ICAP submitted budget proposals to government; held media briefing

Islamabad, April 05: The Institute of Chartered Accountants of Pakistan (ICAP) recommends that the policy decisions are required with the objective to broaden the tax base to enhance resources and plug tax leakages. All sectors of the economy must be brought within the tax-net. Irrespective of the source of earning, anyone who earns beyond a certain threshold of income should be mandatorily required to file tax returns. Moreover, an efficient model for growth requires equitable taxation and credible tax administration.

These set of recommendations is already submitted to the Government of Pakistan for consideration in new fiscal budget 2018-19.

Ashfaq Tola, Chairman Committee on Fiscal Laws and Council Member ICAP accompanied by Razi Khan, Executive Director, ICAP briefed journalists about institute budget proposals and shared its further details at a media briefing held here at a local hotel on Thursday.

They told that Pakistan’s tax-to-GDP ratio is the main impediment in the economic development, which has compelled the government to take short-term tax measures. At present, there is over dependence on the indirect taxes. It is, therefore, felt that withholding tax in indirect taxes both in federal and provincial level should be withdrawn. The FBR should focus on increasing the tax base instead of further burdening the existing taxpayers, they added.

The corporate sector, which is the most documented segment of the economy, has been neglected due to extreme abrupt tax collection measures taken by the government in order to meet annual budget targets. Further, the organized sector is seriously affected by incidence of sales tax (and federal excise duty, where applicable) as against non documented economy or unorganized sector.

The service, wholesale/retail, transport and the agriculture business sectors are still not fully documented and most of them are out of the tax net. Even more than three million persons having commercial electricity connections are hardly into the tax net. There is a serious need for the policymakers to simplify the complex system of determining the tax liability. Immediate remedial measures include abolishing taxes like alternative corporate tax, tax on undistributed profits and super tax, they maintained.

Ashfaq Tola said that service providers, both corporate and non-corporate, should be exempted from levy of minimum tax. By charging nominal additional tax and creating narrow difference in tax deduction of filers and non-filers, the government failed to attract unregistered persons to get themselves registered. In order to obtain/utilize party wise data of unregistered persons from whom sales tax @ 1% is deducted, a minimum threshold for sales tax withholding should be introduced in lines with the Income Tax Law, he added.

About Harmonization of Sales Tax on Services, he said that following measures are suggest;

A uniform service tax law should be agreed upon by all provinces and the federal government for implementation in their respective jurisdictions by respective tax authorities. Further, a uniform tax return may also be introduced for the taxpayers.

Revenue authorities should decide the basis of levy of indirect tax, which can be origination or termination to establish jurisdiction of taxation of services.
To promote transparency and uniform interpretation, the first schedule should be standardised covering all services along with standard tariff headings and standard definitions. The standard first schedule should be adopted by all provinces and Islamabad Capital Territory while levying sales tax on services in their respective jurisdictions.
One return may be filed with identification of provincial head of account and direct deposit of share of tax of each province and central directorate of audit with representation from each province and the FBR.

Tax Administration

Tax administration requires institutional rebuilding, designed to strengthen the independent policy-making role of Federal Board of Revenue (FBR), modernize the tax system and formulate independent, fair and transparent tax policies. Efforts are required to separate tax policy and tax administration. The FBR should be responsible for implementation of policies and collection of revenue only. The FBR may be converted to an autonomous and independent institution that has structural and strategic support necessary for its organizational development and capacity building.
Power to make adjustments to compute accounting income should not rest with commissioner and accounting income as reported in the audited financial statements of the organization, which are prepared in accordance with IFRS and Companies Act 2017 should be considered.
It has become practice of tax authorities of visiting the taxpayer’s bank and coercing the bank manager to immediately pay the amount from taxpayer’s account against the tax amount recoverable or else face the consequences. In some cases, recoveries are made in haste even where the matter has already been decided by the judicial forum in favor of taxpayer.

Other Key Recommendations were;

1) All presumptive/value addition/fixed tax schemes should be abolished and all such sectors/ goods may be brought under the uniform tax regime to promote the culture of income-based taxation rather than receipt based taxation. The scope of opting out of final tax regime be expanded to cover all incomes falling under FTR and the rates of minimum tax for opting out of FTR be reduced to raise the difference between final tax and minimum tax by at least one percent.

