan, Additional Director, Securities and Exchange Commission of Pakistan (SECP) said on Wednesday.
He was addressing at a seminar organized by Karachi Tax Bar Association (KTBA) at auditorium of Regional Tax Office (RTO) Karachi.
He said that SECP and State Bank of Pakistan (SBP) had taken initiatives to fix the issues on Anti Money Laundering (AML)/Countering Financing Terrorism (CFT) pointed out by Financial Action Task Force (FATF).
He informed the participants that FATF is a 37-member global body established in 1989 with mandate to combat money laundering, terror finance and nuclear non-proliferation. Besides it has also associates observers.
Pakistan as a member has international obligations to comply with FATF recommendations and correspondingly it had promulgated relevant laws including Anti-Terrorist Act, 1997, Anti-Money Laundering Act, 2010, National Counter Terrorism Act, 2013 etc. and had also devised national action plan.
Waseem Ahmad said that the SECP was undertaking enhanced due diligence on the basis of territorial / geo-political basis, sectoral lines and channel of donations.
In order to realize the full impact of spirit of generosity of Pakistan horizontally, he suggested risk management should be set up by every non-profit organization (NPO).
Khalid Mahmood, President, KTBA, in his welcome address thanked the speaker and audience who attended the seminar in a big number. The even was moderated by KTBA vice president Zeeshan Merchant.
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KTBA requests FBR to include late-filers’ name into ATL
KARACHI: The Karachi Tax Bar Association (KTBA) on Thursday requested tax authorities to include names of late filers of income tax returns, who already applied for extension, into Active Taxpayers List (ATL).
The KTBA requested the chairman of Federal Board of Revenue (FBR) to issue instructions for inclusion of the names of those taxpayers who had duly applied for extension for filing of return of income and the rejection order of which was not passed by the commission and they filed return of income by the requested due date and also those taxpayers who are registered with FBR after June 2018 and are entitled for inclusion as per SRO831(I)/2015 dated August 21, 2015 in the ATL issued by the FBR.
It said that the instruction will be in accordance with the true spirit of law and for the facilitation of taxpayers who fulfilled their responsibility as compliant taxpayers and will also encourage new taxpayers, consequently helping in increasing the tax base.
The tax bar further said that it cannot be considered reasonable that these taxpayers should be treated as non-filer for the entire next year equating them with those non-filers who did not even bother to file return at all and you will be agree that both should not be treated in the same manner.
Under Section 182A of Income Tax Ordinance, 2001 the taxpayers, who filed their returns after due date, have been denied to have their names into ATL for tax year 2018.