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Taxation
Punjab Chief Minister Sardar Usman Buzdar has said that in the new Pakistan, national resources are being utilized with utmost care and honesty for public development.

In his message on Tax Day, the CM said that timely payment of taxes is a national obligation while its correct utilization is the responsibility of the state. The taxation process is like a gateway to development and taxable people should play their role in national development by paying the taxes, he added.

The plunder of resources delayed the journey of development in the past,” he said, adding: “Resources are being utilized prudently to provide better services to the people because the PTI government treats recourses as a national trust.”
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Taxation
Regional Tax Office (RTO) Islamabad Tuesday launched an awareness campaign among the business community on filing of income tax returns for tax year 2018 and clarified different queries of corporate sector on electronic filing of returns and statements. RTO Islamabad urged the business community and trade to ensure proper filing of returns by the extended deadline of April 30, 2019.

The awareness campaign centered on urging the attendees to file their returns before the 30 of April 2019 and addressing their taxation related problems. The campaign was arranged by Officers of regional tax office Islamabad. The attendants of the campaign included CEOs from various industries, and market association presidents who were familiarized and given in depth knowledge of the online tax filing system along with addressing their concerns and queries.

The attendants received assurance from the Commissioner Inland Revenue Aisha Farooq, and Deputy Commissioner Inland Revenue Saira khan, who were the officers conducting the campaign.
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Taxation
Staff at the Regional Tax Offices (RTOs) of the Federal Board of Revenue (FBR) have urged Chairman FBR to take notice of not holding even a single meeting of Departmental Promotion Committee (DPC) for promotion of IROs (BS-16) to Assistant Commissioner IR (ACIR) although sizeable number of promotion quota vacancies of ACIR are piling up, rather consumed in direct recruitments for the cadre.

Resultantly, three deserving officers, including two from RTO Faisalabad and one from RTO Sialkot, have retired on 1st of April 2019 and despite their repeated humble requests, the administration wing of FBR did not conduct the meeting of DPC for their due promotion.

It may be noted that the Federal Board of Revenue (FBR) has dozens of meetings of DPCs for various categories of the officers over the last two years. However, there has not been even a single meeting of DPC for promotion of IROs (BS-16) to Assistant Commissioner IR (ACIR).

The unfairness can be judged from the fact that during the intervening periods, a good number of IROs have retired who were fully eligible for promotion and who deserved to be retired in the due scale of BS-17.
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Taxation

IT is now the PTI-government’s turn to announce an amnesty scheme. They’re offering non-filers of tax returns an opportunity to whiten their undeclared assets at home and abroad and get into the tax net.

Facing revenue shortfalls, successive governments have used such schemes as a common tool for fundraising — making a mockery of regular taxpayers and return filers. Pakistan is one of the leaders in offering such schemes – a total of 10 so far – even though many other countries like the US, Australia, Belgium, Canada, Germany, Greece, Indonesia, Italy, Malaysia, Portugal, Russia, South Africa and Spain have used similar tools in the past.

The PML-N, in its last tenure, announced four such schemes to select groups. Starting with a 2014 investment scheme by then prime minister Nawaz Sharif, followed by two more schemes offered to traders and real estate developers, with not very encouraging results.

This was because those choosing not to declare their liquid, movable and immovable assets remained unchallenged and the tax machinery either failed or did not attempt to trace them.

It is surprising for the PTI to succumb to such demands because it has been criticising such schemes passionately when in opposition

The last amnesty offered by the PML-N in April 2018, however, fetched around Rs121 billion and brought about 80,000 people into the tax net.

A year later, the Federal Board of Revenue (FBR) has again missed its nine-month revenue target by a massive Rs318bn — perhaps the highest in history. It has been able to convince Prime Minister Imran Khan and Finance Minister Asad Umar to bring about a new scheme to earn some quick bucks until the government comes under the fiscal discipline of the International Monetary Fund (IMF).

It is surprising though for the PTI to succumb to such demands because it has been criticising such schemes passionately when in opposition.

Rejecting an amnesty scheme offered by then prime minister Shahid Khaqan Abbasi in April last year, PTI chief Imran Khan had said: “Such schemes are created to benefit the corrupt. Only corrupt elements become the ultimate beneficiaries. This is to fool the honest people of the country and encourage corrupt elements to plunder and amass wealth, only to whitewash it later on.”

In fact, he had gone to the extent of pledging not only to reverse the scheme but also to investigate those benefiting from it, if he was voted to power. He had warned tax evaders not to take advantage of the scheme and come into the tax net; a claim that was considered to be a setback to the success of the scheme.

Finance Minister Asad Umar had also been very critical of amnesty schemes. “It is a joke with the nation. Those who plunder the nation’s wealth are being given relief. The only objective is to whiten the stolen money,” he said last year. He added that tax policies were being formed by those people whose relatives make money through corruption.

Rejecting yet another amnesty scheme in January 2016, Mr Umar, as member of the national assembly’s standing committee on finance, had said the tax system was faulty which compelled even the honest to avoid the tax net. “Until the government addresses the issues of smuggling and under-reporting, people will continue accumulating assets, and the government will keep on offering one amnesty scheme after another,” he had said.

The government now thinks that it has been able to significantly suffocate non-filers and tax evaders who would like to benefit from this ‘last opportunity’. The eleventh tax amnesty will be formally offered before the upcoming budget.