2) Section 111(4)(a) of the Income Tax ordinance should be abolished; alternatively the applicability of Section 111(4)(a) should be made conditional i.e. remittances by an overseas non-resident Pakistani to a relative as defined in Section 85(5) without any threshold. However, remittances by others may be subject to tax scrutiny if it exceeds the limit prescribed by the State Bank of Pakistan, which is currently $10,000. Alternatively, until this provision is abolished, this kind of remittance should be restricted solely for the purpose of investment in industrial undertaking in Pakistan.

3) Minimum tax should be reduced to 0.5%. Moreover, companies having a gross loss position for the year should be excluded from the purview of the minimum tax. The law should also be clarified to allow carry forward of minimum tax paid in the year of loss.

4) Section 65A should be reinstated in order to encourage documentation and broadening of tax base. Moreover, condition of 90% supplies to registered persons be reduced to 75%. The restricted benefit of this tax credit to manufacturers be extended to all persons registered under the Sales Tax Act.

5) FBR values of immoveable properties are far below the fair market value, may be gradually increased. However, at the same time the rates of stamp duty and other transfer taxes levied by provinces should be reduced to keep the cost of transfers stabilized.

6) To promote, encourage and incentivise export of services, income from export of all types of services should be exempted like IT enabled services. Alternatively, export of services be subjected to reduced rate of tax as in case of export of goods.

7) Section 38 empowers the tax department to conduct investigation without any time limitation. Accordingly, where a detailed investigation of a registered person has already been conducted under Section 38, there should not be a need to conduct audit of that person under Section 25.

8) Extra tax at the rate of 2% is levied and collected by the manufacturers and importers on specified goods. Subsequent supply of these goods is exempt from the payment of sales tax including those as made by retailers as per Rule 58T (5). Extra tax is collected to ensure collection of value addition of subsequent supply stage; therefore, levying further tax is an irritant and absurdity which needs rectification to streamline the VAT regime.

9) The scope of Alternative Dispute Resolution Committee (ADRC) has been restricted to issues on facts only. Further, the decision of the ADRC is subject to an overriding approval of the Federal Board of Revenue. To curb the ever increasing and never-ending litigation and disputes between taxpayers and tax department, ADRC mechanism should be used to resolve all taxpayers’ matters without any restriction, and its decision should be made binding on FBR.

10) Commissioner-Appeals should be brought under the administrative control of Federal Ministry of Law and the Appellate Tribunal under the control of the High Court of the respective jurisdiction. Further, establish Tax courts appointing learned judges of High Court as its member for speedy process against the decision of ATIR.

Price of petrol, diesel slashed by over Rs2

The federal government announced a new tariff for petroleum products on Saturday, reducing the per-litre price of petrol and diesel by Rs2.07 and Rs2.00 respectively.

From April 1, 92 RON petrol will be sold for Rs86 and high speed diesel for Rs96.45, while prices of kerosene and light diesel will be maintained, a press release by the Ministry of Finance stated.

The statement said the Oil and Gas Regulatory Authority (Ogra) had asked that the prices of light diesel and kerosene should be increased — recommendations that were not adopted and thus respective price for the products maintained at Rs65.30 and Rs76.46 respectively.

The ministry, however, also stated that Ogra had asked for a greater price cut for petrol — another recommendation that could not be followed completely as, the ministry explained, the price cut granted in previous months was more than what was asked for.

The prices will remain effective until April 30.

Based on existing tax rates and import prices reported by Pakistan State Oil, Ogra had recommended a reduction of Rs5.26 per litre in the price of petrol for April.

The regulator had also recommended an increase of 65 paisa per litre for high speed diesel, 55 paisa per litre for light diesel oil and 13 paisa per litre for kerosene.

Pakistan Stock Exchange closes week on negative note

The Pakistan Stock Exchange (PSX) closed the week on a negative note, with the benchmark KSE-100 Index losing 265 points to close at 44,551.

The market hit a day’s high of 44,826 points, up only 9 points from the yesterday’s closing, during the first few minutes before adopting a negative trend. The benchmark index subsequently hit a day’s low of 44,196 points before recovering ahead of the midday recess.

In all, 270.7 million shares worth Rs9.17 billion were traded in the session. Of the total of 351 traded scrips, 146 advanced, 175 declined and 30 remained unchanged.

