The Federal Board of Revenue (FBR) is taking steps to prevent sugar smuggling and ensure sufficient availability in the domestic market.
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Prime Minister directs strict action against smugglers of wheat, sugar and urea
On Tuesday, Prime Minister Shehbaz Sharif instructed the authorities to take strict action against smugglers of wheat, sugar, and urea, which negatively impacts Pakistan’s foreign remittances and deprives its people of their rights.
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PM Sharif chairs meeting to combat sugar smuggling and hoarding
Prime Minister Shehbaz Sharif chaired a crucial meeting to address the soaring prices of sugar and the pervasive issues of smuggling and hoarding in the country.
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SBP issues instructions to banks for sugar export
KARACHI: State Bank of Pakistan (SBP) on Saturday issued instructions to banks regarding export of sugar that was allowed by the government.
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FBR directed to bring entire sugar supply chain into tax net
ISLAMABAD: President of Pakistan, Dr. Arif Alvi has directed the Federal Board of Revenue (FBR) to bring entire supply chain of sugar sector into to tax net.
Dr Arif Alvi directed the tax authorities to bring into the tax net the unregistered wholesalers, dealers or distributors of sugar buying huge quantities from sugar mills to broaden the tax base, according to a press statement issued on Monday April 25, 2022.
READ MORE: President Alvi retains major penalty on NAB official
The President observed that despite making huge monetary transactions and the availability of their data with FBR, these unregistered buyers of sugar largely remained outside the tax net and were evading the prime national responsibility of paying taxes.
He passed these directions while upholding a decision of the Federal Tax Ombudsman (FTO) directing FBR to bring unregistered buyers of sugar in bulk into the tax net to improve the collection of sales tax and reporting compliance within 90 days.
As per details, FTO had initiated an Own Motion investigation against the failure of FBR to bring into the tax net the unregistered buyers of sugar from M/s Naudero Sugar Mills (Pvt) Ltd.
READ MORE: President Alvi directs bank to refund unfair recovery
The FTO observed that non-NTN holders had been buying huge quantities of sugar from sugar mills and their data was fully accessible by the FBR but this huge potential for tax collection remained unutilized.
In its report, the FTO highlighted that during the last four years sugar worth Rs 2.7 billion was supplied by the said mills to various unregistered buyers, only three buyers held NTN, and FBR had not paid due attention to broadening the tax base.
It further observed that this low hanging fruit had not yet been harvested and despite making huge monetary transactions, unregistered buyers of sugar remained outside the tax net.
READ MORE: President Alvi rejects FBR plea in maladministration cases
The FTO underscored that unregistered persons were easily identifiable because sugar mills were required to maintain records of supplies made during the tax period and issue tax invoices indicating names, addresses, description, quantity, values of goods, CNIC or NTN of persons to whom the supplies were made under the Sales Tax Act of 1990.
Based on these findings, FTO had directed the Chief Commissioner, Large Taxpayers’ Office, Karachi to enforce compliance after obtaining data of unregistered persons from the sugar mills.
The FBR filed a representation with the President against this order of FTO. President Dr Arif Alvi disposed of the matter with the observations that FBR’s field formations were not vigilant in collecting information related to unregistered buyers and were content with just whatever was being submitted in the monthly sales tax returns of mills.
READ MORE: Dr. Alvi orders action over misconduct with 82-year taxpayer
He regretted that the data of unregistered buyers was not being examined for the purpose of broadening the tax net. He noted that FBR’s field formations held jurisdiction over sugar mills and could secure the complete particulars of all buyers by proper and timely analysis of withholding statements.
Serious negligence and inefficiency on part of the field formations of FBR in the discharge of its duties was tantamount to maladministration, he added.
He observed that FTO’s recommendations were only a reiteration of the duty of FBR to strictly deal with unregistered sugar dealers to bring them under the tax net.
READ MORE: Dr. Alvi rejects banker’s plea in woman harassment case
He directed that FTO’s recommendations must be applied to the entire sugar sector to increase compliance with taxes and to enrol those who were escaping the prime national responsibility of paying taxes.
The President disposed of FBR’s representation with the direction to submit a comprehensive implementation report to FTO within 60 days.
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Retail price of sugar may be abolished for sales tax
ISLAMABAD: The government has proposed to withdraw sugar for charging sales tax on retail price by making amendment in the main tax law.
Through Finance (Supplementary) Bill, 2021 dated December 30, 2021, the government proposed to withdraw the condition of collecting sales tax on sugar retail price.
The government after just six months of making legislation regarding sales tax on sugar has proposed to withdraw the law.
