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Under the Free Trade Agreement (FTA)-II between Pakistan and China, which is expected to be signed during Prime Minister Imran Khan’s visit to China for the Belt and Road Forum, Pakistan is expected to export more than 300,000 metric tons of sugar to China. With this rise in exports, Pakistan is expected to generate more than $110 million in revenue. It is also expected that Pakistan’s exports to China are expected to rise up to $3.2 billion by 2020, under the FTA-II.


ISLAMABAD: Pakistan will start exporting 300,000 metric tonnes (MT) of sugar to China from the month of June 2019.

Beijing has placed the order with Islamabad after signing the Free Trade Agreement (FTA), and resultantly the trade between both countries have surged.

Pakistan expects to generate more than 110 million US$ in revenue from the export of sugar to China.

Pakistan’s exports to China are expected to reach 2.2billion US$ in the ongoing calendar year and 3.2billion US$ in 2020.

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Taxation
Tax experts have lauded the idea of fixed tax introduced by the Federal Board of Revenue (FBR), saying that taxpayers would like to avail it as they would get rid of the harassment as a result of raids by the field staff of FBR. The idea of fixed tax would be implemented in Islamabad and Rawalpindi at the first stage, followed by rest of the country.

Taxpayers would feel comfortable as they would have not to file a return and prefer to pay a fixed tax amount on the basis of electricity consumed by them. The tax would directly be paid in banks the receipts would be exhibited to department on demand. For traders, it would be an ideal situation that there is neither the hassle of self-assessment scheme nor the audit, said tax practitioners.

“The FBR can charge it in two installments,” they said and added that this mode of taxation would generate more revenue than the present self-assessment system.

They said the self-assessment scheme is the main cause of low tax recovery. Late General Zia-ul-Haq had introduced self-assessment tax scheme that provided the facility of no audit in case taxpayers file a return with enhanced amount comparing to the last tax year. However, Pervez Musharraf had introduced universal assessment scheme that gave option of filing zero return with a mandatory condition of audit. Tax experts are of the view that both General Zia-ul-Haq (late) and General Pervez Musharraf (retd) had introduced this system to create a constituency during their regime.
However, civil governments of the past have not been as active on this front as the present government is. They said Prime Minister Imran Khan is carrying a perception that the FBR is not only short of target but also far away from its real potential of tax collection. However, they have added in the same breath that Imran Khan is least bothered about the fact that tax collectors are harassing taxpayers.

They said taxpayers do not pay tax because they believe that they are overcharged. Secondly, every tax payer has an impression that he is paying more tax when compares himself with those who do not pay tax. Finally, the third factor is that of audit, which has proved an impediment in tax system.

They have lamented that the field staff keeps the government in dark while arm twisting of taxpayers by force on false assessments. A list of 100 taxpayers has recently been submitted to the finance minister, suggesting that billions of rupees have been collected through recent raids. But they are not telling the government that they have grabbed tax amounts by force that would be followed by litigation and return/adjustment of the amounts collected by force.

In a recent incident, the field staff of Regional Tax Office (RTO) Lahore along with private guards and TV channels raided a hotel in search of offices of an apartment scheme. The field staff kept knocking each and every door of the hotel in search of the required office that led to harassment to guests in the hotel. Meanwhile, TV channels flashed news that a raid has been conducted on a hotel.It may be noted that the field staff of RTO was in search of the office of a builder who constructed a multi-storey apartment building near Qaddafi Stadium. Raid had been conducted on the presumption that the builder has sold out all the 66 apartments and not sharing sales documents with the department while the builder had sold only 28 apartments only.

Sources said the builder telephoned the finance minister. When he inquired about it, the department prepared a list that the department has collected handsome money due to raids. However, it admitted that the department raided a hotel mistakenly but still this mistake is excusable because of the good performance of the department. The finance minister, said sources, sided with the department. The builder is now approaching the court of law for claiming damages from the department.
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Taxation
China has unveiled tens of billions of dollars worth of tax and fee cuts as part of a drive to kickstart the stuttering economy, extending pledges worth $300 billion announced last month. With growth at a near three-decade low and the economy struggling under the weight of the US trade row and a soft global outlook, leaders are looking to grease the cogs by getting the country’s vast army of consumers to start spending.

The State Council, or cabinet, said late Wednesday it would reduce electricity and internet costs, port and railway charges and a variety of fees for individuals and businesses to cut their annual burdens by about 300 billion yuan ($45 billion). For businesses, the government will lower average electricity fees by 10 percent and cut broadband fees for small- and medium-sized businesses by 15 percent, the official Xinhua news agency reported.

It will also cut trademark registration fees, the State Council said. For individuals, China will cut a variety of bureaucratic red tape, like fees on postal imports, real estate registration, passport issuance and mobile internet rates.

“Tax and fee cuts are our key measures to tackle the downward economic pressure this year,” said Premier Li Keqiang, according to Xinhua. The announcement follows promises last month to cut company taxes and employer social insurance contributions by nearly two trillion yuan ($298 billion), with the first batch of cuts kicking in April 1.

The meeting Wednesday also outlined new draft amendments to beef up the foreign investment law passed last month, with a provision for “non-discrimination” in administrative licensing as well as measures to improve the protection of trademarks.
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