The power generation and distribution sector dominated trading with 41.3m shares traded; cement and chemical scrips followed with 37.0m and 30.9m shares traded respectively.

Volumes were led by: – K-Electric Ltd: 39.2m shares traded [+1.62pc];

B.O.Punjab: 19.4m shares traded [+0.91pc];

Azgard Nine: 19.2m shares traded [+3.20pc];

Dewan Cement: 19.2m shares [-4.99pc];

Lotte Chemical: 15.9m shares traded [+0.86pc].

Pakistan Stock Exchange continues positive run as KSE-100 index crosses 45,000-mark

The Pakistan Stock Exchange (PSX) registered nominal gains on Wednesday following another volatile session, with the benchmark KSE-100 index gaining 156 points to close above 45,000 level.

The index opened higher and touched the day’s high of 45,495 points before facing a mid-session fall which brought the index to 44,782 points before it managed to close at 45,063.

All share volumes increased by 114 million shares from Tuesday to around 340 million shares today. The traded value also climbed to Rs18.2 billion from Rs13.3 billion a day earlier.

Of the total of 374 traded scrips, 215 advanced and 139 declined while 2 remained unchanged.

The cement sector dominated trading for the third session in a row with 58.6 million shares traded while technology and communication followed with 46.4m shares traded.

Volumes were led by:

TRG Pak Ltd: 29.0m shares traded [-0.14pc];

Fauji Cement: 18.7m shares traded [+4.76pc];

Sui South Gas: 15.2m shares traded [+1.19pc];

Aisha Steel Mill: 14.6m shares traded [+0.91pc];

Power Cement: 14.2m shares traded [+3.48pc].

Bullish run continues at PSX as benchmark index gains 719 points

The positive run at the Pakistan Stock Exchange (PSX) continued on Monday, with the benchmark KSE-100 index gaining 719 points to close at 44,898 points.

The market slipped to the day’s low of 44,122 early in the day but shot back to touch a high of 44,951 points towards the session’s close amidst active trading.

Volumes at the exchange soared to over 294 million shares, while the total traded value stood at Rs13.25 billion. Of the 380 scrips traded, 275 advanced, 91 declined and 14 remained unchanged.

The cement sector dominated by a margin, with 47.9m shares traded.

Volumes were led by:

Amtex Limited: 19.7m shares traded [+44.62pc];

Power Cement: 16.0m shares traded [+8.49pc];

TRG Pak Ltd: 15.4m shares traded [+4.81pc];

Pak Elektron: 15.1m shares traded [+4.56pc];

Azgard Nine: 12.9m shares traded [-0.67pc].

Bullish run continues at Pakistan Stock Exchange as KSE-100 index gains 222 points

Bullish run at the Pakistan Stock Exchange (PSX) continued on Thursday, with the benchmark KSE-100 index gaining 222 points to close at 43,581 points.

A volatile session was observed as the index opened higher touching the day’s high of 44,004 points, it touched the day’s low of 43,193 points before settling.

Volumes improved vastly as around 269 million shares worth Rs13.7 billion were traded at the exchange, with 217 of the 374 traded scrips advanced while 148 declined and nine remained unchanged.

The technology and communication sector dominated trading with 31.7m shares traded while cement and chemicals followed with 30.0m and 26.0m shares traded, respectively.

Volumes were led by:

TRG Pak Ltd: 17.6m shares traded [-0.93pc]

Lotte Chemical: 15.4m shares traded [+5.90pc]

Azgard Nine: 13.2m shares traded [-0.53pc]

Dewan Cement: 11.6m shares traded [+0.04pc]

Sui South Gas: 11.3m shares traded [-0.68pc]

Stocks close green as domestic investors wake up to rally

The Pakistan Stock Exchange saw renewed interest from domestic buyers as investors looked to gain a foothold in the market amidst sustained foreign buying.

The KSE-100 Index closed the day at 42,940 points, up 592 points (1.40 per cent) from the day’s open, but below the highest point of 43,143. The day’s low (42,324) was recorded shortly after trading commenced and right before a sharp surge took the market into green territory.

Today’s sharp move was likely driven by the ‘fear of missing out’ or FOMO in short, where domestic investors who have been in the foreigners’ shadows when it comes to buying equities [sprang into action],” read a Topline Securities note.