READ MORE: Jahangir Tareen’s sugar mill declares 248% rise in annual profit
In case the parliament approve the bill, then whatever retail price is the sales tax to be collected at the value notified by the Federal Board of Revenue (FBR).
The FBR through SRO 1027(I)/2021 dated August 16, 2021, notified the minimum value of the domestically produced white crystalline sugar at Rs72.22 per kilogram from Rs60/kg.
The FBR on July 01, 2021 issued Circular No. 02 of 2021 to explain inclusion of sugar in the Third Schedule to the Sales Tax Act, 1990.
“Currently, the price of white crystalline sugar is fixed at Rs60/kg in terms of SRO 812(I)/2016 dated September 02, 2016, which is considerably below the actual market price of the commodity. In order to address this anomaly, sugar is proposed to be included in the Third Schedule to the Sales Tax Act, 1990, so that sales tax is charged and collected on actual retail price of the product at the manufacturing stage.
READ MORE: Digital tax monitoring yields Rs32.43bn from sugar sector
“This measure would not only ensure due payment but also help in putting a more effective price control mechanism in place for sugar.”
In its memorandum on the finance supplementary bill, PwC A. F. Ferguson & Co. – a chartered accountancy firm, said that goods specified in the Third Schedule are subject to sales tax on their retail price.
“At present, the Government is empowered to include or exclude any goods from the Third Schedule through a notification. The Bill proposes to vest such power to the Board [FBR].”
READ MORE: FBR tightens condition for tax stamped sugar bags
Through the Finance, 2021 sugar was included in the Third Schedule whereby sugar supplied other than as industrial raw material to pharmaceutical, beverage and confectionary industries was subject to sales tax at retail price.
Through SRO 989(I)/2021 dated August 5, 2021, sugar was taken out of Third Schedule for the period from July 1, 2021 till November 30, 2021.
The bill proposes to exclude sugar from Third Schedule w.e.f. December 1, 2021; thus, making it liable to sales tax at its value of supply across the board.
READ MORE: FBR decides posting officials for sugar crushing 2021-22
KPMG Taseer Hadi & Co. – another chartered accountancy firm, explained that the Finance Act, 2021 had put sugar at serial No. 50 of the Third Schedule with the exception of sugar supplied as an industrial raw material to pharmaceutical, beverage and confectionary industries.
“Now the bill proposes to omit the entry, effective from December 01, 2021, meaning thereby that henceforth supply of sugar will be taxable at 17 per cent of the value thereof.”
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Digital tax monitoring yields Rs32.43bn from sugar sector
ISLAMABAD: The digital monitoring initiated by the Federal Board of Revenue (FBR) has resulted in a collection of Rs32.43 billion from the sugar sector during the first half of the current fiscal year.
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FPCCI recommends interprovincial trade of sugar
KARACHI: Mian Nasser Hyatt Maggo, President, Federation of Pakistan Chambers of Commerce and Industry (FPCC), has recommended trade and transportation of sugar and sugarcane at interprovincial level.
In a statement on Wednesday, Maggo observed that market forces allowed under fair and transparent conditions do have the potential to stabilize the sugar market and ensure availability across Pakistan on competitive prices.
FPCCI Chief has maintained that no government can continue to regulate and subsidize any major commodity for an indefinite time period and for an indefinite expenditure cap. He added that around 60 per cent of sugar is consumed in the country by commercial consumers; and, these consumers can create a healthy competitive environment.
Healthy competition and free market access is the only real-world, efficient, consumer-friendly and sustainable solution to Pakistan’s chronic food inflation; which has doubled the food prices in the past few years alone, he added.
Adeel Siddqui, VP FPCCI, said that the price of sugar will continue to be unstable and will continue to add inflationary pressures if the sugar cane crops of different provinces remain confined to their provincial boundaries. Free market is the answer to price instability in the wheat flour as well, he added.
He stated that the currently ongoing crushing season will see a bumper sugar crop and, in any case, opening up of provincial borders for sugar cane transportation will help bring the sugar prices down substantially and relieve the masses at large.
Maggo added that Pakistan Sugar Mills Association (PSMA) and the government are face-to-face on the issue of restricted movement of sugar within provinces; and, as President FPCCI, he is ready to mediate between the government and PSMA to reach a win-win resolution.
He emphasized that the Ministry of Finance & Revenue and Food Security & Research should establish a better and functional liaison with the stakeholders of sugar industry at every stage to avert any future sugar crises in the country; and, also, save precious foreign exchange reserves through creating an enabling environment for the domestic sugar industry.
