Tag Archives: FBR

Budget Preparation Starts, Abolishing Pension and Increase in Pay Suggested

Budget Preparation Starts, Abolishing Pension and Increase in Pay Suggested


Shahid | January 10, 2018 | category: News

Budget preparation starts, abolishing pension and increase in pay suggested.The government has started budget preparations and commenced the consultation process with the concerned stakeholders including representatives of various chambers of commerce and industries and different business organizations.

In this regard Prime Minister Shahid Khaqan Abbasi has reconstituted his own team for preparing the budget for year 2018-19 as government is in hurry and interested to complete the work before the completion of the term of the assemblies.

The Prime Minister has appointed Haroon Akhtar Khan as his Advisor, with the status of Federal Minister, who will be responsible for the affairs of the Federal Board of Revenue (FBR), and consult with the business community to prepare the recommendations for improving the collection of taxes.

The Prime Minister has also appointed Miftah Ismail as his advisor who will be responsible for dealing with the international monetary organizations for seeking loans and other financial assistance from them. To deal with political elements, the Prime Minister has appointed Rana Afzal Khan as Minister of State for Finance, who will deal with the politicians and other local organizations to seek their proposals for the next budget.

According to sources of Ministry of Finance, the government has been working on a plan to abolish the system of pension and the salaries of the government servants will be increased accordingly to the level of private sector so that the financial burden on the government for the payment of pension could be abolished. In this proposal, which will be very difficult to be adopted by the government in its last year of the tenure, the government has received suggestions that instead of giving pension, the government officials will be given handsome salaries so that they can save sufficient money at the time of retirement.

The government has also discussed this proposal with the International Monitory Fund (IMF), the main lender of loans to Pakistan but still there is no progress on this proposal and it will be further discussed at various levels in the Ministry of Finance before the finalization of the next budget.
Meanwhile, the government has also discussing the proposals to increase the funds for improving the basic needs of life including power, provision of water, gas, health facilities, education and other such basic facilities and huge amount will be allocated in the next budget so that they can seek the support of the people on the occasion of the next elections.

The sources in the Ministry of Finance said that during the recent meetings of officials of Finance Department with the representatives of IMF, Pakistan has been advised by the IMF to prepare a three year frame work which include reduction on the foreign loans, prepare a comprehensive strategy for improving the debt payment in the next three years, as Pakistan has to pay back nine billion dollars during 2018 against the loans secured by the country.

The IMF also advised the officials of the Ministry of Finance to chalk out comprehensive strategy and take adequate and effective measures to reduce the trade deficit which has increased to US dollars 36 billion. In this regard the financial team of the Prime Minister has also been asked to prepare recommendations for increase in the revenues by the FBR, give incentives to increase foreign remittances and other such options.

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FPCCI Asks PM to Mediate on Withholding Tax on Bank Transactions

FPCCI Asks PM to Mediate on Withholding Tax on Bank Transactions


Ram zi | January 10, 2018 | category: Banking

FPCCI asks PM to mediate on withholding tax on bank transaction.The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed grave concern over FBR’s inaction on section 38-B and withholding tax on bank transactions and urged the prime minister to intervene into the matter.

The FPCCI Vice President & Regional Chairman Ch.Arfan Yousaf said that challenges to economy would swell if issues of discretionary powers and withholding tax on bank transactions would not be resolved. Ch.Arfan Yousaf expressed these views while talking to a delegation of Pakistan Computers Association (PCA) at the FPCCI Regional Office Lahore.

“Being a major source of revenue for the government, business community deserves honor while withholding tax should be removed as it is unjustified and double taxation”, the FPCCI Regional Chairman said and added that indirect taxes are being removed gradually throughout the world. However in Pakistan these are contributing around 60 percent to the revenue despite the fact that expenses on this practice are higher than the collections.

He said that section 38-B is being misused badly against the business community that is one of the major reasons of low tax-to-GDP ratio. He said that exports have been already declined and trade deficit is touching the sky while such issues are adding fuel to the fire. He said that FBR should stop harassing filers as it discourages businesses to come into the tax net. Registered businesses are required to comply with various departments involving a lot of financial and time resources whereas unregistered businesses are free from all such hassles.

He said that there are 3.5 million registered taxpayers out of which only around 1 million file their tax returns. Government should take all the measures to ensure filing of returns by remaining 2.5 million individuals and businesses. The government claims that it always acts as a facilitator but in this scenario it is entirely otherwise.

Ch.Arfan said that attaching bank accounts for recovery of outstanding dues is hampering business growth and tarnishing the soft image of the government. He said that bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of Commissioner in the light of reply submitted by the taxpayer. The recovery should be after the decision of the Tribunal and not before that.