“Excluding today, foreigners have bought nearly $58m of Pakistan stocks year‐to‐date, while funds have only purchased $1.2m and banks have sold $20.2m,” it continued.

“Investors also took [Tahirul] Qadri’s announcement of a temporary protest against the Model Town incident rather than a sit‐in, positively,” it added.

Overall volumes improved to 161m shares traded (worth Rs7.22bn) compared to 149m (Rs5.88bn) a day earlier.

Cements (22.7m shares traded) led market activity, followed by commercial banks (20.1m) and transport (16.8m) scrips.

The top symbols by volume were:

PIA: 15.75m shares traded (+6.92pc)

Faysal Bank: 11.66m shares traded (+1.98pc)

Dewan Cement: 8.48m shares traded (+4.79pc)

TRG Pak: 7.8m shares traded (+0.80pc)

WorldCall Telecom: 7.01m shares traded (-0.36pc)

Gold prices hit 5½-year peak

KARACHI: The per 10-gram and one-tola gold prices on Saturday hit a five and half years peak at Rs49,628 and Rs57,900 after a jump of Rs257 and Rs300, respectively.

The All Sindh Sarafa Association (ASSA) cited the $8 per ounce rise to $1,339 per ounce in the world gold price for pushing up the local bullion rates.

Since the start of the year, the domestic 10-gram and one-tola gold prices have swelled by Rs1,457 and Rs1,700, respectively, followed by $35 an ounce rise in the world rates.

On Jan 1, ASSA quoted rates of Rs48,171 per 10-gram and Rs56,200 per tola while world bullion rate was $1,304 per ounce.

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Local gold prices had been under pressure since June 2017 following persistent jump in world bullion rates as well as rupee’s devaluation against the US dollar. From June till to date, the local 10-gram and one tola rate had seen sharp rise of Rs6,771 and Rs7,900 respectively, while international gold price saw $73 per ounce hike in the above period.

Local rates prevailing on June 1, 2017 were Rs50,000 and Rs42,857 respectively, while international price was $1,266 per ounce.

The upward trajectory poses a burden to the buyers looking to purchase the commodity in lieu of the ongoing wedding season.

ASSA Chairman Haji Haroon Rasheed Chand claimed the current rate to be the highest in the last five and half year, recalling that in first week of April 2012, the record high rates of 10g and one-tola gold were Rs49,371 and Rs57,600 respectively, based on world gold price of $1,616 per ounce.

While the current international rate is lower as compared to the 2012 one, the dollar was then cheaper in terms of the rupee thus accounting for the lower local price, he added.

PSX ends positive streak as benchmark index loses 298 points

The 13-day bull rally at the Pakistan Stock Exchange (PSX) ended on Tuesday, with the benchmark KSE-100 index losing 298 points to fall below the 43,000-mark.

The index opened higher to test the day’s high at 43,251 before spiraling downwards to touch a low of 42,567 points.

In all, 225 million shares worth Rs9.8 billion were traded at the exchange. Of the 366 traded scrips, 132 advanced, 212 declined and 22 remained unchanged.

The technology and communication sector dominated trading by a margin with 45m shares traded.

Volumes were led by:

TRG Pak Ltd: 23.5m shares traded [+4.62pc];

WorldCall Telecom: 19.5m shares traded [-5.36];

Pak Elektron: 16.0m shares traded [+4.31pc];

Sui South Gas: 15.7m shares traded [+2.93pc];

Azgard Nine: 8.3m shares traded [+0.33pc].

Tharparker- where women weave ideas and patching dreams!

Along dark green landscape, an smooth road brought me up to one of the loneliest but culturally rich part of the country. Visiting Tharparker- the beautiful desert was my long standing travel goal finally happens while exploring and capturing some scenic and un divulge side of mysteriously stunning place!

The desert Thar that buzzing with activity as people become engaged with cultivating the land as the dull, arid landscape transforms into a luscious green after rain. The peace and beauty that fells like diluted in the atmosphere of Thar is not just due to rain as the livelihood of Thari people depends on rainfall agriculture but the most stunning initial finding come across that prosperity and peace herald of Indigenous handy craft and traditional skill become instrument to achieve social-economic development of dwellers of Thar!