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FBR bans sugar bags movement without tax stamps
ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday has taken major decision to ban removal of sugar bags from factory premises without affixation of tax stamp.
The condition has been imposed to implement track and trace system for monitoring of production and supply of the commodity for the crushing season 2021-2022.
In order to implement the decision the FBR issued Sales Tax General Order (STGO) No. 05 on November 11, 2021. “No sugar bags shall be allowed to be removed from a production site, factor premises or manufacturing plant without affixation of tax stamps/Unique Identification Marking (UIMs) with effect from November 11, 2021, which are to be obtained/procured from FBR’s Licensee M/s. AJCL/MITAS/Authentix Consortium,” it said.
The purpose of imposing the condition is to launch electronic monitoring of the commodity as the sugar crushing for the season 2021-2022 is about to start.
Sources in the FBR said that the track and trace system was not fully installed at sugar mills. There are still few sugar mills that were in process to install the electronic monitoring system.
In the meantime, the FBR may also deploy tax officials at the sugar mills by invoking Section 40 B of the Sales Tax Act, 1990 for parallel monitoring.
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PM directs pursuing legal cases against sugar mills
ATTOCK: Prime Minister Imran Khan on Friday directed the law minister to pursue the cases against sugar mills on urgent basis for the benefit of general public and for addressing price hike of the commodity.
To address the ongoing sugar crisis, Prime Minister Imran Khan on Friday directed the law minister to urgently get vacated various stay orders obtained by the sugar mill owners from courts against the government.
Addressing a public gathering after the foundation-laying of a 200-bed mother and child hospital, the prime minister said closure of sugarcane crushing by three sugar mills in Sindh and the subsequent hoarding was the reason behind the current spike in sugar prices.
The sugar price soared as wholesale rate touched Rs150 per kilogram in most parts of the country and retail rate up to Rs160kg.
Imran Khan said the sugar mills had attained stay orders against the fine imposed by the Competition Commission of Pakistan.
Also, the other stay order was against Federal Board of Revenue (FBR) in line with its action on tax evasion and the ‘off-the-books’ activity of sugar mills.
On overall inflation, he said Pakistan was bearing the impact of global price hike of commodities, mainly due to shortage of supplies in the wake of pandemic.
He said the sharp increase in global petroleum prices from $45 to $85 dollar greatly affected Pakistan as the country relied on imports of several items, including petrol, palm oil, and pulses.
Despite such a situation, he said, Pakistan had the lowest rate of petroleum at Rs 146 per litre among importing countries compared with India at Rs 250 and Bangladesh at Rs 200 per litre.
Imran Khan hoped that as the world businesses open up after decline in pandemic following the coming winters, things would improve.
To reduce the financial impact on poor, he said the government had recently provided food subsidies to 130 million people across the country through Ehsaas programme.
He mentioned that other socio-welfare initiatives such as Kamyab Pakistan would provide interest-free loans to two million households for house building, start-ups, and skills training. Also, the Kamyab Jawan is providing loans to youth across the country, he added.
The prime minister said establishment of five mother and child hospitals in two years would ensure provision of health facilities to women on health issues related to gynecology and obstetrics.
He said it was shameful that due to the apathy of previous governments, a rise in deaths of women during pregnancy was recorded in the wake of non-availability of medical facilities.
He said by March, all households of Punjab would get health insurance of Rs 0.7 to one million for their medical treatment.
He termed the health card a proper system where the private sector would also be encouraged to establish hospitals in rural areas so as to expand the network of healthcare facilities.
Imran Khan said the priority of his government in its tenure was to uplift the people and provinces that lagged behind in development.
On completion of five years, he said, his biggest success would be to bring a positive change in the lives of common man.
He regretted that Pakistan in the past suffered the rule of two political families in 30 years that incurred a huge loss to national exchequer.
The prime minister mentioned that under his government, the country for the first time was witnessing an era of long-term planning besides the boom in industrial growth, exports and historic foreign remittances.
Chief Minister Punjab Usman Buzdar said the mother and child hospital in Attock would provide quality healthcare facilities to two million residents, particularly women, of the Attock district and in the suburbs.
He said the Punjab government would complete the 200-bed hospital equipped with modern facilities in two years at a total cost of Rs 5.3 billion. The federal government has already released Rs 2.66 billion to Punjab for the project.
He said establishment of 21 different universities in the province was also under consideration.
Punjab Health Minister Dr Yasmin Rashid said the mother and child hospitals would help the women get timely medical advice and treatment.
She said after 50 years, the second phase of Nishtar Hospital would be constructed in Multan to meet the medical needs of the growing population.