He said that unfortunately if the FBR initiates a recovery case, the taxpayer is not allowed to defend as FBR itself is the complainant and a judge. Instead of focusing on controlling under-invoicing, curbing smuggling and expanding the tax net, the FBR seems to be inclined to pressurize registered taxpayers who are already suffering due to high rate of sales tax, income tax and Custom duties by creating fictitious cases for recovery of outstanding dues to meet revenue target.

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Telecom Sector Evading Billions of Rupees Tax

Telecom Sector Evading Billions of Rupees Tax


Sumera Saeed | December 29, 2017 | category: News

Telecom Sector Evading Billions of Rupees Tax.A scam of billions of rupee avoiding payment of withholding tax being by the Telecom sector unearthed when on Friday Senate Standing Committee on Finance was informed that only one telecom company was found involved in evasion of withholding tax of rupees 267 million in just three months in FATA alone.

The Standing Committee which met here at the Parliament House under the Chairmanship of Senator Saleem Mandviwala was informed by the officials of the FBR that mobile service mproviser Telenor was found in evasion of withholding tax of rupees 267 million in FATA and PATA areas only in three months.

The Committee was informed that withholding tax is being collected from the consumers but it was not being deposited with the FBR. The committee was informed that the FBR has started receiving data from the telecom sector companies and when it was checked, the tax evasion was traced. As the Telenor was the first company to submit it’s data to the FBR therefore it’s audit was done on priority that found the tax evasion. The committee directed the FBR to complete the audit of all the telecom sector companies within six month and report to the Senate Committee about the findings.

The committee was also informed that cases amounting to rupees 89 billion relating to salea taxes are pending in the courts . The committee was informed that 100 percent penalty will be imposed if any mobile telephone service provider company will be found in withholding tax and Telenor has been issued such notices in this regard for evasion of withholding tax of rupees 267 million.The Committee was also informed that data from the telecom sector companies is being secured on daily basis now to check the payment of taxes.The meeting was attended by Senator Mohsin Khan Leghari, Senator Naseem Jalil, Senator Kalia Ali Agha, Senator Barrister Murtaza Wahab and Senator Mohsin Aziz.

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Issue of Regulatory Duty On Imports About to Resolve: LCCI Chief

Issue of Regulatory Duty On Imports About to Resolve: LCCI Chief


Sumera Saeed | December 22, 2017 | category: Business

Issue of Regulatory Duty On Imports About to Resolve: LCCI Chief. The LCCI president Malik Tahir Javaid has said that issue of Regulatory Duty on imports is near to be resolved as high government funcionaries have given assurance in this regard. “I had important meetings with Prime Minister Shahid Khaqan Abbasi, PM Assitant on Revenue Haroon Akhter, Federal Minister for Industries & Production Ghulam Murtaza Khan Jattoi, Chairman NA Standing Committee on Finance, Revenue & Economic Affairs Qaiser Ahmed Sheikh, Chairman FBR & Member Customs FBR Zahid Khokhar and demanded total withdrawl of Regulatory Duty on imports.

Good news is that they had principally agreed to move in favor of business community”, the LCCI president told the delegation of businessmen here at the Lahore Chamber of Commerce & Industry. Malik Tahir Javaid said that the Lahore Chamber of Commerce & Industry is active from the very first day on Regulatory Duty and meeting the people sitting on the helm of affairs and informing them that RD on various essential items including raw materials would harm the economy which already under pressure due to rupee devaluation, heavy borrowing, high trade deficit and poor ranking in ease of doing business.

Malik Tahir Javaid was of the view that the Regulatory Duty regime will not only destroy the exporting sector but will also hit the manufacturing sector hard as a number of raw materials have been subjected to new Regulatory Duty.

He said that new Regulatory Duty regime would be hardly doing any service to the economy. Federal Board of Revenue should totally withdraw the recently imposed Regulatory Duty otherwise its destruction would be beyoned the imaginations. He said that since various imported raw materials are being used in the local industries for manufacturing and exporting of goods therefore Regulatory Duty on these important inputs would add to the miseries of export-oriented industries. Resultantly, he said, exports would be continued to sink.

While sharing his poinv of view with the Parliamentarians, the LCCI president said that business community is already suffering because of undue delay in payment of refunds and high cost of doing business and cannot afford to bear heavy burden of Regulatory Duty that is imposed without keeping in view the ground realities.

The LCCI President said that principally Regulatory Duty is imposed on such products where local industry needs protection. The LCCI understands that protection of local industry is important for any state as it provides employment opportunities and contribute sizeable amount of revenue to national exchequer. But business community fails to understand that why Regulatory Duty is imposed on import of raw materials and other goods which are either not locally manufactured or produced in very small quantity as compared to their imports.

He said that if Regulatory Duty is not withdrawn totally it would also adversely affect the industrial sector. On the other hand it would open flood gate of smuggling and under invoicing that are already causing huge financial loss to the national kitty.

The LCCI president said that positive response from the high officials is a good omen and hopefully Regulatory Duty would be withdrawan totally until and unless genuine reservations of business community are addressed.