According to the Minister of State for Revenue Hammad Azhar, it makes a lot of difference to the scheme’s success if the amnesty is offered in the early part of a political government’s tenure. The government can then chase tax evaders over the remaining part of its rule unlike the PML-N that announced the amnesty at the fag end of its tenure.

Insiders suggest the proposed scheme was taken in hand after the government’s January 2019 (second supplementary budget) plan to recover about Rs200bn Gas Infrastructure Development Cess arrears failed to take off due to unresolved litigation, and the revenue shortfall continued to expand.

According to the finance minister individuals, including those belonging to the business community, were of the view that the campaign against tax evaders had created a lot of fear that the government was serious in its efforts. The believed that if the purpose of the government was to collect more taxes, these individuals should be given an opportunity to come into the tax net.

“There can be a one time opportunity for asset declaration that we will announce before the (coming) budget,” Mr Umar said. He was confident that the scheme would be compliant with requirements of the Financial Action Task Force that had criticised the April 2018 scheme. The minister believed the Fund would not have any objections over the amnesty schemes as many such schemes had also been given in the past.

International lending agencies, particularly the IMF and the World Bank, have generally only been opposed to amnesty schemes as far as statements are concerned. Independent economists, however, consider them unjust and demoralising for existing tax payers and return filers, especially since these schemes have come within very short intervals.

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Taxation

A detailed briefing was given by the Federal Board of Revenue (FBR), headed by its Chairman, Mohammad Jehanzeb Khan, to the Ambassador of China to Pakistan, Yao Jing, and a team of Chinese investors regarding the tax exemption policies for foreign investors in Pakistan. They were also briefed on the tax exemptions available while investing under the China-Pakistan Economic Corridor (CPEC). Finally, the FBR also briefed on the custom tariff concessions present under the Pakistan-China Free Trade Agreement (FTA).


The Federal Board of Revenue (FBR) Tuesday briefed Chinese Ambassador to Pakistan Yao Jing and Chinese investors about the available tax concessions and exemptions to foreign investors under Pakistani tax laws. Sources told Business Recorder that the Chinese Ambassador to Pakistan Yao Jing and a delegation of Chinese investors met FBR team of tax managers headed by FBR Chairman Mohammad Jehanzeb Khan here at the FBR House on Tuesday.

The FBR side included FBR chairman, member operations and member policy of Inland Revenue and Customs.Both the sides discussed the importance of China-Pakistan Economic Corridor – a long-term and systematic project to promote economic cooperation through collaboration on Gwadar port, energy, transportation infrastructure and industrial cooperation. Tax exemptions available under the China Pakistan Economic Corridor (CPEC) projects were also discussed.

Tax authorities briefed Chinese team about the facility of advance ruling available to foreign investors. Through this facility non-residents can obtain, in advance, a binding ruling on the issues that could arise in determining their tax liabilities at a later stage.

The FBR also informed the Chinese investors about the customs tariff concessions available under Pakistan Customs Tariff and imports under Pak-China Free Trade Agreement (FTA).

The issues relating to the imports and applicability of duties and taxes on imports were also highlighted.

The FBR also informed the investors about the agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed between Pakistan and China. Tax authorities assured maximum facilitation to the new investors in Pakistan, sources added.



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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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Taxation
Large Taxpayers Unit (LTU), Karachi has recovered Rs170 million from Foreign Harbor Engineering Company after the attachment of bank accounts. The said company had defaulted Rs. 515.45 million for tax year 2013 and despite several notices, the company failed to pay the amount in time and also went into appeal against the LTU that restrained the field formation to recover the said amount, pending since 2013.

As the commissioner appeal has decided the case in favor of LTU, the tax department under the directives of Chief Commissioner Dr. Faiz Illahi Memon issued a notice under section 140 of the Income Tax Ordinance, 2001, directing the private bank to attach all bank accounts of the company. Sources in LTU confirmed the tax recovery of Rs. 170 million, following the attachment of bank accounts.

They said that the tax team of Foreign Harbor Engineering Company had approached the LTU and requested to allow more time for paying rest of the amount but the plea was declined.

Sources said that LTU would not detach the bank accounts of the company till the recovery of rest of the pending dues. Replying to a question, sources said that all bank accounts would be detached as company was planning to approach the court for stay order on April 4, 2019 (today).
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Taxation
Australia’s conservative government unveiled a big-spending federal budget Tuesday with tax cuts and new infrastructure investment to win voters ahead of the imminent general election.

The budget includes a return to surplus for the first time in 12 years – with economic growth bringing a surfeit of Aus$7.1 billion (US$5.02 billion, 4.48 billion euro) forecast for 2019-20 – allowing the government to tout its economic credentials.

The election could be held as soon as next month, giving the minority Liberal-National government little time to reverse polls which have consistently favoured the Labor centre-left opposition.

Prime Minister Scott Morrison has tried to steer the debate away from his unpopular immigration and climate policies and onto the economy, which his party believes is a strong suit.
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Taxation
Sindh Revenue Board (SRB) has witnessed 7.67 percent revenue growth in March as compared to the collection made during corresponding month last year. According to the SRB, the board has collected Rs9.251 billion in March 2019 as compared to the collection of Rs 8.592 billion made in March, 2018, depicting 7.67% growth.

Moreover, the SRB has collected Rs 69.610 billion during nine months of ongoing fiscal year as compared to Rs 64.049 billion collected during preceding period of 2017-18, showing 8.68% growth.
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