Today, Tharparker- the desert region has a high population of women engaged in embroidery activities, micro credit schemes to run their small enterprises for income generation. They are skilled, they embroider beautifully, and they know how to make their traditional craft into modern patterns. This is the truly prosperous side of desert Thar as what I found that how indigenous art and craft of Women of Thar become change agent towards achieving global sustainable development goals (SDGs) as well! The success story of initiative taken by social development organizations (NGOs) and government led development projects working with women groups as an example of participatory, collective and sustainable effort to accelerate women empowerment. The successful process of capacity building and inclusion of women in various aspects of empowerment through handy craft based income generation projects which turns to achieve roadmap towards SDGs.

Tharparker district , The desert region is a part of Mirpurkhas division of sindh province in Pakistan . The area is driest region of the country as the vast deserted area have extreme temperatures and stunted plant life. Desert people struggle to earn their livelihood as the options of source of income are very few in the region, This has had severe impact and influence of the natural environment of Thar. Due to poverty and hunger, the socio- economic condition of the region is vulnerable specially for women .

The hard-hitting territory of Tharparker of Pakistan makes the life of women even tougher, but the journey of development initiatives bring up remarkable and inspiring stories of achievement and progress for women of Thar. Since 1990 to 2016, Tharparker witness many development intervention on behalf of local, national, international NGOs and Government owned development programs. These initiatives of women empowerment programs are great source of bringing prosperity and uplift socio-economic condition of women in Tharparker. For women, embroidery and hand-made crafting activities played a prime role by contributing significantly to the household income. As far as income generation is concerned, desert folks usually prefer to do off-farm and non-farm activities like weaving, embroidery, spinning, dying, block-printing, woodwork and other handicrafts.

They are continuing with their indigenous and traditional embroidery and handy craft skills with the contemporary designs, colors emerging into modern fashion and updated clothing trends. Rural women artisan’s capability and improved socio – economic status in Tharparker thus tries to explore various layers of improved development indicators. Handy craft that emerge as a small scale enterprise has brought visible socio-economic changes in the lives of the poor women artisans. The social change in their communities, gender awareness and women’s equal status with men is quite visible. Rising sense of awareness and confidence and the feeling of ownership and equality among craft women as pursue her role of contributor of family income. Successively over a decade, taken Initiatives and interventions from development organizations and government –lead programs brings measurable and sustainable change. It is fascinating to see the women of the village are more aware about her capabilities, rights and worth. The indigenous skill and traditional craft that woman of Tharparker possess since ages becoming source to bring real change at grass root level and somehow ultimate consequential to improve indicators of achieving Sustainable development goals. They work to earn money for food, fodder and fuel in order to meet the daily demands of the lives of their families. They priorities to obtain education and health facilities for their families, addressing SDGs Goal number 3 and 4, their socio-economic conditions are improving, which means SDGs goals number 1 which is NO POPERTY, goal number 8 which is decent work and economic growth ,SDGs goal number nine which is industry, innovation and infrastructure and SDG goal number 10 which is reduce inequality are significantly addressed and improving indicators with the connection of sustainable development goals – a universal set of development agenda aimed to achieve by 2030 by all UN countries, Tharparker emerges as a progressive example leading to obtain some of indicators of SDGs accomplishment.

I would confidently establishes the fact that if women get opportunities, exposure, support system, mentoring and proper capacity building they can be the breadwinners, trendsetters, and change agents. And it found the fact in Thar that the Thari woman now speaks against discrimination, inequalities and motivate themselves to have a greater participation in decision-making, access to information, develop life skills and confidence to prevail and peruse entrepreneurship. The indigenous art and craft of women of Thar, become source of social change and by the time brings ultimate result to achieve universal set of development goals (SDGs) hopefully by 2030.
Tharparker pursuing this empowerment. Ahead of the dark blur of poverty, there is immense horizon of creativity of craft, local wisdom and hardworking. Thousands of women weave new ideas and patching their dreams into new horizon. I strongly believe that women have immense potential to lead the development agenda by utilizing her in-born and in-built traits. This is the right time to re-view, re-shuffle and re-bound development innervations in more consolidate form to explore hidden treasure of hope, prosperity and integrity of Tharparker.

About Samreen Khan Ghauri:
She is a Multi Media journalist, Researcher and development practitioner, passionate advocate for women rights, can be access on [email protected] & @samreen_ideas