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Fertilizer-Subsidy-notification

Fertilizer Subsidy-notification Still Awaited Despite Government’s Assurance


Sumera Saeed | July 24, 2017 | category: Business

The federal budget was passed on 13 June and was supposed to be followed up by issue of various SROs by FBR and notifications by relevant ministries. However, performance of some of the ministries has been deplorable in this regard. Disbursement mechanism for fertilizer subsidy announced by the Government has not been notified so far, thus adding to the anxiety of the industry, which is already running from pillar to post for release of subsidy pledged in past budget.

The industry however has started passing subsidy impact to the farmers, instead of hiking the prices or stopping the sales. The industry had initially stopped the sales, however, with an assurance from Ministry of Finance that; a fertilizer subsidy-notification will be issued very soon, the sales were resumed being peak period for the crops. Unfortunately, till date, this notification has not been issued, due to some unknown reasons or procedural-delays.

The previous notification envisaged payments on the basis of GST returns submitted by the companies. However, the Ministry of Food Security had added verification of sales by the provinces, against the spirit of their own notification. While the capacity of provinces was highly questionable, KPK and Sindh did not display the will to support initiative of the federal government. This led to highly sluggish processing of claims by Food Security Ministry, which itself was not equipped with wherewithal to handle the subsidy disbursement in this complex manner. Earlier in 2005 and 2008, this Ministry had been making payments on the basis of audited financial statements of the Companies.

This time in spite of submitting indemnity bonds by the companies, the official are not feeling confident to make payments because of unknown fears, notwithstanding their decision making capacity. This crisis has escalated because an unnecessarily complex verification procedure has been adopted for the payment of the fertilizer subsidy. Hence, the backlog of unpaid and overdue subsidy amounts has now risen to over 20 billion Rupees. The ‘Ministry of Finance’ and the ‘Ministry of Food Security’ both seem to disown the subsidy program announced by the government.

This Fertilizer industry is the biggest contributor to the national exchequer and it always cooperates with the government to support the agricultural sector. But, this apathy shown by the government may, once again, force the industry to stop the sale of urea, to put some pressure on the government. The crisis may even force the companies to refuse further participation in this important subsidy-programme.

The authorities must urgently resolve this matter, by relying primarily on GST returns submitted by these prudent companies. Thus, the process of claims-verification can be simplified and expedited. But if the government continues to delay the promised notification, the country may face a bigger agricultural crisis. The ministries must act fast for a timely resolution of this matter, to help the farmers get good crop-yields and enrich the national economy.

“The provincial governments also need to be sympathetic to their farming community and must realise that there can not be two prices of fertilisers, hence they have to cooperate with the federal government for the subsidy disbursement mechanism.”

 

Private sector role vital for 7% GDP growth

Private sector role vital for 7% GDP growth


Sumera Saeed | December 16, 2016 | category: News

The All Pakistan Business Forum president Ibrahim Qureshi has said the private sector can play role in investment and job creation to achieve the required 7% GDP growth rate in the country, as the private sector knows the art of making markets work, managing risks and fostering competitiveness and innovation.

The public-private partnerships is critical for inclusive and sustainable economic growth, he said and added the implementation of policies is a key challenge in the country.

Only the private sector can drive long-term value creation for their shareholders and stakeholders by developing business models, systems, processes and production chains that manage the economic, social and environmental dimensions in a balanced manner, Ibrahim Qureshi added.

He said there is a need to introduce reforms in the tax system and new sectors should be brought under tax net. He said smuggling, under invoicing and mis-declaration are big challenges for the local industry.

Terming the present tax system of the Federal Board of Revenue as a big challenge for existing and new businesses, he suggested that the taxpayers need to be honoured with a view to improve revenue collection.

APBF president suggested that the FBR must cautiously exercise enforcement powers against the taxpayers, who are regularly contributing revenue to the national kitty. FBR’s field formations should avoid exercising powers to issue notices, sealing of business premises and attachment of bank accounts on groundless basis.

He said that if enforcement powers are exercised without fulfilment of legal formalities, it would send a negative message to the existing investors as well as discourage the new businesses in all over the country.

What an investor needs is secure environment to achieve his goal and be able to contribute to the economy of the country, which could only be possible if the concerned departments extend their support and cooperation, he added.

Ibrahim Qureshi said the government has achieved some macroeconomic targets during last three years; however, declining exports and widening trade deficit still constitute a big challenge that should be focused by the policymakers.

He said that the rising oil prices in the international market and declining exports are negative signs for the country’s current account balance. However, he was optimistic about China Pakistan Economic Corridor saying the country’s economy is bound to grow faster with the completion of the projects of over $46 billion Chinese investment in Pakistan.

He suggested that the government should introduce reforms especially in the tax system and other sectors should be brought under tax net to achieve 7% growth rate of GDP that is essential of economic stability.